What does a lender typically collect monthly into an escrow impound account on behalf of the borrower?
Correct Answer
B) Property taxes and homeowner's insurance premiums
Lenders collect monthly amounts for property taxes and homeowner's insurance into an escrow impound account. This ensures these obligations are paid on time, protecting the lender's interest in the property. The collected funds are held and disbursed by the lender when the bills come due.
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Related Topics & Key Terms
Related Topics:
Key Terms:
Related Concepts
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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