Impound Account
An impound account is another name for an escrow account, where the servicer collects and pays your taxes and insurance.
What Impound Account means
The terms are interchangeable; impound is more common out west, escrow in Florida. A portion of each payment funds the account so annual bills are covered.
Florida example
A Florida borrower's monthly payment includes an impound amount for the county tax bill and the wind insurance premium. The servicer reconciles the account yearly and adjusts the payment if costs rise.
What it is
An impound account is another name for an escrow account. Your lender collects part of your taxes and insurance with each payment and holds the money.
When those bills come due, the lender pays them for you. This keeps your coverage and taxes current.
Why lenders use it
Impound accounts protect both you and the lender by making sure taxes and insurance never lapse. Most loans require one, though some allow a waiver.
We explain exactly what goes into your escrow. Reach out and we will break down your full monthly payment.
Verify the details for your own situation against these government and agency sources: CFPB Owning a Home guide and HUD homebuyer resources.