What are Escrows and Impounds?

In order to own a home you are going to have to pay real estate taxes and normally speaking you are also going to be required to have hazard insurance or homeowners insurance. If you have a loan on your home normally speaking the bank is going to require you to set up an escrow account.

All approved VA lender's with LowVARates will require VA loans to have an escrow account. An escrow account is an account set up for you to put money aside every single month along with your mortgage payment for both your taxes and your homeowners insurance. By setting aside money each month the lender can rest for sure that when your taxes and your homeowners insurance premiums come due that there will be sufficient money to pay them. In addition to giving peace of mind to your lender, the escrow account also allows the home owners to know that when the time comes to pay taxes and insurance that they will not have to scramble to make the payments.

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