How does an impound account work?

 The lender collects funds from borrowers based on projected property taxes and insurance bills. Money is usually collected at closing to fund the impound account. After closing, funds to cover property tax and insurance bills are collected from the borrower, usually on a monthly basis.  The mortgage bill will outline how much is in your impound account and how much they collect each month that goes towards your impound account. The borrower receives interest on the money in the account. The lender pays the property tax and insurance bills.

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