What is impound

Escrow impound accounts are those accounts which lenders set up to collect 'up-front' money from you when you take out a mortgage to cover future expenses such as property taxes and insurance. Lenders like to set up these impound accounts, as they are then certain that the property taxes and insurance will be paid on time, as they will be holding the money and paying these expenses for you.

        (quote from http://www.escrowhelp.com/articles/19990604.html)

Impound Account（也叫Escrow Account）是指lender设立的一个account. 贷款人在贷款时候要先在这个account里放六个月的property tax和insurance. 之后每个月除了付贷款的本金和利息之外，还要将property tax及home insurance一起支付，以后由lender替房主将该付的地产税和房屋保险按时上交。

The good:

There will be more lender rebate to cover closing cost. Sometimes, the rate may get better.

The cons:

You will prepay about six months property tax and six months of insurance during closing.

You will also pay insurance and property tax in your monthly mortgage payment. The amount is (total amount/12)

Sometimes lender doesn't receive supplemental property tax bill from county, so you will be responsible to pay it. 

FAQ

Q: Can I cancel the escrow impound?

Depend on the lender, some lenders allow you to cancel, others may not.

For example, Wells Fargo give the following guideline when I tried to cancel my escrow account:

1. You must not have any 30-day late payments in the last 12 months, and your loan must be paid current with no past due payments owned.

2. Your escrow account balance cannot be in a negative status.

3. Your credit score must not be less than 680 and has not declined since loan closing.

4. Your loan closing date must be 12 months or greater.

5. You must not have Lender Placed Insurance on your loan.

6. Your loan must meet the required LTV ratio of 80% for primary residences,or 65% for non primary residences.

Q: 如果贷30年，impound是以后30年都要把半年的地产税和保险都放在impound帐户吗？

是的. 但是里面的钱不一定是半年的, 有时会多有时会少. 如果是快付地产税的时候, 里面可能已经有八个月的钱. 付完地产税后, 里面的钱就可能只剩两个月的.