Also known as an Escrow Account, Impound Accounts are set up for the purpose of paying your property taxes and homeowner's insurance throughout the year — removing the need to remember monthly payments for each.
If you put 10% or more down on a conventional loan, you will have the option to set up an Impound Account — and doing so comes down to your personal preference.
If you like writing checks, don't worry about it. If you'd like your taxes/insurance paid automatically, set up an Impound Account. It's up to you!
Please know — due to the increased risk of property tax liens in the event of default, some lenders will have slightly worse interest rates when you choose not to have an impound account.
VA, FHA, and USDA all require impound accounts, as do certain Jumbo and Non-QM products. For questions or more information, contact us anytime on the RedDoor app or at email@example.com!