FinanceQuestion 82 of 100
The account in which a lender holds a portion of a borrower's monthly payment to pay property taxes and insurance is the:
a.Escrow (impound) account
b.Acceleration account
c.Amortization account
d.Discount account
Explanation
An escrow or impound account is where the lender collects a portion of taxes and insurance with each monthly payment and pays those bills when due. This ensures property taxes and hazard insurance stay current. The account is analyzed periodically and adjusted.
Practice all 100 questions free — no signup required.
Related questions on this topic
- A key purpose of the secondary mortgage market, including entities like Fannie Mae and Freddie Mac, is to:
- The Truth in Lending Act (Regulation Z) requires lenders to disclose the:
- A property has a net operating income of $24,000 and sold for $300,000. What is the capitalization rate?
- A conventional loan is best described as one that is:
- A prepayment penalty in a mortgage is a charge for:
- Using an annual property tax rate of $2.50 per $100 of assessed value, the annual tax on a home assessed at $180,000 is:
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against New York Real Estate Salesperson Licensing Exam · How we review