Question

Jeanne and Mark are buying a home. They've been told their mortgage payment will be $1,072 per month. There's also an additional amount of $335.62 being added to the monthly payment, bringing their total to $1,407.62. It was explained the additional $335.62 is to cover insurance and property taxes. Which loan definition applies?

Answer 1

This is an example of impound.

Step-by-step explanation:

Impound is an account maintained by mortgage companies. It collects payments such as property taxes, hazard insurance, private mortgage insurance, etc. These payments though are not included in mortgage are necessary for keeping home.

In the most simplest way it can be defined as an account used to hold to make payments for property taxes and insurance.