Forgotten Your Password?

Need to Register?

Question Icon

Do I get a better rate if I impound Tax and Insurance?

It seems like that from talking to my broker. Please guide me. by ShirleyOlrich from Pasadena, California. Apr 28th 2011 Reply


Gregorio Denny (GVDenny)
#253 ranked lender in California - 380 contributions

You are in California, so the answer is generally no. most lenders have no adjustment for impounds in California. Beware of some that will use that as a reason to increase your rate. You can get the exact same rate/fees with or without impounds.

Apr 28th 2011
1
0
Jennifer Jaye Fraser (QueenBeeBroker)
#193 ranked lender in California - 9 contributions

You may get a slightly better rate if you do request impounds.

Apr 28th 2011
0
0
James Sharp (james.sharp)
#38 ranked lender in Colorado - 7 contributions

Impounds should not effect your rate. In some cases it will effect the fees paid by as much as 0.25% of your loan amount when you waive escrows.

Apr 28th 2011
0
0
Tom Stevens (Thomas.Stevens)
#21 ranked lender in Massachusetts - 68 contributions

Yes. Impounding reduces the lender's risk so most loans are quoted assuming that there are impounds. Impounds are required in many situations. If one chooses to pay for the additional risk of not impounding as a fee versus affecting the rate then your APR increases to reflect that added cost. Lenders can not hold more than 2 months of impounds as "reserve" beyond what is needed for the next tax or insurance bill, so you're never out more than 2 months of funds for bills you would have to pay anyway.

Apr 28th 2011
0
0
Subscribe to our news feed.