Finance
A Colorado buyer is told they need 'impounds' (escrow account) on their mortgage. Impounds require the borrower to:
AA. Set aside funds for emergency repairs
BB. Pay monthly amounts into an escrow account held by the lender to cover annual property taxes and insurance✓ Correct
CC. Deposit additional funds directly with the title company
DD. Pay all closing costs upfront
Explanation
An impound (escrow) account is maintained by the lender to collect monthly amounts (1/12 of annual property taxes and insurance) added to the mortgage payment. The lender uses these funds to pay the property taxes and insurance premiums when due.
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