Finance
In South Carolina, 'impound accounts' (also called escrow accounts) held by lenders are used to:
AHold earnest money deposits
BCollect and pay property taxes and insurance on behalf of the borrower✓ Correct
CFund home improvement loans
DAccumulate down payment savings
Explanation
Lender escrow (impound) accounts collect monthly amounts for property taxes and homeowner's insurance. The lender pays these bills when due, ensuring the property stays insured and taxes are current.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Math Concepts
State-Specific Concepts
Escrow Disputes
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