What are Prepaid Costs and Escrow Accounts? The Good and Bad

Escrow Accounts (also known as impound account) for Prepaids: We explain impound accounts and prepaids. Why are they helpful to the banks and borrowers? And what is annoying about them? 3 prepaid items; Taxes, Homeowners Insurance, and Interest How many months of Taxes and Insurance do banks want prepaid? How many days of Prepaid Interest? Most banks charge 25 basis points to waive the escrow account, Waivers can be done with 20% equity We have access to bank/s that do not charge for the escrow waiver If the property in flood zone (requiring flood insurance) then the property must have escrow account