What’s best for property buyers?

When you are buying or refinancing a property, you will get a good faith estimate around the time you go into a bond. The estimate will include a line item for a bond account information — also called property tax and insurance impounds.

These are monies that might be added into your monthly mortgage payments to cover property taxes and insurance. The lender may require them, or it may be an option for you.

For most people, escrowing taxes and insurance is a great way to go, especially for first-time buyers and/or buyers who are tight on funds. Since most of us do not sock away money in a separate account for property taxes and insurance, we get clobbered at property tax time. It’s much better to budget and save that money throughout the year, and escrowing these funds with the lender is a great way to force yourself to accomplish this goal.

Ultimately the choice is yours, but it sure is nice to get to property tax time and know you don’t have to come up with a large amount of cash to cover those bills. Since you’ve already saved those monies along the way, you should have a stress-free month while others are scrambling to pay the bills.