Practice Quiz

Florida Real Estate Exam

Category - Florida

Start a Study Session Sign up for Question of the Day
Mr. Parker is holding $300 in an impound account on a Trust Deed on which he has been receiving payments from Mr. Carroll.  Which of the following is true concerning the impound account?

  1. He may draw interest on the account if placed in a savings and loan association
  2. It should always have a constant balance equal to one year’s taxes and insurance
  3. It cannot exceed by more than 5% the amount needed for one year’s taxes and insurance
  4. It benefits the trustor and the beneficiary
Explanation
Answer D - Impound accounts are paid to the lender to build a fund of money so that they can pay the taxes and insurance when these large bills come due. It helps the lender, in that the borrower does not default on the loan if they cannot make these payments, and it helps the borrower by making small contributions each month to cover one major expense.

Previous Next
Was this helpful? Upvote!
Login to contribute your own answer or details
Start a Study Session Sign up for Question of the Day

Top questions

Related questions

Most popular on PracticeQuiz