A borrower is required to advance $412.00 for an impound account. Who benefits from this action?

The advancement of funds for an impound account primarily benefits the trustor, who is the borrower, and the beneficiary, typically the lender. An impound account, also known as an escrow account, is designed to set aside money for recurring property-related expenses such as property taxes and homeowners insurance.

By advancing money into this account, the borrower ensures that these crucial expenses will be paid on time, helping to protect both their own interests and those of the lender. For the lender, having a funded impound account minimizes the risk of property liens due to unpaid taxes or homeowners insurance claims that could jeopardize the property’s value and the lender’s security interest.

Choosing the option that includes both the trustor and beneficiary acknowledges the shared benefit: the borrower can secure their homeownership responsibilities, while the lender secures their investment by ensuring that essential expenses are managed appropriately.