Perhaps I’m a little biased, but I believe the pros seem to outweigh the cons. A few other things to note:
- The impound account can usually be canceled at any time.
- The accounts are under trust regulation so the accounting is spot on.
- They just make life a little easier.
Lenders want you to have an impound account. In the event of a foreclosure, they are generally past due taxes and a lapsed insurance policy, which add to the cost out of pocket for that lender when they foreclose.
Lenders prefer you to have an account so they always know the status of those payments and can minimize losses when necessary, and reduce the amount of closing costs. For lenders, an escrow impound account is incentive for your participation.