Mortgage Payoff Statement: Everything You Need To Know

Mortgages, loans, and other real estate financing options are a crucial part of the home buying process. But what homeowner doesn’t look forward to the day that their mortgage completely disappears – along with the required monthly payments?

Early payoff of a home loan may seem like a distant dream to achieve, but it’s a common practice for countless homeowners each year. For example, perhaps you have multiple debts weighing you down and you want to consolidate them into one payment for better management, or you would simply like to pay down a debt and have more monthly cash on hand.

No matter which specific financial goal that you have in mind, you first need to get a clear picture of your remaining loan amount and associated charges to know how much money you’ll need to gather. That’s where a mortgage payoff statement comes in. It lays out each fee and dollar still due before you completely pay off your mortgage. Here’s how it works.

What Is A Payoff Statement?

A payoff statement for a mortgage, which you may also sometimes hear referred to as a payoff letter or quote, is a document that details the exact amount of money that is needed to fully pay off your mortgage loan.

Note that the payoff amount doesn’t just refer to your outstanding balance. It also encompasses any interest payments that you may owe and potential fees that your lender might charge.

The payoff statement is a vital document to have in hand due to the interest on your loan balance, which is added daily. In other words, it helps you get a better handle on the exact amount that you’ll owe on your loan. 

Keep in mind that the exact specific amount you’ll need to ultimately pay off a mortgage changes based on the specific terms of your loan, meaning that you can’t just attempt to guess the overall amount owed. If you try, you’ll likely fail to pay everything you actually owe, meaning that getting ahold of a payoff statement for a mortgage is essential.

Payoff Statements Beyond Mortgages

Mortgages aren’t the only type of loan that uses payoff statements, either. You can request one when you borrow money for other purposes as well. The statement is necessary paperwork to have in hand if you want to change or consolidate your debt, too. 

Keep in mind as well that you may not be the only one utilizing a payoff statement. Occasionally, a creditor may present you with this document if they took a serious collection action on your loan – usually on liens.

For the most part, a servicer is required to send back a payoff statement within 7 business days of the initial request for it.

Do You Need A Mortgage Payoff Statement?

In short, yes. There are a couple of reasons a borrower might need a payoff statement. Generally, you’d request it from your lender when you want to know the exact amount needed to pay off your home. But it’s also possible to want to have access to this information for other reasons as well. Note there could be fees associated with requesting a payoff statement.

For example, put yourself in the shoes of a homeowner who wants to change their current debt situation. You need to have access to your mortgage’s details before you decide to refinance your loan to change your terms, lower your payment or consolidate your debt. Or, you may want to get rid of the debt altogether by paying off the mortgage early.

Note that anyone paying off their loan should also inquire about their escrow balance. You pay into it on a monthly basis as part of your mortgage payment to cover future homeowners insurance and property tax costs. Some homeowners can receive a portion of the balance back after paying off their mortgage.

How Are Mortgage Payoff Letters Created?

Keep in mind that there’s a process to obtaining your mortgage payoff statement, and that it can take some time to do so. For starters, you’ll need to contact your lender and let them know you want the information. Depending on your lender, you might be required to do the following to start the request process: 

• Sign into your online account 
• Call a helpline for more information 
• Send a formal letter requesting it
• Fill out a form or document that your lender requests

Keep in mind that you’ll also likely need to supply some personal information in order to start the process to get your mortgage payoff letter as well. For instance, you might need to provide information such as: 

• Your name
• Signature 
• Contact information
• Account number
• Property address and 
• The date you want the payoff to be effective 

Some lenders will also want to know why you’re choosing an early payoff, which you’ll need to explain.

Example Of What Is In A Payoff Statement

Generally, it helps to note that most mortgage payoff letters contain the same information regardless of the lender. In yours, you’ll probably find the following:

• The expiration date of the payoff amount
• Your account number 
• Te full payoff amount required 
• The payoff date 
• Where to send the final payment
• Who to make the check out to
• Whether a cashier’s check is necessary
• Additional charges to include along with your payment
• An adjusted amount in case you pay after or before the payoff date

Knowing what an example of a payoff statement looks like can help you keep an eye out for any mistakes or missing information. 

Payoff Letter Template

[Bank Letterhead]

Date

From: [Your Lender]

123 Your Lender’s Address

Atlanta, GA  30319

To: [Your Name]

456 Your Address

New York, NY 10012

Dear [Your Name],

Per your request, this letter is a payoff statement on Loan # 001-23-45 of $80,000.00. It has an annual rate of 3% over 365 days.

Payoff Statement for February 15, 2025. All obligations of the borrower for this loan will be satisfied if [Your Lender] receives payments in the following amounts by the close of business on October 29, 2025.

Fees already due by 10/29/25: $150.50

Interest due: $3,000

Loan balance: $5,450.15

Pay this amount: $8,600.65

If payment is received later than the indicated date above, please include an additional $20 for each extra day.

Please make any checks payable to [Your Lender Inc.]. If you wish to use alternative payment methods, please reach out to us. We would like to reach a compromise that satisfies both parties.

Contact us with any questions you have about this process at 123-456-7890 or at our email your.lender@email.com.

Sincerely,

Bank Agent, [Your Lender] Senior Manager

Signature

Other Ways To Know What You Owe

Mortgage payoff letters aren’t the only way to learn about your current loan balance. You can also talk to your lender and request a verbal payoff quote. 

However, any quote verbally given to you over the phone or in person doesn’t have the same weight as a letter since it’s not official or legally binding. At the same time, it will give you a general estimate of the money that you still need in order to pay off your loan.

You can even act on that information, but don’t be surprised if it isn’t entirely accurate. Since the information given to you hasn’t been formalized in writing, you take a risk by treating it as fact. However, it is a valuable way to get the ball rolling until you find out the exact amount required for loan payoff.

Can Lenders Charge You For A Mortgage Payoff Letter? 

Yes, a lender can potentially charge a small fee for access to a payoff letter. Costs of $30 or less might generally be expected. This is going to depend on state/investor and can vary. Be sure to call your lender and review any documentation provided as part of your loan in order to determine if any costs for providing a payoff demand statement will be assessed.

The Bottom Line: Behind The Importance Of Payoff Letters 

Payoff statements are an important document for both homeowners and their mortgage lenders to possess. These forms detail the amount of money that is still owed on a loan along with the remaining charges. 

Having access to one can help you move forward with your future plans, whether they involve loan consolidation or total payment. While such statements require some level of paperwork, they’re relatively painless to request. They’re also more reliable than the alternative of receiving a verbal payoff quote.

The next steps on your loan may be some of the most crucial. Before you act, learn more about the process and what you should consider when paying off your mortgage early.