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Mortgage Definitions: Payoff Document

Going into the process of a refinance can be intimidating. The mortgage market seems to have its own language, making it somewhat difficult for those who aren’t fluent to understand what’s going on. One term a lot of borrowers have questions about is the “mortgage payoff” document. This piece of paper, however, is nothing to worry about. A lender can’t take advantage of you or trick you into paying extra with a mortgage payoff; it’s very straightforward and is a legal document describing how you can pay off your home loan.

payoff document

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What is a mortgage payoff document? Let’s take a closer look.

If you’re nearing the end of your loan term, it’s time to request a payoff statement from your lender. This statement details how you can completely pay off your loan in one transaction, which is important because your loan balance may change frequently due to interest charges and payments received.

With the payoff statement, you can see the date on which you’ll have your loan completely paid off. The document will state the total payoff amount and the final payoff date. This includes all of the interest accumulated throughout the life of the loan, payoff fees, and other unpaid debt. The letter should also provide instructions on how to make the payment and how much to adjust the payment if you pay before or after the projected payoff date.


Here’s a real-world example:

Say you set your payoff date for March 9, and you make your normal monthly payments on the first of the month. You have not yet made your payment due on the first day of March. In this case, your payoff statement will include:

  • The loan balance as of the end of February
  • Interest for the month of February
  • Interest for the first 8 days of March
  • All payoff fees
  • Other unpaid debts
  • Minus your current escrow balance


Once you pay the final amount indicated in the payoff statement, you will have paid your mortgage in full. To request your payoff statement, simply contact your lender. Some lenders offer online payoff request options, while others require a faxed request or a phone call.

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