How to request your payoff statement
A payoff request is a short written request to your servicer, the company you send your monthly payment to. Regulation Z, 12 CFR 1026.36(c)(3), says the statement must go out after “a written request from the consumer or any person acting on behalf of the consumer,” so your title company can ask for you once you authorize it.
Include:
- your full name as it appears on the loan
- the loan number
- the property address
- the date you expect to pay off, which is usually your closing date
- where to send the statement, such as your email or the title company
- your signature and the date, if the servicer wants a signed authorization
Many servicers also take requests through their website or a phone line and then send a written statement. Ask for confirmation that your request was received, since the seven-day clock runs from that date.
The federal deadline: seven business days
The rule says the servicer must send an accurate statement of the total outstanding balance “within a reasonable time, but in no case more than seven business days” after receiving the written request.
There are exceptions. The statement must still be sent within a reasonable time, but the seven-day limit doesn’t apply when:
- the loan is in bankruptcy
- the loan is in foreclosure
- the loan is a reverse mortgage or a shared appreciation mortgage
- a natural disaster or similar event delays it
The rule also doesn’t apply to a creditor or assignee that doesn’t currently own the loan or the servicing rights. And although most HELOC rules are separate, the official interpretation says the payoff requirement applies to home equity lines secured by a dwelling.
What the payoff statement shows
A payoff statement is more detailed than your monthly bill. Expect to see:
| Item | What it means |
|---|---|
| Unpaid principal | What you still owe on the loan itself |
| Accrued interest | Interest from your last payment to the good-through date |
| Per-diem interest | The daily amount to add for each day past the good-through date |
| Fees | Late charges, any prepayment penalty, recording or statement fees |
| Escrow shortage or advance | Money the servicer paid for taxes or insurance that you haven’t repaid |
| Good-through date | The last day the total is accurate |
| Wire instructions | Where and how to send the money |
The total payoff is the amount that will satisfy the loan in full on that date.
Why the payoff is higher than your balance
Mortgage interest is charged after the month it covers, so your monthly statement’s “principal balance” doesn’t include interest that has built up since your last payment. The payoff adds it.
Example. Your statement shows a principal balance of $142,000 at 6% interest. Daily interest is about $23.34 ($142,000 times 6%, divided by 365). Closing is 25 days after your last payment, so about $583 of interest is added, plus any fees. The payoff is around $142,600, not $142,000.
When to ask for it
Request the payoff as soon as you have a signed purchase agreement, or a few weeks before a planned refinance or payoff. Ask for a good-through date a little past your expected closing, so a short delay doesn’t make the figure stale. If you are only checking what a sale would leave you, a payoff quote is still more accurate than the balance on your monthly statement.
Check the statement before closing
Payoff errors are rare but costly. Before closing, check:
- The loan number and borrower names match your loan.
- The good-through date is on or after your closing date.
- Fees look right; ask about anything unfamiliar.
- Wire instructions came from the servicer itself. The FBI’s Internet Crime Complaint Center advises using “secondary channels or two-factor authentication to verify requests for changes in account information.” Your title company should verify payoff wiring instructions by phone with the servicer at a known number, and you should never forward payoff instructions you received by email without checking. See closing wire fraud.
If you have more than one loan, such as a first mortgage and a home equity line, request a payoff for each one.
Payoff statements for more than one loan
If you have a first mortgage and a home equity line, or a second mortgage, each lender issues its own payoff, and each must be paid at closing for the buyer to get clear title. The title company requests them in order of the liens’ priority. For a home equity line, the request usually comes with your signed instruction to freeze and close the line so its balance can’t grow after the payoff figure is issued; selling a house with a HELOC explains that step.
If a loan is in foreclosure, request the payoff as early as possible. Regulation Z only requires “a reasonable time” for those loans, and the figure will include legal fees and costs that keep changing until the case is dismissed.
After the payoff: the release
Once the loan is paid off, Ohio law requires the lender to record a release with the county recorder within 90 days, under R.C. 5301.36. If it doesn’t, you can recover $250, and after a written notice in the form the statute gives, attorney fees plus $100 a day up to $5,000.
Keep your payoff statement, the final payoff letter and your closing statement. If an old mortgage ever turns up on a future title search, these documents prove it was paid.
For how the payoff fits into the rest of a sale, see how to sell a house with a mortgage. To estimate what you’ll keep after the payoff, use the steps in how to calculate home equity.
