What Is Mortgage Payoff in Real Estate?

A mortgage payoff is the total amount required to completely pay off your home loan. It includes your remaining principal balance, interest up to the payoff date, and any lender fees or penalties. Sellers often request a payoff statement before closing to confirm exactly how much they owe.

đź’° How a Mortgage Payoff Works

When you sell your home, your mortgage payoff is paid directly from the sale proceeds at closing. The title company or closing agent sends funds to your lender and releases the lien so the buyer receives a clear title. The payoff amount is valid for a few days because daily interest continues to accrue until the lender receives payment.

🏡 Mortgage Payoff When Selling FSBO

If you’re selling without a Realtor®, your flat fee MLS listing through Brokerless makes it easy to manage your sale while keeping full control. At closing, the settlement statement (HUD-1 or Closing Disclosure) shows the lender’s payoff amount deducted from your proceeds.

  • âś… Request your payoff letter a week before closing
  • âś… Verify daily interest through your payoff date
  • âś… Keep a copy of the payoff confirmation for your records

🔍 Explore more definitions in our Real Estate Glossary.