What Is a Mortgage Payoff Quote & Why You Need One

A mortgage payoff quote is an official document from your mortgage servicer stating the exact amount needed to fully satisfy your loan on a specific date. Unlike a regular statement balance, it includes all outstanding principal, accrued interest, and applicable fees. This precise figure ensures the loan account can be permanently closed and the property’s lien released upon payment.

When a Mortgage Payoff Quote is Needed

Homeowners need an official mortgage payoff quote for several key financial transactions involving their property.

When selling a home, the title company or closing agent requires the exact payoff amount. This ensures the seller’s mortgage is fully discharged and the property title can be transferred without encumbrances. Without this precise figure, the sale cannot be finalized.

A payoff quote is also essential during a mortgage refinance. The new lender needs an accurate payoff amount for the old loan to facilitate its closure. This ensures new loan proceeds correctly extinguish the prior debt. Attempting to pay off a mortgage using only an online balance or a monthly statement can lead to an underpayment, which prevents the loan from being fully satisfied.

Finally, a homeowner needs a payoff quote when paying off their loan early with a lump-sum payment. The quote includes all outstanding principal and interest accrued up to the intended payoff date. Relying on an estimated balance can result in a short payment, leaving an outstanding balance that accrues interest and prevents formal loan closure.

Key Information on a Payoff Quote

A mortgage payoff quote contains several distinct components that collectively determine the total amount needed to satisfy the loan.

Principal Balance

This is the remaining amount of the original loan that has not yet been repaid.

Accrued Interest

This is the interest that has accumulated on the principal balance since the last payment, up to the specific “good-through” date on the quote. Per diem interest, also known as daily interest, represents the amount of interest that accrues each day on the outstanding principal balance.

Outstanding Fees

These can include late fees, administrative charges, or prepayment penalties if the loan agreement includes such a clause for early payoff.

Escrow Funds

Funds held in an escrow account for taxes and insurance are also addressed; these are typically returned to the homeowner after the loan is closed.

Good-Through Date

This indicates the specific date until which the quoted amount is valid. It accounts for all accrued interest and fees up to that point. If the payoff is made on or before this date, the quoted amount will be sufficient to close the loan.

How to Obtain a Payoff Quote

To obtain a mortgage payoff quote, contact your mortgage servicer directly. Most servicers offer multiple contact methods, including a dedicated phone number, an online portal, or a written request. Online or phone requests often have faster processing times.

When requesting a quote, provide identification details to verify your ownership and access your account. This includes your mortgage loan number, the property address, and the specific date you intend to pay off the mortgage. Providing an accurate payoff date is important, as the quote’s validity is tied to this date.

Turnaround time for a payoff quote varies, but most servicers provide the document within three to seven business days. Some offer expedited delivery for a fee or instant access online. The quote is typically delivered via email, postal mail, or available for download from the servicer’s online platform.

Interpreting Your Payoff Quote

Upon receiving your mortgage payoff quote, understanding the total amount due is paramount. This figure represents the precise sum needed to fully satisfy your mortgage and ensure the property’s lien is released. Pay this exact amount to avoid any lingering balance or complications in closing your loan account.

The “good-through” date dictates the validity of the quoted amount. If payment is made on or before this date, the stated amount is sufficient. If submitted after this date, additional per diem interest will have accrued, making the original amount insufficient. In such cases, you would need to contact your servicer for an updated quote or calculate the additional per diem interest yourself and add it to the original amount to avoid a short payment.

If an overpayment occurs, the mortgage servicer typically processes a refund for the excess amount after the loan is officially closed. If any figures on the payoff quote appear incorrect or unclear, contact your mortgage servicer for clarification before proceeding with payment.