Mortgage Payoffs

When a borrower takes a loan against a property, he/she has to repay that loan amount and a day will come when the borrower pays his/her last installment. This is a normal process that happens at the end of the mortgage loan life cycle. Borrower sends a payoff letter through an attorney or an agent or a title company, stating that this is my last installment to be paid and expectedly I should get my property documents after my last payment paid. On the request, the lender arranges borrower’s property documents and keeps those till 90 days of receiving the final payment. After that, lender sends those property documents to a specific county and sends a letter to title company to collect the property documents from that particular county.

A loan may payoff due to several reasons. Most of the times a mortgage loan can be paid off for one of the following reasons:

Maturity date has reached – Once a borrower reaches to last installment to be paid, a lender suppose to release property documents.

Property has been sold – If property has been sold, a lender has got no rights to keep the property documents with him and should release the property rights as soon as possible.

Property has been re-financed – Generally people go for re-finance when there is a change in interest rate in the market or to make some cash out money when there is a hike in equity of the property. In such cases, borrower needs to pay off the earlier loan before going for a re-finance.

There are certain other important points that a borrower needs to look after for payoff a mortgage loan. They are given below

* Is there any remaining balance to be paid
* Any interest due till the payoff date
* Any outstanding late charges
* Other outstanding fees or any charges
* Borrower sends a final “payoff check”, full remaining loan amount
* Remaining Escrow funds returned to borrower
* Prepare payoff necessary release forms
* Borrower releases from debt
* Documents are released