A mortgage payoff quote is a document from your loan servicer showing the exact dollar amount needed to pay off your mortgage in full on a specific date. That figure is almost always higher than the principal balance printed on your monthly statement because it includes interest that keeps accruing daily until the payoff date, plus any outstanding fees. You’ll need one whenever you sell, refinance, or plan a final lump-sum payment, and federal law gives you the right to receive it within seven business days of a written request.1Office of the Law Revision Counsel. 15 US Code 1639g – Requests for Payoff Amounts of Home Loan
Why the Payoff Number Is Higher Than Your Statement Balance
Your monthly statement shows principal as of the last billing cycle. It’s a snapshot from the past. Between that date and the day your final payment actually reaches the servicer, interest keeps piling up. The payoff quote closes that gap.
The extra amount is per diem interest. Your servicer takes the annual rate, divides by 365, and multiplies the daily rate by your remaining principal. On a $400,000 balance at 6.0%, that works out to roughly $65.75 a day ($400,000 × 0.06 ÷ 365). If your last payment posted 18 days before the payoff date, that’s about $1,183.50 in accrued interest sitting on top of the principal.
The quote bundles all of that daily interest into a single total that’s accurate through one specific date. Send the money by that date and the amount covers everything. Miss it by a day and you’re short.
What Else the Quote Includes
Beyond principal and per diem interest, the statement itemizes every charge that has to be settled before the lien can be released. Expect to see some combination of these:
- Late fees from any missed or delinquent monthly payments.
- Escrow shortages, if the escrow account doesn’t have enough to cover property taxes or insurance premiums already billed.
- Recording and processing fees that some servicers charge for preparing the payoff statement or handling the lien release paperwork.
- Prepayment penalties, if your loan carries one.
The quote will also subtract credits working in your favor. Unapplied funds or a suspense balance from a partial payment reduce what you owe.
Prepayment penalties are uncommon on loans originated after January 2014. Qualified mortgages either can’t carry them at all or face strict caps, and high-cost mortgages can’t carry them at all.2Consumer Financial Protection Bureau. Ability-to-Repay and Qualified Mortgage Rule Small Entity Compliance Guide3eCFR. 12 CFR 1026.32 – Requirements for High-Cost Mortgages If your loan closed before then, pull your original documents and look for a prepayment clause. The payoff quote is often the first place borrowers discover their loan had one.
How to Request One
Most servicers accept requests through their online portal, by phone, or in writing by mail, fax, or email. You’ll need your loan account number, the property address, and the specific date you expect payoff funds to arrive. That date, called the good-through date, is the key detail because it determines how much per diem interest gets rolled in.
If a title company or attorney is handling your closing, they can request the quote for you, but the servicer may require your written authorization and can take reasonable steps to verify the third party’s identity before releasing anything.4Consumer Financial Protection Bureau. 12 CFR 1026.36 – Prohibited Acts or Practices and Certain Requirements for Credit Secured by a Dwelling
Federal law requires the servicer to send an accurate payoff statement within a reasonable time after receiving a written request, and in no case more than seven business days.1Office of the Law Revision Counsel. 15 US Code 1639g – Requests for Payoff Amounts of Home Loan A narrow exception exists for loans in bankruptcy or foreclosure, reverse mortgages, and situations involving natural disasters, where the servicer gets more flexibility but still has to respond within a reasonable period.4Consumer Financial Protection Bureau. 12 CFR 1026.36 – Prohibited Acts or Practices and Certain Requirements for Credit Secured by a Dwelling If you don’t use your servicer’s preferred channel, they’re allowed a longer window, so submit in writing through the method they specify.
The Good-Through Date, and What Happens If You Miss It
The good-through date is the expiration printed on the quote. The total is accurate only through that day because per diem interest stops calculating there. Payoff quotes are typically valid for 10 to 30 days, depending on the servicer.
If the funds land after the good-through date, even by a day, you’re short by at least one day’s per diem interest. On the $400,000 example, that’s about $66. The servicer can’t release the lien on a partially satisfied loan, so you’d have to request an updated quote and send the difference. At a real estate closing, that kind of delay can push settlement.
Build in a buffer. Request a good-through date several days beyond when you actually expect to send the funds. A little extra per diem interest is cheaper than a stale quote.
How to Send the Funds
Servicers generally accept payoff funds by wire transfer or cashier’s check. Personal checks almost never work because servicers need guaranteed funds.
Wire transfers are the standard for real estate closings. The money arrives within hours and is immediately verified, and your closing agent or title company handles the transfer when you’re selling or refinancing. If you’re paying off the loan on your own, the payoff quote should include wiring instructions with the receiving bank’s routing number and your loan account information.
Cashier’s checks work if you’re not going through a closing and would rather not wire, but they take longer. The check has to be mailed or delivered, and the servicer needs time to process it. What matters is the date the servicer receives the funds, not the date you send them, so pad the good-through date accordingly.
What Happens After Payoff
Sending the money doesn’t quite finish the job. Two things still have to happen: your escrow balance has to come back to you, and the lien on your property has to be formally released in the public record.
Escrow Refund
If your mortgage included an escrow account for property taxes and insurance, the servicer must return the remaining balance within 20 business days (excluding weekends and federal holidays) after the loan is paid in full. That refund is separate from the payoff itself. If you’re refinancing with the same lender, they can apply the balance to the new loan’s escrow account instead of cutting you a check, but only with your agreement.5eCFR. 12 CFR 1024.34 – Timely Escrow Payments and Treatment of Escrow Account Balances
Once the escrow account closes, property taxes and homeowner’s insurance become your direct responsibility. Set calendar reminders for those due dates so nothing lapses.
Lien Release
After the servicer verifies the payoff, it prepares a satisfaction of mortgage (sometimes called a release of lien or reconveyance) and records it with your county’s land records office. Every state sets a deadline for this, but the specific timeframe varies, and recording can take anywhere from a few weeks to a few months.6Consumer Financial Protection Bureau. After I Have Paid Off My Mortgage, How Do I Check If My Lien Was Released
Don’t assume it happened. After 60 to 90 days, check your county recorder’s website or office to confirm the lien is gone from your title. An unreleased lien creates real problems the next time you try to sell or refinance, and it’s much easier to catch now than years later.