Sellers /On April 7, 2014

How are Home Mortgage Payoffs Calculated?

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Q: How are mortgage payoffs calculated?

A: The settlement agent will obtain a payoff statement from any lender who has a security how much is my home worth? interest in your home, and we are obligated to accept that figure (you may challenge it if you think it is wrong though). Many times sellers erroneously estimate their payoffs because they do not consider or understand that interest is paid in arrears on a house loan. For example, if you have a principal balance of September 1 but are closing on September 30, then your payoff will include accrued interest from September 1 through September 30. That amount of interest can be nearly the amount of your house payment. In addition, since the payoff does not arrive in the lender’s hand as of the day of closing we will add several days to account for transit and processing.

Feel free to contact us, or Brian D. Lytle at Lytle Law (757-595-5655), for questions specific to your situation. We'd love to help!

If you’re a seller who has been wondering if it might finally be time to sell, email us at concierge@lizmoore.com, or click below, and we can prepare a complimentary analysis of market value for you – you just may be pleasantly surprised.

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Lynnette Tully

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Liz Moore & Associates is a boutique real estate agency renowned for having the region's top agents, with extensive market knowledge and local expertise that is only achieved through relentless training coupled with Liz's extremely high standards for professionalism. When you're buying or selling a home, experience matters.