Is your loan payoff more than you were expecting? That’s tends to happen pretty much every closing and there are lots of reasons why the payoff balance may be higher than the amount shown on your monthly statement.

The most-common reason: Your monthly statement only shows the principal balance and doesn’t include the interest that accrues every day, and this accounts for the difference between your statement balance and the final payoff. It’s just how mortgage math maths. Banks don’t like anyone, but they do like money. Collecting interest in arrears, which is the fancy way to describe how they math, is how they get the most possible from their borrowers. It’s not personal, they do it to everyone. Point is, “balance” on your monthly statement isn’t your payoff. It never is. Your payoff will be higher. Always.

There are, also, other factors that can affect your payoff: there may be a shortage in an escrow account, there may be owed late fees or other lender charges, or there may be a prepayment penalty associated with your mortgage. There might be a forbearance amount. We’ve seen all of these and more add to a final payoff amount.

We always obtain a written payoff statement from your mortgage company, and will happily give you a copy if you want one.