Can anyone tell me what does loan payoff mean and what are the procedures while a loan is payed off?

Answer 1

it means how much you owe on your principle assuming there is no prepayment penalty....when it's paid, you need a satisfaction of mortgage recorded in the public record

Answer 2

The loan pay off is how much you have to pay off for the loan you got!! For example if you don't know your credit score and you get a car loan and find out that the intrest rate is 8% for a $20,000 loan At the end of paying off the loan you have to end up paying around 25K. It's 20k * 8% each year! Plus all the taxes and fees. The payoff loan, what you need to payoff your loan is 25k! So, somtimes the payoff loan is what the loan is for! The point is, to save up money to put down a down payment and avoid the payoff loan because you won't have to get that big of a loan and a less payoff!

Answer 3

If you are talking about selling or refinancing your home, then the loan payoff is the amount that needs to be paid to the current mortgage lender to pay the current loan in full.

Usually the closing agent (buyer's agent if it's a sale, your agent if it's a refinance) will request the payoff amount, which includes all interest due as of the date of your closing. At the sale the buyer's agent deducts that amount from the sales price and sends the payoff in to the lender. At the refinance the closing agent uses the money from the new loan to send in the payoff.

When the lender receives the full payoff amount they mark the original note "Paid" and return it to you. They send the original mortgage to the county clerk to be filed as "Cancelled" and after that's recorded it's sent to you.

Answer 4

Loan payoff means the exact amount to close the loan. This amount will include all fees and pre payment penalties so it may be higher than the principle balance.

Here is some additional info. Hope this helps.