Whether you’re selling your home, refinancing, or purchasing your second home, the process can be incredibly exciting and a little confusing. Anything to do with the transfer of ownership on a property or the financing of a home can involve so much paperwork you end up with writer’s cramp. One of the most common terms you’ll hear during this process is the term “payoff authorization.”
In fact, a payoff authorization is one of the most important forms you may encounter during the refinancing or property transfer process. You may be wondering: What is a payoff authorization, how does it work, and what do I need to know about it as closing approaches? Fortunately, our team of title insurance experts at Liberty Title in Minnesota is here to walk you through the process.
Your Mortgage Balance and Closing
If you’re refinancing your home, selling your home, or purchasing a new home, you’ll need to work out the obligations of your existing mortgage. This has to be done so you can take out a new loan. You might assume your payoff amount is the amount you still owed on your last statement from the mortgage lender. However, the amount you will need to pay to satisfy the terms of your mortgage is not necessarily the same as your current mortgage balance.
Here’s what’s included in your payoff amount:
● Interest owed through your payoff date
● Any late fees
● Any missed payments
Request for Payoff Authorization
A request for payoff or payoff authorization will allow you to find out exactly what you need to pay off to be free and clear on your mortgage. This tells the new buyer’s lender what they’ll pay on your home or allows you to move forward with your new loan. The payoff authorization form will be signed by you, the seller(s), and requests a payoff statement from your lender containing all of the information needed for closing. It also informs your lender of your closing day.
What’s on a Payoff Authorization?
A payoff authorization will include all of the information relevant to your loan. It includes a request for a written payoff statement to be faxed to the closing team. It also requests the loan number, borrowers’ names, address of the property, borrowers’ billing address, account number, principal balance, interest per diem, and payment dates. It will also ask whether a satisfaction of mortgage will be filed and anything else that may be needed to pay off the loan. Finally, it requests a Release of Mortgage for mortgages paid in full.
Minnesota Title Closing Company
Whether you’re refinancing your home or you’re selling it, we can walk you through the entire process so it goes as smoothly as possible. Our team of title closing agents at Liberty Title loves helping Minnesota homeowners make their dreams come true.
It doesn’t matter if you’re a professional home flipper or a first-time buyer. Let our title closing agents help make your closing seamless. Call our team to set up your closing at 763.494.0340, or contact us to find out more about how we can make your sale go smoothly.