Mortgage Prepayment in Full: What Must You do?

17 May 2004 "I have come into a bequest and want to pay off my mortgage in full. How exactly do I do that?" You can�t just send the lender a check, even if you know exactly what the payoff amount is. Lenders have procedural rules about payoffs and you must follow them. Another reader recently wrote me about her experience. She called the lender to find her balance, calculated interest through the day of payoff, and sent the lender a check. When she examined her account on the internet some days later, however, the payment had not been credited. So she called again. She was told that the last payment, no matter what the amount, had to be a cashier's check or direct funds transfer; it had to be mailed to a different address; and it had to include an additional $50.00 to reimburse the lender for a payoff statement and for handling the paperwork at the county deed register office. Had she not called, she would have been delinquent. The moral: before proceeding, call the lender to learn the drill. Copyright Jack Guttentag 2004

Jack Guttentag is Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania. Visit the Mortgage Professor's web site for more answers to commonly asked questions.

Search More Info On:

You'll be re-directed to Top-Lenders.com