Navigating the Closing Statement-is the Payoff Amount on My Closing Statement Correct?
Bruce Myer, Sarasota Florida area Realtor® often hears from Sellers that their mortgage payoff amount on their Closing Statement is more than they think they owe. Here are a few things to keep in mind.
Your payoff will be calculated through the next business day and will include the principal balance plus interest. Mortgage interest is calculated in arrears, so your regular payment includes the principal plus the interest for the preceding month. Your payoff will include the principal, interest for the previous month, plus interest for the current month through the day after closing. This is why the payoff amount appears to be high.
It’s very important that your payoff is calculated correctly. If it is short, even by a few dollars, your lender can refuse it and the interest keeps accruing. The Title Company or Closing Attorney can’t always guarantee that your lender will receive the payoff the same day that you close, so they usually calculate it through the next business day. If your lender receives too much, they will refund the excess. This is one of those times when you are better off safe than sorry.
Another question we get is “what about the money in my Escrow Account”? You will get a refund of funds that are being held in your Escrow Account, but most lenders handle this separately because the funds are actually being held by a 3rd party servicer. When your lender receives your payoff, they will notify the escrow servicer, who will send you a check. This can take several weeks.
Finally, please be mindful of when you make your last mortgage payment. If you make it too close to closing day, it may not be reflected on the payoff statement, and the Title Company or Closing Attorney must collect the amount showing on the payoff statement that comes directly from your lender. If you have questions about the timing, please call us. We are always happy to help!
Contact Bruce Myer (941) 387-1847
Bruce Myer, Sarasota Florida area Realtor® of more than three decades is a leader in helping people buy or sell their homes throughout the Sarasota Florida communities. This is no small feat considering the competitiveness and intensity of the market.We represent clients from both Sarasota and Manatee Counties: Sarasota, Siesta Key, Longboat Key, Bird Key, Lido Beach, Casey Key, Lakewood Ranch, Bradenton, Venice, Osprey, Nokomis, Englewood, North Port, Anna Maria Island and Holmes Beach.
