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If you’re thinking about refinancing your home loan or paying off your mortgage early, you might request a mortgage payoff statement. The amount due on this document is likely to be different from your current balance because it includes interest owed until the payoff date and any fees due.

Read on to learn more about what a mortgage payoff statement or letter is and when you might need one.

What Is a Mortgage Payoff Statement?

Starting with mortgage basics, a mortgage is a loan used to purchase different types of real estate, including a primary home. A bank or other lender agrees to lend money, which the borrower commits to pay back monthly for a set period of time and with interest.

The different types of mortgage loans include conventional and government-insured mortgages and reverse mortgages.

There are jumbo loans, which exceed the dollar limits set by the Federal Housing Finance Agency, and home equity loans.

Say you have a mortgage and want to know exactly how much you’d need to pay to satisfy the loan. A mortgage payoff letter will tell you that magic number. Unlike your current balance, the payoff amount includes interest owed up to the day you intend to pay off the loan. It may also include fees that you’re on the hook for and haven’t paid yet.

Your monthly mortgage statement, on the other hand, only shows your loan balance and the amount due for your next monthly payment.


💡 Quick Tip: You’ve found an award-winning home. Enjoy an award-winning mortgage experience, too. SoFi has knowledgeable Mortgage Loan Officers to guide you through the process.

How Does a Mortgage Payoff Statement Work?

You can request a payoff statement from your loan servicer at any time. Note: Your mortgage servicer may be different from your lender. The company that manages your loan handles billing, accepts loan payments, keeps track of your principal and interest, and fields questions from borrowers.

You may request a payoff statement for any type of loan, including mortgages, student loans, personal loans, and auto loans. However, if you need your mortgage payoff statement, go to your mortgage servicer directly. The name and contact information of your mortgage servicer is included in your monthly statements.

When you make the request from the company that handles your mortgage servicing, you’ll need to provide the following details:

•   Your name

•   Address

•   Phone number

•   Your loan number

•   The date you want your payoff to be effective if you’re seeking to pay off your mortgage early.

Asking for a payoff statement does not necessarily mean that you intend to pay off your loan immediately. You may simply be determining whether or not paying off your mortgage early is feasible, for example. The request itself does not initiate the prepayment process.

Traditional lenders, such as brick-and-mortar banks, may mail you a paper mortgage payoff statement. Online lenders may send a payoff statement online.

Recommended: 5 Tips for Finding a Mortgage Lender

What Information Do Mortgage Payoff Letters Contain?

All mortgage payoff letters tend to contain similar information, including:

•   Payoff amount: The amount of money that would satisfy the loan.

•   Expiration date: The date through which the payoff amount is valid. The letter may also include an adjusted amount should you pay before or after the expiration date.

•   Payment information: The letter will also usually tell you who to make the final check out to and where to mail it.

•   Additional charges: You will be alerted to any additional fees and charges that you’ll need to include.

💡 Quick Tip: Your parents or grandparents probably got mortgages for 30 years. But these days, you can get them for 20, 15, or 10 years — and pay less interest over the life of the loan.

Do You Need a Mortgage Payoff Statement?

There are a few common situations in which you might need a payoff statement.

•   Refinancing a mortgage: When you refinance your mortgage, your chosen lender pays off your old home loan with a new one, preferably with a lower interest rate and possibly a new term. When you seek to refinance, your new lender may ask you to provide a payoff statement on your current loan.

•   Prepaying a mortgage: It’s possible to pay off a mortgage early. A payoff statement will show you exactly how much you’d need to pay to do so. Most prepayment penalties for residential home loans that originated after January 10, 2014, are prohibited. Still, check before you decide to prepay.

•   Working with a debt relief company: If you’re having trouble managing your debts, you’ve fallen behind on payments, or you otherwise need mortgage relief, you may choose to work with a debt relief company that can help negotiate with your lenders. The company will need to see payoff statements to get an idea of the scope of your debt.

•   Collections and liens: A lender might send you a payoff statement if you’ve fallen behind on your payments and they are sending your debt to a collection agency. In this case, the payoff statement may tell you how much you need to pay to stop the collection action.

   If your lender decides to seize your home to recoup unpaid mortgage payments, they may place a lien on the property. They may send a payoff statement that alerts you that your property will be seized if the specified amount isn’t paid in full.

There are other ways to figure out how much you owe on your mortgage loan. You can talk to your lender and ask for a verbal payoff quote. This will provide an estimate, but understand that it is not a legal agreement and isn’t binding.

The Takeaway

If you have a home loan, you may want to request a mortgage payoff statement, especially if you’re thinking about refinancing or paying off your mortgage early. Requesting the mortgage payoff letter does not initiate any formal processes, so it’s fine to think of it as an information-gathering exercise.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

How do I get my mortgage payoff statement?

Contact your loan servicer to request your mortgage payoff statement.

When should I get my mortgage payoff statement?

Request your mortgage payoff statement when planning to prepay your mortgage, refinance, or consolidate debt.

How long does it take to get a mortgage payoff statement?

Generally speaking, you should receive your mortgage payoff statement within seven business days of your request.

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Photo credit: iStock/Vadym Pastukh

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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If you’re a first-time homebuyer, you may qualify for special mortgage rates and incentives not available to other homebuyers. For Midwestern buyers, we’ve rounded up all of the information you need to understand which programs you may qualify for in your region.

Recommended: What is the Average Down Payment on a House?

Popular Midwest First Time Home Buyer Programs

Ohio

The real estate market has been buzzing in the Buckeye State over the last year, with the number of homes sold up 5% as of February 2024. Home prices in Ohio were up 9% compared to last year, hitting a $227,800 median price, according to Redfin. Sales prices had the most substantial jump in Maple Heights, Kettering, and Springfield, where increases all topped 30%.

Things can look a bit intimidating for first-time homebuyers seeking a home mortgage loan in Ohio in 2024. Don’t fret, though, as qualifying for a mortgage and affording a home may be more within your means than you think.

The Ohio Housing Finance Agency (OHFA) offers a variety of programs for low- and moderate-income first-time and repeat homebuyers meant to help them achieve homeownership.

💡 Learn about Ohio first-time homebuyer programs

Michigan

With Detroit’s revitalization, the popularity of resort towns on the shores of the Great Lakes, and the proximity to wilderness in the Upper Peninsula, Michigan real estate is bustling. The good news for first-time homebuyers: The Wolverine State is still relatively affordable.

Sales in Michigan are up about 1% year over year as of January 2024 and home prices are up 9.2% this past year. But despite that last stat, there’s good news for first-time homebuyers: The median sales price is $228,000, according to Redfin, which is far below the national median existing-home sales price of $379,100.

First-time homebuyers looking to settle in Michigan may find help through the Michigan State Housing Development Authority .

💡 Learn about Michigan first-time homebuyer programs

Indiana

At $228,552, Indiana’s average home value in early 2024 is up 4.6% year over year, according to Zillow. Even with that increase, typical costs here are lower than the numbers for America as a whole. That doesn’t mean buying a home for the first time is easy, but it certainly places home ownership within reach for more people, especially when state programs offer a helping hand in terms of their down payment, mortgage, and closing costs.

There’s lots of helpful information on the home-buying process available to Hoosier house-hunters, and there are a number of programs that can defray the costs of buying a home. First-time buyers, especially, might want to have a look.

💡 Learn about Indiana first-time homebuyer programs

Wisconsin

Home prices increased 5.5% annually here as of January 2024. And the number of homes sold rose 6.5% as the market began to warm up. The median sale price of a house in the state is $274,400, reports Redfin.

Recommended: Guide to Choosing a Mortgage Term

While the uptick in cost may cause concern for those saving to purchase a property, there are many opportunities to be had for the qualified first-time homebuyer in Wisconsin.

💡 Learn about Wisconsin first-time homebuyer programs

Illinois

High prices, low inventory, and an influx of outside investors and cash buyers make diving into the market as a first-time buyer in Illinois feel daunting.

According to Redfin, the median sale price in Illinois hit $265,900 in January 2024 — an 11.2% year-over-year increase. But in some communities, the numbers have been much higher. In Winnetka, where home prices were up 40.2%, the median purchase price was $1.373 million. Marion saw an 82.3% jump. Fortunately homes there are still relatively affordable, at a median price of $174,250.

Another bit of good news: The state and some counties offer financial assistance. There also are longstanding federal programs that could improve a buyer’s chances of success.

💡 Learn about Illinois first-time homebuyer programs

Minnesota

The Land of 10,000 Lakes has seen a relatively modest 2% year-over-year increase in home values during 2023. Currently, the average Minnesota home value is $316,980, according to Zillow, which is slightly below the national average.

There are several opportunities for the first-time homebuyer in Minnesota through state programs that give assistance with mortgage rates and down payment and closing costs to those who qualify.

💡 Learn about Minnesota first-time homebuyer programs

Iowa

Homes in the heartland of Iowa remain relatively affordable, with an average value of $205,988 vs. the national figure of $342,941, according to Zillow. A number of homebuyer assistance programs also exist that can make the home-buying journey more affordable for Hawkeye State shoppers.

Most of these programs are available through the Iowa Finance Authority (IFA) and can especially be of help to first-time buyers.

💡 Learn about Iowa first-time homebuyer programs

Missouri

The real estate market in Missouri has remained fairly calm, with the state’s average home value of $234,949 nicely below national averages.

The good thing about being a first-time homebuyer with a low to moderate income is that state and local programs offer mortgages and down payment assistance to those who qualify. Even better: You qualify as a first-timer if you have not owned a home in three years.

💡 Learn about Missouri first-time homebuyer programs

North Dakota

Thinking about moving to North Dakota? The state has a lot going for it. In addition to tons of open space, gorgeous landscapes, and a relaxed way of life, the cost of living is lower than the U.S. average and home prices in the state dropped a tiny bit in the year ending February 2024. The average home value in North Dakota is now $248,022, according to Zillow. That means there are plenty of opportunities to find your affordable dream home in North Dakota.

There are several state programs that provide financial assistance and low-interest mortgage loans to the first-time homebuyer in North Dakota. Many of these programs are designed to help low- to moderate-income buyers, and they may have income and purchase price limits, a required credit score, or other criteria you’ll need to meet.

💡 Learn about North Dakota first-time homebuyer programs

South Dakota

The Mount Rushmore State saw a 6.8% increase in home prices from February 2023 to February 2024, however the cost of living remains relatively low here compared to other parts of the country. The median home price in South Dakota is now $311,500, according to Redfin.

If you lack the money for a down payment or aren’t sure how you will afford a mortgage, programs in the state may be able to provide assistance.

💡 Learn about South Dakota first-time homebuyer programs

Nebraska

Considering buying a home in Nebraska? Now is a good time to do so. The median price of a home there is $274,600. That’s up 5.4% year-over-year as of February 2024 but still below the national average.

The first-time homebuyer in Nebraska can also get financial assistance through state programs. Here’s what you need to know as you start your home shopping.

💡 Learn about Nebraska first-time homebuyer programs

Kansas

Though their housing market is generally known for being more affordable than most, first-time homebuyers in Kansas are facing many of the same challenges as buyers across the country. Prices have been rising. Inventory is low. And the competition for available homes can be fierce.

The median price of a home in Kansas was $290,300 in January 2024, a 2.6% increase in 12 months. In some areas, such as Leavenworth, Shawnee, and Leawood, the price increases were greater than 20%.

Fortunately, buyers who are struggling with the costs of purchasing their first home in Kansas may be able to get financial help through programs offered by the state and some cities. There also are longstanding federal programs that may improve a buyer’s chances of success.

💡 Learn about Kansas first-time homebuyer programs

The Takeaway

Qualifying first-time home buyers have many options available to them in the Midwest, including down payment assistance. If you’re looking to buy your first home and aren’t sure how to get started, looking at a list of homebuyer programs in your state is a great place to start. Once you know what kind of assistance you may qualify for, it’s a good idea to estimate just how much house you can really afford using a home affordability calculator.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

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Photo credit: iStock/Nicholas Smith

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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House trading involves selling your home to someone while buying their property. You essentially swap residences. This can spare both parties the irritation of showings and the expense of agent commissions while giving each party their new next home.

Trading homes isn’t done every day, but it can occasionally be an option that works for the parties involved. Learn more here.

What Is House Trading?

House trading means that you sell your home to someone and simultaneously buy their place.

You’re likely familiar with home exchange programs when it comes to vacations. You dash off to a lovely apartment in Paris, and the owners come to the Big Apple to enjoy your apartment. Both parties enjoy a vacation with a much lower price tag.

With house trading, this kind of switch is made permanent. Perhaps you’re outgrowing your compact two-bedroom house as your family grows, and the empty nesters down the street in a four-bedroom are looking to downsize their home. You could proceed with a house trade, selling and buying each other’s places simultaneously.


💡 Quick Tip: SoFi’s award-winning mortgage loan experience means a simple application — we even offer an on-time close guarantee. We’ve made $7.5 billion in home loans so we know a thing or two about what makes homebuyers happy.‡

How Does House Trading Work?

Think of a house swap as a win-win. You want to sell your house. You find a home you like, and the homeowner is interested in buying your home too. It happens.

What comes next? You trade. This means there will be two simultaneous transactions. You sell your home to the Joneses, and they buy yours, typically on the same day. Because you’re selling and buying at the same time, it’s much like a trade. This is not a simple transaction, though. You want the stars aligned on that day.

However, there are some similarities to buying a home the traditional way. Expect the basics of the home-buying process to be the same:

•   Qualifying for a mortgage

•   Getting a home inspection

•   Doing a title search

•   Closing with simultaneous transactions.

You pay off one mortgage, if you have one, and take on a new one if needed. At the same time, the other party will sign their purchase and sale agreement.

As much as doing all this at once may feel overwhelming, the upside is that you won’t have two mortgages on your hands at the same time. If both homes are owned free and clear, then the only money matters are transfer taxes and closing costs.

You’ll probably want a real estate lawyer who knows how these deals work at your side.

Recommended: How to Buy a House When You Already Have a Mortgage?

What If the Homes Are Unequal in Value?

It’s quite probable that the two homes won’t be of equal value. That’s not a deal-breaker, though. What matters is whether each house meets the needs and desires of the other party.

It’s important for both parties to order home appraisals. If one home is more valuable than the other, the buyer of the more expensive home pays the seller the difference at closing.

How Common Is House Trading?

Trading homes is not something that happens every day, but as people continue to search for creative ways to fulfill their dreams and technology helps connect like-minded folks, house trading has its place in the array of home-buying options out there.

Recommended: What Is a Bridge Loan and How Does It Work?

Pros and Cons of Trading Your House

Here’s a look at the upsides and downsides of trading houses.

Pros

There’s something to be said for this unconventional way of buying and selling a home.

•   You may be able to buy a house without a Realtor®. If there is no real estate agent involved in the trade, both buyer and seller keep the money they would have shelled out to their agents.

•   You eliminate some of the hassle of moving day. Because both parties are working in concert, it makes orchestration of the move easier.

•   You skip the whole dog-and-pony show of potential buyers traipsing through your home and the stress of having it look perfect for showings.

•   You also may find that getting financing when trading a home is easier. Some homeowners encounter hurdles qualifying for a mortgage before their home is sold. However, if you have a contract to sell your current house (which you would in a home trade), your lender won’t count your monthly mortgage payments as debt if you apply for a mortgage.

Having this improved debt-to-income ratio can allow you to qualify for better terms on your new mortgage, which just might save you a ton of money as well.

Cons

Trading isn’t without its issues.

•   If you’re in a hurry to move, you may not be able to find someone who wants a house swap as quickly as you want to move.

•   In a big-picture way, house trading may mean you have fewer options, you may not get the neighborhood you have in mind, or you may not find a home with all your dream features.

•   If you owe more on your mortgage than your home is worth, you may have trouble getting financing. The only way a trade would work is if you pay the lender the difference of what you sell your house for and what is still owed on the mortgage.

•   If for some reason the purchase and sale don’t happen at the same time, you could be stuck for a time with two mortgages.

Pros of Trading Homes	Cons of Trading Homes
You may not need to use a real estate agent	May not find a home as quickly as you want
Getting financing may be easier	Fewer options
Avoid the hassle of showing your home to multiple potential buyers	Could have to temporarily pay two mortgages

Trading Houses vs Conventional Selling

With trading there’s a good chance you will be able to avoid using a real estate agent if you find your trading partner on your own, be it a relative, colleague, friend of a friend, or from a website. You can also avoid the hassle of staging your home and showing it to prospective buyers.

There are some things that are pretty much the same.

Both parties may need new mortgages, and both may want home inspections. Both will probably want attorneys present.

Trading Homes	Conventional Sale
Likely no real estate agent	Usually buyer’s and seller’s agents involved
Small market	Wide market
Deal with one buyer	Handle multiple offers

The Takeaway

Trading homes is a viable option for house hunters who find a trading partner who wants to own their home. While the home exchange approach is decidedly nontraditional, the steps of securing a home loan (if needed) and closing will be familiar.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

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Photo credit: iStock/AndreyPopov

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

^‡SoFi On-Time Close Guarantee: If all conditions of the Guarantee are met, and your loan does not close on or before the closing date on your purchase contract accepted by SoFi, and the delay is due to SoFi, SoFi will give you a credit toward closing costs or additional expenses caused by the delay in closing of up to $10,000.^ The following terms and conditions apply. This Guarantee is available only for loan applications submitted after 04/01/2024. Please discuss terms of this Guarantee with your loan officer. The mortgage must be a purchase transaction that is approved and funded by SoFi. This Guarantee does not apply to loans to purchase bank-owned properties or short-sale transactions. To qualify for the Guarantee, you must: (1) Sign up for access to SoFi’s online portal and upload all requested documents, (2) Submit documents requested by SoFi within 5 business days of the initial request and all additional doc requests within 2 business days (3) Submit an executed purchase contract on an eligible property with the closing date at least 25 calendar days from the receipt of executed Intent to Proceed and receipt of credit card deposit for an appraisal (30 days for VA loans; 40 days for Jumbo loans), (4) Lock your loan rate and satisfy all loan requirements and conditions at least 5 business days prior to your closing date as confirmed with your loan officer, and (5) Pay for and schedule an appraisal within 48 hours of the appraiser first contacting you by phone or email. This Guarantee will not be paid if any delays to closing are attributable to: a) the borrower(s), a third party, the seller or any other factors outside of SoFi control; b) if the information provided by the borrower(s) on the loan application could not be verified or was inaccurate or insufficient; c) attempting to fulfill federal/state regulatory requirements and/or agency guidelines; d) or the closing date is missed due to acts of God outside the control of SoFi. SoFi may change or terminate this offer at any time without notice to you. *To redeem the Guarantee if conditions met, see documentation provided by loan officer.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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