Short answer:
Your payoff amount includes your remaining principal balance plus any accrued interest and applicable fees as of the payoff date.
What’s happening
Your principal balance is not the same as your payoff amount.
A payoff quote typically includes:
- Remaining principal balance
- Accrued interest through the payoff date
- Late fees (if applicable)
- Escrow advances (if applicable)
- Recording or release fees (varies by state)
Interest accrues daily. Even if you pay off your loan mid-month, interest will be included up to the selected payoff date.
If you have funds remaining in escrow, those are typically refunded separately after your loan is paid in full.
What it means for you
It’s normal for your payoff amount to be higher than your principal balance.
This does not mean extra charges were added unexpectedly. It reflects:
- Daily interest
- Any unpaid amounts on the account
- State-required release costs
Your escrow balance is not applied automatically unless specified in the payoff calculation.
What you should do next
- Review your payoff quote carefully
- Confirm the payoff date matches your closing or payment plan
- Contact us if you see unfamiliar charges
Important dates, fees, or risks
- Interest continues accruing until the loan is fully paid
- Escrow refunds are processed separately after payoff
- Recording fees vary by state
Contact us if…
- You need clarification on a specific line item
- Your payoff amount appears inconsistent with your quote
- You need help understanding escrow refund timing
This article is for general information only and does not change the terms of your loan.
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