What is a Payoff Letter?There are many steps to purchasing a home, and one of those steps is obtaining a mortgage payoff letter. The payoff letter is a simple document that describes how the homeowner can go about paying off the loan on the home in question.This document will provide information that is needed to prevent confusion between the mortgage holder and the bank. Even though first time home buyers are not yet mortgage holders at the current time, it is likely that the home they wish to purchase is still under a mortgage contract. The letter gives information about the original mortgage. It will contain details about the condition of the current loan on the home, and about what it will take to pay it off in full. 
Since this information will be needed at the time of closing, you can see why its important. At this time, the title company that is handling the final transfer of the property will determine just what amount of the new mortgage will be needed to pay off the original mortgage and deduct that from the sellers portion. A mortgage payoff letter is all part of the process of providing the new owners with a clear title to the home they are buying. While this is not the only documentation that is required in order to do this, it is one of the most consequential. No buyer would want to be handed the keys of their new home to find out later down the road that the seller was leaving them with a larger debt that was not rightfully theirs. This official documentation is simple to acquire, but may not be available to the new buyer unless they have made arrangements through the owner of the property. You will be able to get information about how to obtain this letter by speaking with your real estate agent or lending institution. With this in mind, it should be easy to understand why even the home buyer is requested to present this letter as part of the documentation needed to complete the transaction when purchasing property. How Does This Help My Credit Scores?Perhaps you've paid off a previous loan on a house. This is sometimes still showing as a debt on your credit report. For example, if you recently sold a house, you would obtain a mortgage payoff letter from the holders to show your new lender that you had paid the loan successfully. Loan payoffs look great on your credit report. If the payoff doesn’t show on your credit report, then you need to dispute this item and send a copy of your letter as proof. So be sure you have a this letter in your file. A payoff on your credit report shows you are managing your credit responsibly. Creditors like to see that and its especially important when applying for a mortgage. You want them to lend you the money, right? So whatever shows you to be a good risk is a great thing! Stay up-to-date with all that is new at First Time Home Buyer Solutions. Subscribe to the RSS feed at the bottom of the navigation bar over on the left.Leave What is a payoff letter? and return to our Credit Repair Letters main page.
Would You Like Your Own Website?
Click Here for FREE Details. © 2005-2011 All Rights Reserved Powered By SBI!  |
Most Popular Pages
Looking for some First Time Home Buyer Programs? This page reveals where they are and how they work.
Discover the coolest information on FHA loans for the First Time Home Buyer. Do you know which one is best for you?
Real zero down home loans are hard to find. Revealed here are true no money down loans saving you money. Government program.
Understanding how credit scores work is the beginning of the mortgage process. Know your credit scores before you apply for a mortgage. Many free details found on this page.
Follow Us on Twitter
First Time Home Buyer Solutions