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Lenders can also send you a payoff letter after you have finished paying off a loan. This letter serves as confirmation that your loan has been repaid in full, and your account has been closed. It's most often requested so that customers can prove to other lenders that they have no other outstanding debts.
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 only shows your loan balance and the amount due for your next monthly payment.
A payoff statement or a mortgage payoff letter will typically show the balance you must pay in order to close your loan. It may also include additional details, such as the amount of interest that will be rebated due to prepayment, the remaining payment schedule, rate of interest, and money saved for paying early.
That's because the difference likely is because of the way the interest of your loan is calculated. Basically, your balance is what you currently owe, and your payoff is what you owe plus interest that accrues from the statement date and a specific payoff date.
A payoff statement for a mortgage, sometimes referred to as a payoff letter, is a document that details the exact amount of money needed to fully pay off your mortgage loan. The payoff amount isn't just your outstanding balance; it also encompasses any interest you owe and potential fees your lender might charge.