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What is your payoff amount? Find out before you decide to sell

In deciding whether now is a good time to sell your home, it’s important to know your current mortgage payoff amount. That’s how much you will actually have to pay to satisfy the terms of your mortgage loan and pay off your debt.

Your payoff amount is different from your current balance, which is the amount you owe as of the date of your statement. Your payoff amount also includes the payment of any interest you owe through the day you intend to pay off your loan, and it may include other fees you have incurred and not paid.

If you are paying off your loan early, you may have to pay a pre-payment penalty.

Whether you can be charged a penalty for paying off your mortgage early depends on what type of mortgage you have and the specific terms of your mortgage loan.

Some loans have pre-payment penalties during the first years of the loan. These fees may impose substantial costs on homeowners with adjustable rate mortgage loans who want to refinance before their rates increase, and some fixed mortgages have prepayment penalties as well.

If you are considering paying off your mortgage, you can request a payoff amount from your lender or servicer. If your loan is a “closed-end” loan secured by your “principal dwelling,” once you request a payoff amount servicers must provide you with an accurate statement of the total amount that would be required to satisfy your obligation in full as of a specified date. You can have only one principal dwelling at a time, so this does not include a vacation or other second home.

Courtesy of the federal Consumer Financial Protection Bureau