Mortgage  Question?
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Does Property Value Affect How Much Owe On Mortgage?

I would like to payoff my mortgage but my lender told me they need to evaluate my property to determine how much money I owe. Does this make sense? Does my current property value affect how much I owe on my mortgage?

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
, Trusted Mortgage Expert with 45+ Years of Experience

It is bizarre that your lender indicated that it needed to "evaluate" your property to determine how much you owe on your mortgage. This is the first time I have heard of this type of behavior from a lender.

To determine the amount of money you owe to payoff your mortgage, you should request that your lender provide a document called a Payoff Demand Statement, or sometimes referred to simply as a Payoff Statement. The Payoff Statement outlines the payment required to satisfy all outstanding obligations under the terms of the mortgage, including your mortgage balance, current monthly payment due and any overdue balances and late fees. The amount of money required to payoff your mortgage completely is based on your mortgage balance and the terms of your loan as outlined in your mortgage note and should not fluctuate based on the current value of your property, unless you have a shared appreciation program in place which is unlikely. If you pay property taxes and homeowners insurance into an escrow or impound account, your current property value may impact the amount of property tax or homeowners insurance you pay, but the property value does not affect the specific amount you owe to payoff your mortgage.

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About the author

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR.  Harry is a licensed mortgage professional (NMLS #236752). More about Harry

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