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

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

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

To determine the amount of money you owe to payoff your mortgage, you should request that your lender provides a payoff demand statement, which is also referred to as simply a payoff statement. This document outlines the payment required to satisfy all outstanding obligations under the terms of your mortgage including your principal loan balance, current monthly payment and any past due interest, penalties and late fees.

The amount of money required to payoff your mortgage is based on your current loan balance and your loan terms as specified in your mortgage note.  Unless you entered into a shared appreciation program, the amount you owe should not change based on your value property value.

With a shared appreciation program, you receive a loan in exchange for equity in your home but you forgo a portion of any future increase in your property value.  You are required repay the shared appreciation loan when you sell your home, refinance your mortgage or decide to pay off the loan.  

The amount you owe to pay off the shared appreciation loan depends on your current property value, with the higher the value, the more money you owe.  This is the one scenario when the amount of money you owe may change based on your property value.

We should highlight that shared appreciation programs are relatively uncommon. Plus, these programs do not affect the terms of your first mortgage including your monthly payment and loan balance. 

The only other explanation for your question is if you pay property taxes and homeowners insurance into an escrow or impound account.  In this case your current property value may impact the tax or insurance you owe and you may be required to address a shortage in the account before you can pay off your mortgage in full.  These expenses, however, do not directly affect the amount you owe on your mortgage.

In closing, it is highly unusual that your lender indicated that it needed to evaluate your property to determine how much you owe on your mortgage. I recommend that you ask your lender for a clarification and request a payoff statement to understand how your current mortgage balance is determined.

If you cannot resolve the issue with your lender, I recommend that you contact the Consumer Financial Protection Bureau (CFPB) to look into the matter further.  I have included contact information for the CFPB below.

Consumer Financial Protection Bureau


“What is a payoff amount? Is my payoff amount the same as my current balance?”  CFPB.  Consumer Financial Protection Bureau, September 25 2017.  Web.

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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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