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What this task is

This task collects a payoff demand or current payoff statement for an installment loan (secured or unsecured) that the borrower plans to pay off in connection with the new mortgage. The payoff statement shows:
  • The total amount required to satisfy the loan, and
  • Any fees or interest included in that payoff.

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When this task is required

This task is required when:
  • An installment liability is marked to be paid off at or before closing, and
  • The lender intends to remove the associated payment from the borrower’s qualifying DTI after payoff.
Installment loans may include:
  • Auto loans,
  • Personal loans, or
  • Other fixed-term debts.

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Why this task is required

Underwriters and closing teams need precise information to:
  • Ensure the correct payoff amount is funded and applied, and
  • Confirm that the liability will be fully satisfied, not left with a residual balance.
This documentation:
  • Supports accurate calculation of cash to close and net proceeds, and
  • Justifies the removal of the debt from post-closing DTI.
Without it, the lender may be forced to continue including the full payment in the borrower’s obligations, which can impact qualification.

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Documents needed to resolve this task

To satisfy this task, provide:
  • A formal payoff statement or current payoff quote from the installment loan servicer:
    • Showing the loan number, borrower name, payoff amount, and good-through date.
    • Including any per diem interest or fees that might affect the final payoff.
  • If the payoff has already been made, also provide:
    • Proof of the payment transaction and, when available, a statement showing the updated or zero balance.
These documents allow the underwriter and closing team to ensure the installment debt is fully resolved for post-closing qualification purposes.