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What this task is

This task collects a payoff or current statement for a revolving credit account (such as a credit card or line of credit) that will be paid off in connection with the new loan. The statement should show:
  • The current outstanding balance, and
  • Any payoff amount or instructions if a specific payoff is required.

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When this task is required

This task is required when:
  • A revolving liability is indicated as being paid off at or before closing, and
  • The underwriter plans to remove the payment from the borrower’s ongoing obligations after proof of payoff.
Examples include:
  • Paying off a credit card to reduce total revolving utilization.
  • Closing or paying off a home equity line of credit when required by guidelines.

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Why this task is required

Lenders need to:
  • Confirm the exact balance that must be paid to bring the account to zero, and
  • Document the removal of that liability from the borrower’s ongoing obligations.
The payoff or current statement:
  • Helps the closing team fund the correct payoff amount (if paid at closing).
  • Provides evidence for underwriters and auditors that the revolving debt was properly addressed.
  • Supports accurate calculation of post-closing DTI and credit utilization.
Without this documentation, the lender may be required to keep the full payment in DTI calculations, even if the borrower intends to pay off the debt.

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Documents needed to resolve this task

To satisfy this task, provide:
  • A recent statement for the revolving account that:
    • Identifies the account holder(s) and account number, and
    • Shows the current balance and, if available, any payoff or closing instructions.
  • If a formal payoff letter is issued for the revolving account, provide that document as well, especially when the payoff is being processed through closing funds.
These materials enable the underwriter and closing team to fully remove the revolving debt from the borrower’s obligation profile once it is paid.