Payoff statement: the number the sale pays
A payoff statement is the lender's written figure for paying your loan in full. Illinois law describes it as the unpaid balance, with principal, interest and any other charges due, plus the interest for each day [2].
You, or someone acting for you such as your closing agent, ask for it in writing. The request goes to your servicer, the company you have been told to send your payments to [2]. Federal rules say the servicer must send an accurate payoff statement within seven business days of a written request [3]. A few loans get a reasonable time instead, such as a reverse mortgage [3].
Interest counts by the day [2], so the payoff changes with the closing date. Here is an example, not a real loan. Say a payoff statement shows $150,000 good through June 1, plus $25 a day. If closing lands on June 5, four days are added, and the payoff is $150,100.
Closing Disclosure: where the payoff shows
The Closing Disclosure is the federal form that lists the money at closing. Its seller's side, the Seller's Transaction table, adds up what is owed to you and what you owe [5]:
Line on the seller's side | What it holds |
|---|---|
Total Due to Seller at Closing | The sale price and other amounts owed to you [5] |
Payoff of First Mortgage Loan | The loan with the first lien on the home, paid off at closing [5] |
Payoff of Second Mortgage Loan | A loan with a second lien, paid off at closing [5] |
Total Due from Seller at Closing | The payoffs, your closing costs and other amounts you owe [5] |
Cash | The difference, marked as due to you or due from you [5] |
A lien is a lender's legal claim on the home. If the Cash figure is positive, it is due to you. If it is negative, it is due from you at closing [5].
For the transfer tax, here is how much the Illinois transfer tax is when you sell.
Mortgage release: two routes in Illinois
Once the loan is paid, the mortgage has to come off the county record. Illinois's Mortgage Act says paying the debt in full under a payoff statement ends the lender's lien [1]. The release is the paper that shows it on the record. Illinois has two ways to record one [1][2]:
Certificate of release | Lender's release | |
|---|---|---|
Who handles it | The title insurance company, licensed in Illinois to insure who owns real property, or its agent [2] | The lender, who delivers it to you or to the county recorder [1] |
Which loans | A mortgage on a 1 to 4 family Illinois home, original loan under $500,000, not trust deeds [2] | A mortgage not released by a certificate [1] |
When | Delivered for recording with the deed or the new mortgage [2] | Within 30 days after payment [1] |
A certificate of release, once recorded, releases the lien [2]. The title company can record one only when the loan was paid under the lender's written payoff statement [2].
If the lender mails its release to you instead, Illinois law says it must carry a bold notice at least 1/4 inch tall [1]. The notice tells the owner to file the release with the recorder or registrar of titles where the mortgage was filed [1]. If one comes to you, take it to the county recorder.
Escrow refund: what is left comes back
Illinois law defines an escrow account as an account the lender sets up that you pay into with your payments, and that the lender pays your property taxes from [11].
Federal rules set the escrow refund. Once the loan is paid in full, the servicer must return what is left in the escrow account within 20 days [4]. Weekends and legal public holidays do not count toward the 20 days [4]. The rules also let the servicer subtract leftover escrow from what is owed on the loan instead [4].
Property taxes come up at closing too. Here is when Illinois property taxes are due after a sale.
Prepayment penalty: what your note says
A prepayment penalty is a fee some lenders charge when a loan is paid off early. The CFPB says not all mortgages have one, and that you would have agreed to it when you closed on the home [6]. It says one typically applies only if the whole balance is paid within a set number of years, for example because you sold [6]. The CFPB gives three or five years as the usual window [6].
Illinois law limits it too. The Illinois Interest Act says a home loan with an interest rate above 8 percent a year may not provide for a prepayment penalty [7]. The Act lists exceptions, including FHA and VA loans [7]. Your payoff statement lists the charges due on your loan [2].
County records: checking the release
The release is filed with the recorder of the county where the mortgage was recorded [1][2].
- Will County. The Will County Recorder says documents are typically available within 5 days of recording. Its records can be searched by name, PIN or address, each as its own search, through its online search services [8].
- Grundy County. The Grundy County Recorder has free public terminals at its office. Grundy County's online searches run through pay-as-you-go and subscription services, with document images from 1986 to the present [9].
How to sell a house with a mortgage in Illinois
- Find your servicer Your servicer is the company you have been told to send your loan payments to [2].
- Ask for the payoff statement in writing You or your closing agent asks in writing. The servicer has seven business days to send it [3].
- Read the seller's side of the Closing Disclosure Find Payoff of First Mortgage Loan, any Payoff of Second Mortgage Loan, and the Cash line [5].
- Watch for the escrow refund The escrow refund is due within 20 days after the loan is paid in full, not counting weekends and legal public holidays [4].
- Check the release on record Look for the certificate of release or the lender's release at the county recorder, and take any release mailed to you to the recorder [1][2][8][9].
What it means if you sell in Illinois
When you sell an Illinois home that still has a mortgage, three papers do the work. The payoff statement sets the figure, the Closing Disclosure shows it, and the release clears the mortgage from the county record [1][2][5]. Ask for the payoff early, read the seller's side of the Closing Disclosure, and check the county record after closing.
Getting ready to sell a home that still has a mortgage? The two steps below are where to start.
Complimentary Home ValuationSchedule Your Seller Consultation
