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Understanding the Mortgage Payoff Process

Congratulations—you're ready to pay off your mortgage! There are a few things you'll need to do to get the process started. We can help guide you on what to expect and the steps to take. 

Steps To Pay Off Your Loan

 

  1. Step 1

    Request a payoff quote

    Paying off your mortgage means covering your principal balance and some additional expenses associated with your loan. A payoff quote includes items like a recording fee, interest you've incurred on your loan since your last payment and closing costs. You can get a payoff quote by:

    • Signing in to HomeSquad and going to the Payment Dashboard. Select View Payoff Quote to see the amount.
    • Sending us an eMessage via digital banking.
    • Calling us at 1-888-842-6328 ET, Monday-Saturday, 7 am to midnight and Sunday, noon to midnight.

    After we send you a payoff quote, any funds you have in your escrow account will be placed on hold. That means any bills due while you're in the process of paying off your loan, such as taxes and insurance, won't be processed. If you'd like to have your insurance or taxes paid from escrow during this time, please contact us. Once the payment is processed and reflected in your account, you'll need to order a new payoff quote to get your updated payoff amount. 

  2. Step 2

    Complete this form (optional)

    If you'd like to have any refund or remaining escrow funds deposited into your Navy Federal checking or savings account after your loan is paid, complete the Authorization for Direct Deposit of Mortgage/Equity Refunds form before you pay off your loan.

    If you don't fill out the form, any remaining funds will be mailed to your address on file.

    Tips:

    • If you have automatic payments set up via Web Bill Pay, make sure to cancel after you pay off your loan. If you're enrolled in any of our other automatic payment services, payments will be canceled automatically. 
    • If your regular monthly payment is scheduled before your mortgage payoff date, please make this payment to avoid overdue bill fees. Any overage you pay will be returned to you after you pay off your loan.

  3. Step 3

    Submit payment

    Your payoff quote will explain how to submit the funds to pay off your mortgage. Options include a wire transfer, a transfer from one of your Navy Federal accounts, mailing a check or stopping by one of our branches.

    You may be able to use funds remaining in your escrow account to pay off your mortgage. If you'd like to do this, please let us know.

    Your payoff will be effective on the day we receive your payment, even though it takes up to 2 business days to complete the process. 

What To Expect Once Your Loan Is Paid Off

Remaining Funds

If there are overage payments or remaining funds in your escrow account, we'll return them to you within 10 business days after your loan payoff is complete. We'll deposit the funds to your designated account or send you a check to your address on file.  

Taxes and Insurance

Since you'll be responsible for making future taxes or insurance payments, it's important to notify the appropriate tax office and your insurance company to let them know your loan is paid in full and find out how to submit future payments.  

Paid In Full Letter and Stamped Note

Within 2 weeks of your payoff date, a Paid in Full Letter and a copy of your note stamped "Lien Paid and Satisfied" will be mailed to you.

Lien Release

After your loan is paid in full, we'll send a Loan Satisfaction, also known as a lien release, to the county where your property is located. They'll record the satisfaction document and send it back to us. Then we'll mail it to you at your address on file. This process can take up to 90 days.  

Mortgage Payoff FAQs

No, there are no penalties for paying off your loan early.

A final mortgage statement won't be issued; however, a Paid In Full letter will be sent to you. If you need documentation showing the final payment on the loan, you may submit a request for a payment history via eMessage or by calling us at 1-888-842-6328 ET, Monday-Saturday 7 am to midnight and Sunday from noon to midnight.

You'll receive a Mortgage Interest Statement by Jan. 31 on the year after the tax year in which your loan was paid in full.