Mortgage Pay Off: Before the closing, you will sign a release for the Title Company or Attorney to get the amount that will be owed at the day of closing. This will allow the Closing Company to prepare the closing documents, and they will issue a check out of your proceeds at the closing to pay off your outstanding mortgage.
Lines of credit or Equity lines: As with the mortgage payoff, you will have to authorize the closing company to get this information. If there are any amounts owed, they will also be paid off, and any lines of credit will be closed.
Prepayment Penalty: Sellers often believe that the only amount they owe is what is indicated on their last statement. However, this is not always the case. There may be a prepayment penalty included in your mortgage, and you could also owe interest based on the specific closing date of the month.
Unpaid Taxes/Liens: This is why title work is essential before closing to see if there are any liens or unpaid taxes on the title. These items will also have to be paid on the day of closing. The closing company cuts these checks out of your proceeds and pays them on your behalf.
Special Assessments: Special assessments are things like water, sewer, road, or other local government improvements that were assessed to the property. In most cases, they must be paid off; in others, they can be assumed by the buyer. If they are to be paid off, again, the closing company will pay these out of your proceeds.
