I was at another closing today and my client questioned the amount the title company showed as their mortgage payoff.
I explained that when you get your figure online or from your last statement, that was for the principal balance on a given day; however at closing they will take that figure and add the cumulative interest between that date and the date of closing. Remember when you bought your home with a mortgage, they let you skip a month's payment at the beginning? Well, you end up paying it back at the end.
However; in this case, the amount still appeared to be too high. It turns out they had made a payment after the title company had received their loan payoff so there should have been less principal and less accumulated interest. They just ordered a new payoff amount and corrected it while we were still at the closing so it turned out fine, but if you are counting on a specific amount at closing (say to buy your next house, etc.) it pays to double check.
If my client didn't catch that, it would have taken a few days or weeks for their lender to reimburse them for the overpayment.
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