SCENARIO 6: Loan Originated Mid-Month, Last Month NOT Paid, Mid Month Payoff

In this third scenario, the borrower has made all their previous payments for January, February and March, but not April 2021. They want a payoff commencing on May 30 2021.


Quick Links

Record Payments

Click on the Record Payments worksheet.

In our example image below, you will see that all the payments are up-to-date and entered, but the last payment for April 2021 has been accrued as it was not received at all.

You do NOT need to accrue the payment for May 15 2021 as this is collected at Payoff. However, if you have received a payment for May 15 2021 then you would enter it.

Record Payments worksheet mid month originated loan two payments unpaid

To create your Payoff, click on the Payoff worksheet.

In our example, the date we want the Payoff to start is May 30 2021.

We entered 5/30/21 in Cell G2.

The lower section of your Payoff Statement will now look like the example below:

Image

In our example loan, the loan is interest only and there is a balloon of $125,000.00.

No extra payments have been made to principal, so the outstanding balance is still $125,000.00.

  1. On May 30 2021, you will notice that the Payoff Amount is $126,854.39. This is because you are paying off in May and the April payment was not received. The May payment hasn't already been received and, because it's now the 30th of the month, a further 15 days of interest are due. The April payment includes Late Charges as these were accrued on the Record Payments worksheet.
  2. There is $200.00 shown as Charges, as this is what was entered in Cell G4.
  3. Additional Late Charges shows Late Charges for May, as the days before late is 10 days and the Payoff is late from May 25 2021. This Late Charge is only for May 2021 as it relates to that payment. Any previously accrued Late Charges are included in the Payoff. From June 15 2021 there is no Late Charge shown, as this is the beginning of the June 2021 month and the payment will not be late until June 25 2021.
  4. The amount in escrow to be returned to the borrower. If for any reason there are amounts that are NOT to be returned to the borrower as they have been spent, then you need to close out the escrow in Record Payments. Learn more about Escrow.
  5. The Total Payoff is the Payoff Amount + Charges + Late Charge if applicable - Escrow.
On May 10 2021, the Payoff you are expecting is therefore $126,090.85.

REMEMBER: If you DO NOT want Late Charges showing in (3) above, then click on the Dropdown in Cell O25 and select 'No' and all further Late Charges for the Payoff month will be zero. For example, you agreed with your borrower the final payment would be paid at Payoff so you're not waiting for a check to clear before closing, so charging a Late Fee is not appropriate.

What do you do when you receive your Payoff?
Learn how to apply your Payoff and close off your loan.


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