What is typically required before a homeowner can sell their property that is subject to a mortgage?

Before a homeowner can sell a property that is subject to a mortgage, obtaining a loan payoff statement is a crucial step in the process. This statement is provided by the lender and outlines the total amount that needs to be paid to fully satisfy the mortgage.

When a property is sold, the mortgage must be paid off in order to transfer clear title to the new owner. The loan payoff statement not only indicates the current balance owed on the mortgage but may also include any applicable fees, interest calculations, and the effective date of the payoff. This information is essential for the closing process, as it determines how much money will be allocated to the lender during the sale.

In terms of the other options, while a settlement statement outlines the financial details of the transaction and is important at settlement, it is not directly required before a sale can transpire. A title report is necessary to confirm the property’s ownership and any encumbrances, but it doesn’t address the mortgage payoff directly. The release of lien is a document that would be issued after the mortgage has been paid off, signifying that the lender no longer has a claim against the property. Thus, obtaining a loan payoff statement is the critical requirement prior to selling a mortgaged property.