A mortgage payoff letter can come in two forms. One form tells borrowers the remaining principal amount and interest they have to pay to close out the loan.Create a Loan Payoff Letter online and download it as a PDF or Word document. Customize and print a blank Loan Payoff Letter for free. Creating a payoff letter is essential to any loan or mortgage repayment process. Our free templates and this guide can help you get started. That's where a mortgage payoff statement comes in. It lays out each fee and dollar still due before you completely pay off your mortgage. A payoff letter provides instructions on how to pay off a loan with a lump sum before the loan term ends. Learn how payoff letters work.