Creating a payoff letter is essential to any loan or mortgage repayment process. Our free templates and this guide can help you get started.A letter of explanation is your chance to answer any questions a lender might have about your loan application. Step 1: Get the payoff amount and instructions. This is an example of a payoff letter used in a syndicated loan transaction. This payoff letter (including the defined terms such as Lenders,. The City of San José processes requests for payoff demands of existing homebuyer and home repair loans, and affordability restrictions (i.e. A payoff letter shows the remaining balance on your mortgage, including fees, interest, etc. Learn more about what a payoff quote is and how to request one.