Please see more information in the Payoff Demand Instructions. 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. 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. I would like to request to your good office to stop sending and calling us to collect payments. 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.