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 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. Preapproval letters state how much a lender is willing loan to a borrower. 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. Here, you can fill out the home location, annual property taxes, annual homeowners insurance and monthly HOA or condo fees, if applicable. Keep good records of your debts, so that when you reach the credit card company, you can explain your situation. Santa Clara Adult Education.