What is a Payoff Agreement? A payoff agreement is an informal contract in which a creditor agrees to accept the balance of a debt owed as full payment.You can choose to pay just the interest payments for up to six months. This would reduce your monthly payments but increase the overall cost of the mortgage. Suffolk Credit Union in NY helps members unlock their financial potential with their personal banking rates. Learn about our balance-boosting dividends. Decide who should be the borrower: In the current credit climate a credit-worthy co-signer is almost always required for an application to be approved. Just like a mortgage application, a loan modification application can take hours to complete. The template used in this electronic filing system is similar, but not identical to the current paper form. For example, where an intrafamily loan is used to purchase real estate, clients should consider placing a mortgage on the property.