A mortgage lender might ask you to write a letter of explanation to better understand your finances when deciding whether to approve you for a loan. Creating a payoff letter is essential to any loan or mortgage repayment process.Our free templates and this guide can help you get started. We'll also provide a letter of explanation sample template you can use to draft your own letter if or when the time comes to write one. 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.