What is a 'payoff statement' (also called a 'demand statement') in an Illinois mortgage transaction?

Explanation

A payoff statement (demand statement) is obtained from the existing lender before closing and shows the exact amount needed to fully pay off the mortgage as of a specific date, including outstanding principal, accrued interest, prepayment penalties (if any), and any other fees. The closing agent uses this figure to ensure the mortgage is completely paid off at closing so the property transfers free and clear of that lien.