There’s still a mortgage on my home — how does it get paid off at closing?

Selling with an existing mortgage is routine. As part of closing, the escrow officer requests an official payoff statement from your lender showing the exact balance, including interest through the closing date. At closing, that amount is paid directly to the lender out of the sale proceeds before any remaining money comes to you — so you never have to pay the loan off separately or in advance. Once the lender is paid, it releases its lien on the property, clearing the way for the buyer to receive clear title. The same approach covers home equity lines and other recorded debts.