Escrow will handle paying your mortgage and any other recorded liens at closing. For this reason, there’s no need for you to settle these accounts on your own.
The escrow officer collects the payoff amounts directly from your lender or creditors. From here, the amounts are subtracted from the sale proceeds.
What remains is your net proceeds, which you receive on the closing date. The escrow structure protects you by ensuring that debts tied to the property are cleared properly and that the home transfers free of those obligations.
