In a Closing Disclosure, how is the payoff of the existing loan classified?

In a Closing Disclosure, the payoff of the existing loan is classified as a debit to the seller because it represents an obligation that the seller must fulfill to clear any outstanding debt on the property. When the seller sells their home, the proceeds from the sale are used to pay off any existing mortgages or liens. This payoff is categorized as a debit on the seller's side of the transaction since it reduces the amount of money they will receive from the sale. By paying off the existing loan, the seller ensures a clear transfer of ownership to the buyer, who will then take title to the property without any encumbering debts.