Mortgages & Financing

Florida is a lien-theory state

A Florida mortgage is "a specific lien on the property therein described, and not a conveyance of the legal title or of the right of possession" (§ 697.02, Fla. Stat.). The borrower keeps title; the lender holds a lien.

Note vs. mortgage

• The promissory note is the borrower's personal promise to repay (evidence of the debt).
• The mortgage is the security instrument that pledges the property for that debt and is recorded in the county's official records.
• The borrower is the mortgagor; the lender is the mortgagee.

Foreclosure is judicial

All mortgages in Florida must be foreclosed in equity, through the courts, and a foreclosure claim is tried to the court without a jury (§ 702.01, Fla. Stat.).

Taxes on a Florida loan

• Documentary stamp tax of 35¢ per $100 (or fraction) on notes and on mortgages filed or recorded in Florida (§ 201.08, Fla. Stat.).
• Nonrecurring intangible tax of 2 mills (0.2%) on obligations secured by Florida real property (§ 199.133, Fla. Stat.).

Example: a $300,000 loan → note/mortgage stamps 3,000 × $0.35 = $1,050; intangible tax $300,000 × 0.002 = $600. Try the calculator.

Common clauses and loan types

• Acceleration clause: lets the lender declare the whole balance due on default.
• Due-on-sale (alienation) clause: lets the lender call the loan if the property is transferred.
• Prepayment terms and penalties.
• Loan types: conventional (conforming and non-conforming), FHA-insured, VA-guaranteed, USDA; fixed-rate, adjustable-rate, balloon, interest-only, purchase-money, wraparound, package, blanket, construction and reverse mortgages.

Loan math reminders

• Loan-to-value (LTV) = loan ÷ the lesser of price or appraised value.
• One discount point = 1% of the loan amount.
• Annual interest = principal × rate. Monthly interest = annual interest ÷ 12.