Mortgage

What Is a Mortgage?

A mortgage is the legal document that secures a loan by placing a lien on real property. The borrower (mortgagor) signs the mortgage at closing, and it is recorded in the public records of the county where the property is located. The mortgage gives the lender (mortgagee) the right to foreclose on the property if the borrower fails to repay the loan according to the terms of the promissory note.

A mortgage is always paired with a promissory note. The note is the borrower's personal promise to repay the debt. The mortgage is the security instrument that ties that promise to the property.

Florida Mortgage Law

Florida is a lien theory state, which means the mortgage creates a lien on the property but does not transfer title to the lender. The borrower keeps full ownership and can sell, lease, or use the property during the life of the loan.

Key Florida mortgage provisions:

• Judicial foreclosure required — Under Chapter 702, Florida Statutes, a lender must file a lawsuit in circuit court to foreclose. Florida does not allow non-judicial "power of sale" foreclosure.
• Documentary stamp tax — Florida imposes a doc stamp tax of $0.35 per $100 on the mortgage amount. An intangible tax of $0.002 per $1.00 of new mortgage debt is also assessed at recording.
• Recording — The mortgage must be recorded with the county clerk under the Florida Recording Act to establish priority against subsequent claims.
• Satisfaction requirement — When the loan is paid in full, the lender must record a satisfaction of mortgage within 60 days under Section 701.04, Florida Statutes.

Types of Mortgages

• Fixed-rate mortgage — Interest rate stays the same for the entire loan term. Most common for residential purchases.
• Adjustable-rate mortgage (ARM) — Interest rate adjusts periodically based on a market index.
• Purchase money mortgage — Seller-financed mortgage where the seller extends credit directly to the buyer.
• Blanket mortgage — Single mortgage covering multiple properties.
• Reverse mortgage — Allows homeowners 62+ to convert home equity into cash without selling.

How Mortgages Appear at Closing

At a Florida closing, the borrower signs both the promissory note and the mortgage. The mortgage is recorded with the county clerk, and the lender's lien appears on every subsequent title search until a satisfaction is recorded. The Closing Disclosure itemizes all mortgage-related costs including doc stamps, intangible tax, recording fees, and lender's title insurance.

Related Terms

• Promissory Note — The personal promise to repay that accompanies the mortgage
• Foreclosure — The legal process to enforce a defaulted mortgage
• Lien Theory — Florida's framework where borrowers keep title
• Satisfaction of Mortgage — Recorded when the loan is paid in full
• Encumbrance — A mortgage is the most common encumbrance on property

Barnes Walker Mortgage Services

Barnes Walker Title handles mortgage document preparation, recording, and payoff coordination on every closing. The firm's attorneys review mortgage terms to ensure compliance with Florida law. Submit a title inquiry for assistance.

Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC