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Tuesday, January 21, 2014

Florida's Mortgage Components

The components that make up a Florida Mortgage

I was surprised to find out most people, who are home owners or my students, do not know what their mortgage consists of! Biggest financial transaction of your life and you can’t recall the interest rate that you are paying? As the sports analysts say – "C'Mon Man!"

One of the questions I ask my Real Estate Mentoring Students or Clients, what are the three parts of a Florida Mortgage? Most say the mortgage and stop with blank stare? So today I am going to discuss the three parts that make up your Mortgage in Florida. They Are:

  1. Note
  2. Mortgage
  3. Deed

That is why you have so many papers to sign at closing!

Note or Promissory Note

A note or Promissory Note can be drawn up using a template you bought in Office Depot! It is real simple! A note is contract or document signed by the people who agree to pay the debt. It doesn't have to be you! It is anyone willing to pay back, usually with interest and terms, a debt that has been incurred.

In real estate, it is typically a borrower or buyer agreeing to make monthly payments of principal and interest over 15 - 30 years to a lender, usually a bank but it could be an individual. (Good Cash Flow Strategy!) If the borrower doesn’t pay, the LENDER can sue "under the note" for breaking the contract. Usually in Real Estate, the property serves as collateral if there is a breach of contract.


A mortgage is document that transfers interest in property. While a mortgage is tied to the debt created by the note, it is not a promise to pay the debt. It contains language which gives the lender the right to take back the property if the borrower/buyer goes into default and doesn’t pay under the terms of the note signed. In other words, what will happen if you breech the Promissory Note.


A deed is the document that passes the TITLE from the grantor (Seller/Owner) to the grantee (Buyer/Future Owner). There are two basic types of deeds.

  • Quitclaim Deed - passes whatever title or rights the grantor (Seller/Owner) has in the property to the grantee (Buyer/Future Owner) without any warranty.
  • Warranty Deed - contains promises made by the grantor (Seller/Owner) about the title or rights conveyed. In other words, he is warranting a "Clear and Marketable Title."

A deed must contain legal description of the property and must be signed in front of a notary public in the State of Florida.

A title is the bundle of legal rights the owner has in real property or asset. In other words, the title is the ownership of the property.

P.S. Make sure you sign all documents in Blue Ink and the mortgage is recorded at the Clerk of Court office.

Written by +Bob Burns.

Related Links, Postings, Presentations or Articles:

Bob Burns at MREIA meeting"The only thing more expensive than education is ignorance" - +Benjamin Franklin!
Bob Burns Print Signature Photo
+Real Estate Investor
Telephone #: 305-586-5280

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