Real Estate

Borrowing Money Secured by Real Estate

When borrowing money to acquire or refinance real property in Florida, the lender will prepare an entire loan package for you to sign at closing. The two main documents in the loan package are the promissory note and the mortgage. The promissory note creates the primary contractual obligation for you to repay the loan to the lender. Generally, the note will include things like the amount that you are borrowing, the term of the note, the interest rate being charged and the amount of your payments. You will want to look carefully at other provisions of the note that could impact repayment, such as late charges, default interest rate and prepayment provisions.

The mortgage secures repayment of the promissory note. It will be recorded in the public records of the county where your real property is located. The mortgage will typically have representations and warranties that you make to the lender regarding you and your ownership of the property. Additionally, the mortgage will have covenants with which you will be required to comply as long as your loan is outstanding. Typical mortgage covenants include things like maintaining the property, keeping the property insured and paying the real estate taxes. According to Florida law, a mortgage only grants a consensual lien on the real property in favor of your lender and is not deemed to be a conveyance of the legal title or the right of possession; however, the mortgage will also contain default provisions and what the lender’s remedies are in the event of a default. A typical remedy is judicial foreclosure of the lien, which could result in the lender ultimately owning your property if you do not repay the loan.

Promissory notes and mortgages are subject to documentary stamp taxes in Florida. These documents are taxed at a rate of 35 cents per $100, or any fraction thereof, of the amount of the indebtedness indicated in the document. Mortgages are typically also subject to a nonrecurring intangible tax imposed at the rate of 2 mills (.002) on each dollar secured by the mortgage. Note that some mortgages, such as those in favor of a credit union, are exempt from the intangible tax.

One of our experienced attorneys can help you with your loan questions, as well as closing your real estate transactions.

Mike Workman

Michael Workman first knew he wanted to become both an attorney and CPA during his junior year at Winter Haven High School when he took classes in accounting and business law.Michael accomplished this goal through his studies at Stetson University and the University of Florida College of Law, ultimately being admitted to The Florida Bar in the fall of 1997 and becoming licensed as a CPA by The State of Florida in the spring of 1998.With a background in both law and accounting, Michael planned for his practice to include probate and estate planning, corporate and entity work, and some real estate work.True to plan, that’s exactly how Michael’s career progressed during his first three years of practice with his time being almost evenly divided among those three areas.However, Michael had the opportunity to join Clark Campbell in 2001, and the needs of the firm’s clients coupled with his strong background in title insurance lead to Michael concentrating his practice in the area of real estate law and ultimately becoming Board Certified by The Florida Bar as a specialist in the area of real estate law in 2005.

Michael has been married to his wife Dena since 2003, and they are both very active in the lives of their fraternal twins, John and Sarah.Additionally, Michael has recently participated in several team-building endurance events sponsored by a company called GORUCK.These events are billed as a slice of Special Operations training for civilians where leadership is taught and teamwork is demanded.Michael has learned more about teamwork and bonded more closely with his teammates during these events than would have ever been possible in “normal” everyday life.The saying “one team, one fight” is often heard and repeated during GORUCK events, and Michael seeks to exemplify that same spirit of teamwork in his practice of law.
Mike Workman

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