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Home > Blog > Real Estate Transaction > Understanding Basic Documents In Your Real Estate Closing

Understanding Basic Documents In Your Real Estate Closing


When you sit for a real estate closing, and in the weeks beforehand, there will be a lot of terms thrown around. Some terms are so basic, they may never be explained to you. But that doesn’t mean you know what they mean.

Three terms that you will often hear in relation to your real estate closing are your mortgage, your note, and your deed.

Although sometimes these terms are used interchangeably, or even lumped together as one (usually called “the mortgage”), they actually are different terms that refer to different documents that do different things.

The Note

The note, sometimes called a promissory note, is your loan document; it is the document that says what you borrowed, when you will pay the money back, what the interest rate will be, and other information that is directly related to the repayment terms on the loan.

Most residential loans are 30 year notes, but some commercial or nontraditional residential loans may be shorter. Most loans allow for installment payments, which usually entails a payment every 30 days.

The Mortgage and Foreclosure

Of course, if you don’t pay the loan, you can be sued for the difference. But the bank or lender cannot foreclose your home, just based on the note. To foreclose on your property for nonpayment of the loan requires you to sign or agree to the mortgage.

Although people often refer to the note and mortgage together as “the mortgage,” the mortgage really is just your agreement that you will put the property up as collateral, subject to foreclosure, if the terms of the note are not complied with. The mortgage itself is not an obligation to pay the loan back.

The mortgage may have other requirements, such as the requirement to maintain proper insurance on the property, or the requirement that the property be used as residential, and not commercial property.

It may also detail the procedures in foreclosure, such as the requirement that you be notified of a foreclosure. The mortgage must be filed in the public records.

The Deed or Title

The deed, sometimes called the property title, is the document that says that you own the property.

Unlike some other states, in Florida, even if there is a mortgage on the property, you still own the property, and thus, the deed will be in your name, even while you still owe money to the bank. Like the mortgage, the deed is also included in the public records.

All people named on the deed as owners must also be on the mortgage. Note that while you can legally transfer title to the property by executing and filing new deeds, doing so without paying off your loan first can be a violation of your mortgage or the note.

Let us explain the closing process to you and help you in the sale or purchase of property. Contact the Tampa real estate lawyers at the Gilbert Garcia Group, P.A. today.




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