Balloon mortgages; scope of law; definition; requirements as to contents; penalties for violations; exemptions.
F.S. 697.05
in effect(1)
Any conveyance, obligation conditioned or defeasible, bill of sale, or other instrument of writing conveying or selling real property for the purpose or with the intention of securing the payment of money, whether such instrument is from the debtor to the creditor or from the debtor to some third person in trust for the creditor, shall be deemed and held to be a mortgage and shall be subject to the provisions of this section.
(2)(a)1.
Every mortgage in which the final payment or the principal balance due and payable upon maturity is greater than twice the amount of the regular monthly or periodic payment of the mortgage shall be deemed a balloon mortgage; and, except as provided in subparagraph 2., there shall be printed or clearly stamped on such mortgage a legend in substantially the following form:
THIS IS A BALLOON MORTGAGE AND THE FINAL PRINCIPAL PAYMENT OR THE PRINCIPAL BALANCE DUE UPON MATURITY IS $
, TOGETHER WITH ACCRUED INTEREST, IF ANY, AND ALL ADVANCEMENTS MADE BY THE MORTGAGEE UNDER THE TERMS OF THIS MORTGAGE.
2.
In the case of any balloon mortgage securing the payment of an obligation the rate of interest on which is variable or is to be adjusted or renegotiated periodically, where the principal balance due on maturity cannot be calculated with any certainty:
a.
The principal balance due upon maturity shall be calculated on the assumption that the initial rate of interest will apply for the entire term of the mortgage;
b.
The legend shall disclose that the stated principal balance due upon maturity is an approximate amount based on such assumption; and
c.
A legend in substantially the following form suffices to comply with the requirements of this section:
THIS IS A BALLOON MORTGAGE SECURING A VARIABLE (adjustable; renegotiable) RATE OBLIGATION. ASSUMING THAT THE INITIAL RATE OF INTEREST WERE TO APPLY FOR THE ENTIRE TERM OF THE MORTGAGE, THE FINAL PRINCIPAL PAYMENT OR THE PRINCIPAL BALANCE DUE UPON MATURITY WOULD BE APPROXIMATELY $
, TOGETHER WITH ACCRUED INTEREST, IF ANY, AND ALL ADVANCEMENTS MADE BY THE MORTGAGEE UNDER THE TERMS OF THIS MORTGAGE. THE ACTUAL BALANCE DUE UPON MATURITY MAY VARY DEPENDING ON CHANGES IN THE RATE OF INTEREST.
(b)
This legend, including the principal balance due upon maturity, shall appear at the top of the first page or face sheet of the mortgage and also shall appear immediately above the place for signature of the mortgagor. The legend shall be conspicuously printed or stamped.
(3)
Failure of a mortgagee or creditor or a third party in trust for a mortgagee or creditor to comply with the provisions of this section shall automatically extend the maturity date of such mortgage in the following manner: The mortgagor shall continue to make monthly or periodic payments until the principal and interest which has accrued prior to the time of the balloon payment of the mortgage is paid in full, and the maturity date shall be automatically extended to the date upon which said payments would cause the mortgage debt to be paid in full assuming such payments are made when due upon such monthly or periodic schedule. The mortgagor shall be entitled to prepay the mortgage without penalty during the extension period.
(4)
This section does not apply to the following:
(a)
Any mortgage in effect prior to January 1, 1960;
(b)
Any first mortgage, excluding a mortgage in favor of a home improvement contractor defined in s. 520.61(13) the execution of which is required solely by the terms of a home improvement contract which is governed by the provisions of ss. 520.60-520.98;
(c)
Any mortgage created for a term of 5 years or more, excluding a mortgage in favor of a home improvement contractor defined in s. 520.61(13) the execution of which is required solely by the terms of a home improvement contract which is governed by the provisions of ss. 520.60-520.98;
(d)
Any mortgage, the periodic payments on which are to consist of interest payments only, with the entire original principal sum to be payable upon maturity;
(e)
Any mortgage securing an extension of credit in excess of $500,000;
(f)
Any mortgage granted in a transaction covered by the federal Truth in Lending Act, 15 U.S.C. ss. 1601 et seq., in which each mortgagor thereunder is furnished a Truth in Lending Disclosure Statement that satisfies the requirements of the federal Truth in Lending Act; or
(g)
Any mortgage granted by a purchaser to a seller pursuant to a written agreement to buy and sell real property which provides that the final payment of said mortgage debt will exceed the periodic payments thereon.
Source: FL Statutes (Official Site)URL: https://www.flsenate.gov/Laws/Statutes/2025/Chapter697/AllFetched: 7/8/2026