A Closer Look at Florida Cash Out Mortgage Laws

Many homeowners struggle with how Florida home equity loans work and the restrictions the state places on such a loan. The good news is you are not alone if you do not understand the process. The bottom line is Florida allows you to borrow money against any equity you have in your home.

However, the state does have some restrictions you should understand before you proceed. Here is a look at some of the most important restrictions.

Can I take cash out of my home anytime I want?

Florida law allows you to take cash out once per year, and you must keep a minimum of 20 percent equity in your home.

Does the law only address my primary residence?

The home equity cash out laws in Florida only apply to primary residences. Investment properties and second homes do not fall under Florida’s constitution for home equity loans. However, some lenders will apply their own set of guidelines for home equity loans on second homes or investment properties.

Can I refinance my mortgage after I have taken out a home equity loan?

Under Florida law, you can refinance your mortgage after you have taken out a home equity loan. However, the law stipulates that you must wait 12 months from the date of your cash out loan, and you must use the same cash out product.

If I took out a home equity loan in the past, can I qualify for a home equity line of credit (HELOC)?
Florida law only allows for one home equity loan on your house at a time. Therefore, you cannot have both a home equity loan and a HELOC on your house at the same time. You can refinance the original home equity loan into a new loan with a lower interest rate.

How long does it take to qualify for a home equity loan in Florida?

It takes approximately 30-45 days to complete the entire mortgage loan process. Florida also requires that you sign what is known as the “12-day letter.” This letter states that you must wait at least 12 days from the date of the application before you proceed with your home equity loan. The waiting period is a chance for you to learn more about home equity loans and cash-out refinances.

Where do I need to go to close a cash out loan in Florida?

You will sign all final documents and close your loan at either the lender’s office or the title company. Florida does not allow you to use mobile services to close home equity loans.

Come see one of our mortgage professionals today to discuss your cash out mortgage loan options.