Does a tax deed wipe out a mortgage in Florida? Or for that matter, any state. The answer is, yes, a tax deed extinguishes a mortgage, and I’ll explain why. Today we’re going to talk about tax deeds, mortgages and what gets wiped out.
Why should you listen to me? Well, my name is Ted Thomas, and over 30-years ago, I started out buying tax lien certificates then transitioned into buying tax deeds. I still invest in them to this day.
I began making little CDs, audios and videos, until I ultimately started teaching classes, taking people to auctions and coaching. So, listen closely, and you’ll become a mini expert.
Table of Contents:
- What Is a Mortgage?
- The Property Tax Lien
- Do Property Tax Liens Take Priority Over Mortgages?
- Tax Liens and Tax Deeds in Florida
- Investing in Delinquent Property Taxes for Big Profits
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What Is a Mortgage?
Before I answer the question, “Does a tax deed wipe out a mortgage in Florida?” first let me explain a mortgage in its simplest terms. You want money so you go to a bank and ask for money, or you go to anybody you want and ask for money.
The person that’s going to lend you the money wants collateral. So, all you do is you sign an IOU.
Every time you think of a mortgage, think of an IOU. You owe the person that lent you. That’s all that is, and it’s the same thing with a deed of trust or a security deed, just an IOU.
The Property Tax Lien
The local government controls all property and makes the property taxable. They filed a lien on that property the day they put it on a map, drew a line on the ground and said, “This is a property. It’s number 444.” That’s the tax number.
In the old days they called that a “wealth tax,” and property tax is still a wealth tax. Also, if you don’t pay it, they’re going to do something about it.
When you’re in default, the government has the power to confiscate your property.
If you’re saying, “I don’t have to worry about that. There’s a big mortgage on it.” Well, at the same time they’re sending you a notice, they’re also notifying the bank and anyone else that’s on title that the local government is going to seize the property.
Do Property Tax Liens Take Priority Over Mortgages?
What lien takes priority? Lien priority depends on when the lien was filed, first come first served. Well, the very first lien ever put on the property was the tax lien; it’s the senior lien.
So they’re going to confiscate the property, and anybody that’s on title is going to be wiped out. They have told the bank, so the bank could do something about it, but the bank won’t always pay the property tax.
Does a tax deed wipe out a mortgage in Florida? Yes. If the bank doesn’t pay, that property is going to go to a tax auction.
So what happens after a tax deed sale in Florida? The local county is going to wipe out that mortgage and any other junior lien that’s on that property.
What liens survive a tax deed sale in Florida? A few government liens may be an exception, but that’s it. It’s state law; I didn’t make it up.
Now, why do they do that? Because they want to bring the property back onto the tax roll, and they want to sell it for the lowest price possible. That’s why they wipe out mortgages in Florida and any other state.
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Tax Liens and Tax Deeds in Florida
How does a tax deed sale work in Florida? I’ve taught thousands of people like you how to purchase tax defaulted property.
You can do this online, and you can start small. Start with 50 bucks if you want. There are going to be tax liens and tax deeds at very low prices, and there will be thousands of them.
For example, let’s say you went to Cook County, Chicago, I’ve seen them have 100,000 tax lien certificates. Also, Miami-Dade will have tax lien certificates on a regular basis.
How do tax deeds work in Florida? Some properties will sell at a tax deed auction for 10 and 20 cents on the dollar. Why? Because the county will confiscate and resell those properties for close to the amount of the unpaid property taxes.
Investing in Delinquent Property Taxes for Big Profits
This is an alternative investment, and once you learn how to do it, you can do it for the rest of your life. After buying a tax deed property, you should be able to make $25,000, $50,000 or even $100,000 and keep doing this per deal.
I teach people to “buy it low, sell it low, and do it fast.” I’m the only guy that teaches that. Everybody else says, “buy it low and sell it high.” Well, try that out and see how it works with properties that don’t look too pretty. I’ve been doing this for a long time, and you can do it too.
We hope you enjoyed Ted’s lesson, “Does a Tax Deed Wipe Out a Mortgage in Florida?”
A tax lien is the first lien on the property, and the mortgage is a junior lien. Does a tax deed wipe out a mortgage in Florida? Yes, it does, and that’s the case in other states as well.
At a tax sale, not only can you purchase real estate for 10, 20 or 30 cents on the dollar, but you also get the property without a mortgage.
If you’d like to know more about alternative real estate investing, Ted Thomas provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops, web classes, and personal coaching with certified coaches.
You can learn how to reap the huge rewards from tax lien and tax defaulted property investing! Get started today by taking advantage of this Free Gift from Ted. Act now, it costs you nothing and will give you a big head start!
Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.