Chattel Mortgage Form With Balloon In Massachusetts
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
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FAQ
Most mortgage lenders don't offer balloon mortgages. They're best for borrowers with unusual credit and financial circumstances. Besides a balloon mortgage, there are other ways to get a lower monthly mortgage payment, including an adjustable-rate mortgage (ARM) or refinancing.
Such lump sum payment are called “balloon payments” in the industry and if secured with a Deed of Trust, California law imposes strict requirements on the lender who plans to receive a balloon payment on a California note and enforce lack of payment by foreclosure on the Deed of Trust.
The Bottom Line Chattel mortgages are a little-known but potentially good option if you're looking to finance a manufactured home or heavy equipment. These loans are smaller than conventional loans and tend to have higher rates, but they have shorter terms and quicker payoffs.
Balloon mortgages are short-term loans that begin with a series of fixed payments and end with a final, lump-sum payment. That one-time payment is called a balloon payment because it's often at least twice as much as the previous ones, leaving many borrowers with a final bill for tens of thousands of dollars (or more).
Potential Downsides of Balloon Mortgages for Homebuyers Foreclosure can result in the loss of the home, emotional distress, and impact the borrower's credit negatively, generally for seven years. The first balloon mortgage payments primarily cover the interest rather than the principal.
A balloon mortgage is usually rather short, with a term of 5 years to 7 years, but the payment is based on a term of 30 years. They often have a lower interest rate, and it can be easier to qualify for than a traditional 30-year-fixed mortgage.
The traditional mortgage is only for stationary property. It's suited for long-term real estate investments. Chattel loans are for property that can be easily moved. They're also an option for borrowers who want their loans approved faster and with shorter repayment times.
