Chattel Mortgage Form With Balloon Excel In Salt Lake
Description
Form popularity
FAQ
Most mortgage lenders don't offer balloon mortgages. They're best for borrowers with unusual credit and financial circumstances.
After that initial period is over, though, the remaining balance is due in one lump sum. There are circumstances where a balloon mortgage is appealing, but they come with significant risk to both the borrower and the lender. Because of that, it can be difficult to find a lender willing to finance a balloon mortgage.
Risk of Foreclosure if Unable to Make Payments The most significant risk of a balloon mortgage is foreclosure if the borrower can't make the balloon payment at the end of the term. Foreclosure can result in the loss of the home, emotional distress, and impact the borrower's credit negatively, generally for seven years.
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).
A form of security interest, typically a legal mortgage, taken over tangible movable property (known as chattels).
Chattel is any tangible personal property that is movable. Examples of chattel are furniture, livestock, bedding, picture frames, and jewelry.
If there is a "balloon payment" (final balance), enter it into B4 as a positive value, and use the formula =PMT(B2, B3, -B1, B4). Those formulas also assume that payments are at the end of the period (i.e. end of month). That is typical. However, for car leases and such, the payment is at the beginning of the period.
