A lender must notify a borrower when a final/balloon payment is due:
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90 to 150 days prior to the due date.
90-150 days is too long for California balloon payment notice requirements. While some states may require longer notice periods, California specifically mandates the 30-90 day window to balance borrower protection with lender notification needs.
30 to 90 days prior to the due date.
four weeks prior to the due date.
Four weeks (approximately 28 days) is shorter than California's minimum requirement of 30 days. While this might seem adequate, it falls short of the legal minimum notice period required by state law.
six months prior to the due date. 202 Unlocking the DRE Salesperson and Broker Exam, Sixth Edition
Six months is significantly longer than California's requirement and would create unnecessary burden on lenders. Such extended notice periods are not standard practice for balloon payments in most states.
Why is this correct?
California law requires lenders to provide borrowers with 30-90 days advance notice before a balloon payment is due. This timeframe ensures borrowers have sufficient time to arrange refinancing or make other financial arrangements before the large payment becomes due.
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