Chase Mortgage Loan Review 2022 – Low Cost Advisor
Chase offers a wide range of home loan products and at annual percentage rates (APRs) that tend to be lower than the market average. As of early January 2022, the annual percentage rate (APR) on their loans ranged between 2.6% and 3.4% depending on the area, type of mortgage loan and market rate trends.
Chase also has a ‘Closing Guarantee,’ promising an on-time closing in three weeks—after submitting all the required documents—or you’ll get $2,500. The Guarantee does not apply if you are refinancing. This offer is only available for new, residential first-lien loan applications submitted directly to Chase.
Both their purchase loans and refinancing rates are updated daily, helping you to calculate your likely monthly payments.
Home Purchase Loan Options
- Chase DreaMaker mortgage. It has down payment options as low as 3% and lower monthly payments with a 30-year fixed rate. However, you will have to meet income requirements to qualify for this loan.
It is only available if you are buying or want to do a no cash-out refinance of a primary home (1-4 units) for a 30-year fixed-rate term. Income limits and homebuyer education apply to a DreaMaker mortgage.
- FHA loan. A government-insured mortgage that offers down payments as low as 3.5%. Federal Housing Administration (FHA) loans come with a 15-, 20-, 25- or 30-year term and have a fixed interest rate.While there are no specific income requirements to qualify, you will have to pay monthly mortgage insurance for the duration of the loan and a mortgage insurance premium at closing.
- VA loan. You must be a veteran, active duty service member, or a member of the National Guard or Reserve to qualify. A VA loan has low or zero payment options and no monthly mortgage insurance requirement. VA loans are available with 10-, 15-, 20-, 25- or 30-year terms.A Certificate of Eligibility from the VA is required to document eligibility. Restrictions and limitations apply.
- Standard Agency Mortgage. It comes with a minimum 3% down payment and is a good option if you have a higher credit score and may not need a low down payment. Standard Agency mortgages require that you are a first-time homebuyer to be eligible for a loan-to-value (LTV) ratio that is greater than 95%. Homebuyer education requirements may apply.
- Jumbo loan. Chase provides loans above FHFA limits up to $3 million. Investment properties are eligible for up to $1 million loan amounts. Loans up to 80% of a home’s value are available on a purchase or refinance with no cash back, subject to the property type, a required minimum credit score and a minimum amount of monthly reserves.
This means you must have enough savings to cover a specified number of monthly mortgage payments—including the principal, interest, taxes, insurance and assessments—after the loan closes. Geographic restrictions apply.
Its Relationship Pricing Program provides jumbo loan borrowers customers with $500 off the processing fee. You must have combined assets in Chase deposit and investment accounts totaling $150,000 to $499,999. You can also get up to $1,150 off your processing fee with combined assets totaling at least $500,000.
Jumbo loan borrowers with a minimum of $500,000 in eligible Chase and JPMorgan deposit accounts and/or wealth management accounts get a 0.125% discount off the standard interest rate. Participating customers with more than $1 million can get a 0.25% discount.
Chase also offers a $2,500 or $5,000 grant for DreaMaker, Standard Agency, FHA and VA loans if you are buying a home in 6,700 minority neighborhoods nationwide. You might also be eligible for an additional $500 by completing a certified education course and getting a DreaMaker mortgage loan.
The grant can be applied towards discount points, closing costs or lowering your down payment (dependent on loan product’s requirements). The $500 will be applied at your closing first to points on the loan, if any, then to Chase fees and then non-Chase fees.
3 Refinancing Paths
Chase has three paths for customers interested in refinancing their mortgage loan:
- Pay loan off sooner. For example, refinancing from a 30-year mortgage to a 15-year mortgage. With this option, your payments will likely increase, but you’ll own your home outright sooner and save on interest payments in the long run.
- Lower monthly payments. Spreading your loan out over a longer period can reduce your monthly payment, although with more interest paid over the lifespan of your loan.
- Take out equity. If you have owned your home for a while and built up sizable equity, you can withdraw some (or all) of that to fund major expenditures.
Refinancing Loan Options
- Cash-out refinance. Chase’s cash-out refinance option lets you pay off your current mortgage and create a new one, while also allowing you to keep part of your home’s equity as cash to pay for home improvements or other significant expenses.
A fixed-rate refi offers a consistent interest rate for as long as you have the loan, instead of a rate that adjusts or floats with the market. This means your mortgage payment will be consistent, but the fixed-rate loan will have a higher interest rate.
An ARM offers a lower interest rate for a set period of time, which equals a lower monthly payment. An ARM refi has an interest rate that stays the same for a set period of time, then changes to a variable rate that adjusts periodically. For example, Chase offers a 7/6 ARM with an introductory interest rate for the first seven years and then resets every six months after that for the life of the loan.
- Alternative loan. In addition to FHA and VA loan options should you want to refinance, Chase also offers 15- and 20-year mortgage products. If you want to pay off your mortgage faster, then you may want to consider refinancing for a shorter term. However, because you’ll be paying off your loan over a shorter period of time, your monthly payments will likely be higher.