Chase Mortgage Review: One Of The Leading Mortgage Lenders In The US
JPMorgan Chase & Co is one of the leading global financial services firms in the world. The firm’s home loan division, Chase Home Lending, is an online mortgage lender that originates loans from all over the US. Today, it’s known as one of the leading mortgage lenders in the country, tying for second place on JD Power’s U.S. Primary Mortgage Origination Satisfaction Study.
But what makes a Chase mortgage so special? And what type of homebuyer could benefit the most from them? In this Chase mortgage review, we detail everything you should know before buying a new home and loaning from the famous institution.
What To Look For In A Mortgage Lender
Before we take a deep dive into our Chase review, let us introduce the five factors we considered in this assessment. This can also serve as a first-time buyers’ guide on what to look for in a lender:
Arguably the most important factor to consider when looking for a mortgage is the types of home loans offered by a lender. These are the most common home loan types:
This is essentially any home loan that is backed by a private lender. There are two types of conventional mortgages: conforming loans and non-conforming loans. The former describes home loans that fall within the maximum borrowing limits, while the latter exceed the limits and are called jumbo loans.
When it comes to down payment requirements, the rule of thumb is to put down at least 20 percent of the principal amount. However, some companies allow borrowers to pay as little as 3 percent down for certain mortgage products. In most cases though, lenders require homebuyers to secure private mortgage insurance if they wish to pay a lower down.
As mentioned, a jumbo loan is a loan exceeding the maximum borrowing limit. For 2021, the limit is $548,250 across the US – save for Hawaii, Alaska, and other high-cost markets where the limit is $822,375.
Because non-conforming amounts are bigger, and thus put lenders at more risks, most companies require at least 10 percent down and a credit score of 700 or higher.
A fixed-rate mortgage is a home loan wherein the interest rate remains fixed till the term’s end. With this type of loan, you know exactly how much you have to pay month to month.
However, most fixed-rate mortgages come with longer terms and higher interest rates. This means that, despite the predictability of your loan, you may end up paying a bigger monthly payment for a longer amount of time.
Adjustable-rate mortgages are loans in which the interest remains fixed (and relatively low) for a certain number of years (the initial fixed period), then fluctuates yearly depending on market changes.
Most people get an ARM because they want to pay a lower interest rate in the first few years of their mortgage. This allows them to pay a lower monthly payment and save up some extra cash for anywhere between three to 10 years.
There are three types of loans issued by the US government – FHA, VA, and USDA loans:
FHA Loans - Offered by the Federal Housing Administration, this type of loan is perfect for a first-time or low-income borrower with a less-than-impressive credit score. To qualify for an FHA loan, you only need a 580 credit rating and a minimum of 3.5 percent down payment.
VA Loans - Active duty members and veterans of the US Army, along with their families, are entitled to low-interest, zero-down loan options via the Department of Veterans Affairs' loan program.
USDA Loans - For folks buying in rural, USDA-eligible areas, the USDA offers zero-down, low-interest home loans. This type of loan is best for low-income borrowers.
It's also a good idea to consider lenders that can offer refinancing and home equity lines of credit.
Affordability: Mortgage Rates And Fees, Requirements, Etc.
Purchasing a house in these times can be a huge risk, so we encourage homebuyers to look for companies that can offer low mortgage rates, low down payments, and minimum additional fees (e.g. application fees, closing costs, origination fees, etc.) Also, be on the lookout for companies that have low credit score and debt-to-income ratio requirements.
Credit scores range from 300 to 850, but most lenders will require a score of around 620 or higher for conventional loans and 700 for non-conforming loans. Your credit score is a reflection of your creditworthiness and ability to pay bills and debts on time – this is why lenders prefer those with better credit.
The debt-to-income ratio, on the other hand, indicates how much money you owe relative to your income. The ideal ratio is 40 percent or less, but you can likely get away with 50 with some lenders.
The Mortgage Application Process
Applying for a home loan can feel intimidating. There is a lot of jargon to absorb and lots of different rates to look at – but it doesn’t have to be so complicated! Some lenders make the process as quick and painless as possible through online resources or phone/digital applications.
Another thing to consider is whether a company posts mortgage rates on its website. This can help make it easier to compare rates and even calculate your approximate expenses.
Customer Service And Satisfaction
You want to make sure your prospective lender is easy to reach, responsive, and capable of resolving issues right away. To do this, we look at three things: available hotlines and online portals, JD Power rankings, and Better Business Bureau ratings.
JD Power is a third-party marketing firm that specializes in consumer insights and data analytics. We refer to its U.S. Primary Mortgage Origination Satisfaction Study in particular, as it measures mortgage lenders’ “overall customer satisfaction based on performance in the application/approval process; communication; loan closing; and loan offerings.” The best lenders will rank in the top 15 of their overall customer satisfaction index ranking.
The BBB, on the other hand, is an agency that assesses businesses’ complaint histories, advertising issues, licensing and government actions, and transparency in business practices (among other things) in order to rate their overall trustworthiness. It rates companies from A+ to F.
Finally, it’s essential to look into a lender’s availability. This means figuring out whether your prospective lender originates mortgages where you’re from (or where you’re planning to buy a house). Ideally, you should find a lender that is available in all 50 states.
Chase Mortgage Review
Chase Bank is a subsidiary of global financial firm JP Morgan Chase & Co., one of the biggest names in finance worldwide. Chase has over 4,000 branches in the US and offers a wide range of financial services, including checking accounts, savings accounts, credit cards, CDs, auto loans, home equity lines of credit, and, of course, mortgages. As mentioned, Chase Home Lending is the bank's online mortgage division.
Chase's Mortgage Types
Chase Home Lending offers the following loan types:
Chase offers fixed-rate loans with 10-, 15-, 20-, 25-, and 30-year term options and adjustable-rate loans with 5/1, 7/1, and 10/1 terms. The requirements for its conforming loans are a down payment of five to 20 percent of the purchase price, plus a “good income and credit score”.
Chase’s DreaMaker loan is a good choice for first-time homebuyers or those with a limited income. With this option, you can get competitive interest rates and pay as low as three percent down payment. You can also choose to pay your down with an eligible gift fund or grant. Do keep in mind that there are strict income and lending limits for this program.
Through this, you can earn a $2,500 Chase Homebuyer Grant, which you can apply towards your closing costs or use to lower your interest rate. And if you complete a homebuyer’s education course, you get an additional $500.
If you want to make a bigger purchase, Chase Home Lending offers non-conforming loans up to $3 million, available at fixed and adjustable rates. This type of loan requires a 20 percent or higher down payment.
Chase offers two government-issued mortgage options: VA and FHA loans. For the former, you can pay as little as 3.5 percent down for either 15-, 20-, 25-, or 30-year fixed term options. FHA loan borrowers will have to maintain monthly mortgage insurance and pay a mortgage insurance premium at closing.
Its VA loan options, on the other hand, come with zero down payment requirements and are available to active service members and veterans. Chase VA loans are offered in 10-, 15-, 20-, 25-, and 30-year fixed and adjustable term options.
Aside from the aforementioned mortgage loan products, Chase also offers refinancing and home equity lines of credit. Chase does not offer USDA and home equity loans.
When it comes to affordability, Chase is pretty average. Its minimum required credit score is 620 for conventional loans, 640 for FHA and VA loans, and 680 for jumbo loans. As mentioned earlier, you can put as little as 3 percent down for some loans.
Aside from origination and underwriting fees, you will have to pay for a rate lock if you want to lock in your interest before closing. You can lock in your mortgage rate five days before closing.
Unfortunately, Chase doesn’t impress when it comes to the application process. While you can start applying for a mortgage through its website, you can’t complete your application online. You will have to speak to a Chase advisor by phone or visit a branch personally to finish your application.
On the upside, Chase lets you view mortgage rates and fees online. For an idea of what Chase mortgage rates are like in your area, enter your zip code in the Purchase Rates section.
Customer Service And Satisfaction
One of Chase’s biggest draws is its excellent JD Power ranking. Currently, the bank is tied with Bank of America for second place on JD Power’s Overall Customer Satisfaction Index. They’ve also got an impressive A+ rating from the BBB.
You can contact Chase for help with your account through its 24/7 customer service hotline – 1-800-935-9935. You can also reach a representative from 8 am to 8 pm Mondays through Fridays and 9 am to 6 pm on Saturdays.
Chase also has a web portal that customers can use to track their loans and even make monthly payments. You can schedule a one-time mortgage payment through chase.com or its mobile app.
You can get a Chase mortgage in all 50 states in the US. However, brick-and-mortar locations and loan advisors are not available in certain areas, so you may have a hard time closing a deal if you’re buying in one of those places. Contact Chase for more details.
Chase Mortgages: Pros And Cons
Chase offers a wide selection of mortgage products.
Chase’s DreaMaker mortgage program is an excellent choice for low-income families with limited capacity to cover their down payment.
Chase allows applicants to submit their documents, track their application’s status, and make a monthly payment online.
Chase boasts excellent customer satisfaction ratings and ranks second on JD Power’s 2020 survey. It is tied with Bank of America and preceded by Rocket Mortgage by Quicken Loans.
Chase also offers refinancing and home equity lines of credit.
Chase doesn’t let homebuyers complete their mortgage applications online. To secure a loan, you would still need to talk to a loan officer on the phone or visit your nearest Chase branch.
You need to pay a fee to lock in interest rates for a Chase mortgage.
Brick-and-mortar locations and loan advisors are not available in certain places, making it more difficult to complete an application.
Chase does not offer USDA and home equity loans.
The Bottom Line
So is getting a mortgage with Chase worth it? Chase may not be the best mortgage lender overall, but with a variety of mortgage loan products, low-cost options for first-time buyers, and excellent customer satisfaction ratings, there is little room for doubt that Chase can deliver on its promises.
Haven’t found what you’re looking for? Don't feel like Chase is the best mortgage lender for you? Visit the Wesley Mortgage, LLC website for more lender reviews, practical tips, and resources on other personal finance matters.