CHASE WANTS TO SHARE THIS KEY LESSON TO HELP YOU DISCOVER, ESTABLISH AND PRESERVE A LEGACY FOR YOU AND YOUR FAMILY.
Mortgage Basics
What is a mortgage?
A mortgage is a loan used to purchase a home. The mortgage lender provides funding that you pay back through a monthly payment, plus interest. It is a loan secured by a lien on a home, as opposed to other loans that may have no collateral.
WHY PURCHASE A HOME INSTEAD OF RENT?
- Interest payments on your mortgage may be tax deductible
- You will have a permanent place of your own
- You’ll build equity in the home as you pay off the mortgage
- A home is a long-term investment that may increase in value
- You can assure that you have stable housing costs
ARE YOU READY TO OWN A HOME?
To secure a home loan you should meet the following qualifications:
- Steady income—enough to cover monthly mortgage payments, taxes, insurance, maintenance and repairs; your monthly housing costs should be no more than 28% of your monthly gross income
- Enough money for a down payment and closing costs
- A commitment to live in your home for an extended period, since you may pay capital gains taxes if you live in a home for less than two years before you sell it
- A good credit history
TYPES OF MORTGAGES
Fixed Rate
- This type guarantees the same interest rate for the life of the loan. It is also referred to as a conventional loan and is usually a 15- or 30-year term.
Variable Rate (also known as ARM loans)
The interest varies with the market rate after a set period of time, typically three or five years, and these loans are often the choice of people who know they won’t stay in the home for a very long time.
Interest-Only Loans
These loans allow home buyers to pay only interest and no principal on the mortgage. Equity is harder to build up with this type of loan and it is riskier financially.
The Pre-approval Process
To determine how much money to lend you, your lender will do a thorough evaluation of your credit history and your ability to repay the loan. As a rule of thumb, the home’s cost should be no greater than two and one-half to three times your annual gross income.
IN GENERAL YOU’LL NEED THESE ITEMS WHEN YOU APPLY FOR A MORTGAGE
- Pay stubs for the last two to three months
- Consecutive W-2 forms for the last two years
- Signed personal tax returns with all schedules for the last two years
- Bank or investment statements for the past three months
- Information about your assets and long-term debts
- Personal identification information
Once you are pre-approved for your mortgage, you can shop for your home and make offers on property.
QUICK CONTACT INFORMATION:
U.S. Department of Housing and Urban Development: http://www.hud.gov
The Federal Reserve Board:
http://www.federalreserve.gov/consumers.htm
Federal Trade Commission:
www.ftc.gov/bcp/menu-home.htm
FirstGov For Consumers:
http://www.consumer.gov/yourhome.htm
Obtaining Your Credit Report:
Equifax: 1.800.685.1111
Experian: (formerly TRW): 1.888.397.3742
TransUnion: 1.800.888.4213
All loans are subject to credit and property approval. Program terms and conditions are subject to change without notice. Not all products are available in all states or for all amounts. Other restrictions and limitations apply.
For the Adjustable Rate Mortgage (ARM) product, interest is fixed for a set period of time, and adjusts periodically thereafter. At the end of the fixed rate period the interest and payments may increase. The APR may increase after the loan consummation.
Depending upon your credit profile, interest only loans are available and provide for the payment of interest only for a set period of time, and payments of principal and interest thereafter for the remainder of the loan term. While making interest only payments, principal is not reduced. At the end of this period your monthly payment will increase, possibly substantially, because you will be required to pay down the outstanding principal. Always consider paying more than the minimum payment to pay down the principal. JPMorgan Chase does not offer tax advice. Speak with your tax accountant or advisor to determine the effects of this loan interest on your return.
The Legacy of Homeownership Tour presented by Chase.
The Tour offers free, informational workshops, one-on-one consultations with mortgage experts and access to industry experts.
Houston - May 31st
Reliant Park
New York - June 14th
One Chase Manhattan Plaza
Washington, D. C. - July 12th
Location TBD
REGISTER TODAY!
www.chase.com/legacy
