3 mortgage/homebuying tools for new homeowners
3 Chase mortgage resources to use before buying a home
Buying a home is exciting, and having the information, tools and resources you need can help. Whether it’s figuring out how much home you can afford, understanding different financing options, or navigating the closing process, there are several steps along the way. Fortunately, you don't have to go it alone. A Chase Home Lending Advisor can help, and there are several online mortgage resources available as well.
Before you start browsing online listings, you should determine how much home you can afford. Many factors go into this figure, so using our home affordability calculator is a great way to get this information.
Simply enter your monthly income, monthly expenses, down payment, interest rate, property taxes, property insurance, and loan term and get an estimated home price. The calculator then breaks down your monthly mortgage payment into principal and interest and taxes and insurance. After all, it's important to understand that you're ultimately paying more than the total purchase price for a house. Interest and taxes can add up quickly.
To find out how much home you can afford, you need to make sure you have the correct figures to input into our affordability calculator:
- Loan term: Choose from the standard 15-, 20-, and 30-year loan periods.
- Monthly income: Include your entire household (for example, you and your spouse) income before taxes.
- Monthly expenses: These include monthly payments for debts such as car payments, student loans, credit card statements — basically, anything that would show up on or affect your credit report. They don't include expenses such as current rent, utilities, transportation, food, gym memberships, or other purchases. Add up the relevant expenses to get this total.
- Down payment: As a general rule, financial experts recommend putting a down payment of at least 20% on a home. This money can come from savings, investments, your 401(k) or IRA, or financial gifts from family or friends. If you don't have this much money saved up, you might be able to put less down but will have to pay additional private mortgage insurance.
- Interest rate: While factors such as your credit score will affect your interest rate, you can find current rates for your ZIP code online.
- Property taxes and fees such as homeowners’ association dues: These figures will vary by state and county. You can estimate your tax percentage through your county government website or your real estate agent.
- Property insurance: Reach out to your insurer to find out what percentage you'll have to pay in homeowners and hazard insurance to protect your home from theft and disasters.
Once you've plugged in these numbers, the calculator will automatically generate a home price and an estimated monthly payment amount. Play around with loan terms and down payments to get different results. This will give you a good idea of how much house you can comfortably afford. Keep in mind, however, that you might not actually qualify for this much and that different mortgage loan types will result in different payment totals. A Chase Home Lending Advisor can help you weigh your options.
How-to guides and written resources
Chase offers an extensive library of how-to articles to help guide you on your home buying journey. These resources are helpful for first-time homeowners and returning buyers alike. Browse these resources before and during any step of the home buying process if you need a quick refresher or want to prepare for the steps ahead. Topics are broken down into six easy-to-navigate sections:
- Getting started: If you haven't started searching for a home yet, use these guides to determine how much house you can afford, how much of a down payment you can afford, how much you can afford to borrow, how to find your credit score, how to get prequalified for a mortgage, tax benefits and more. It can also help you decide whether to rent or buy.
- Finding a home: This is the fun part. Once you've set a budget, educate yourself on how to work with a real estate agent and a home lending advisor, find your dream home, make an offer and more.
- Financing a home: When you're ready to make an offer on a home, it's important that you understand the financing and closing processes, as well as all the paperwork involved. Use these resources to learn about things like interest rates, mortgage points, closing costs, mortgage types and documents you'll need for your loan application.
- Closing on a home: Many steps go into the closing process, which is when the home officially changes hands from seller to buyer. Learn about the importance of having a home inspected and everything that goes into that process. Then review the final steps you'll need to complete before the home closing and how an escrow accounts work.
- Calculators and resources: Here you can find Chase's affordability tool, mortgage calculator, and home value estimator to help you make smart financial decisions.
- FAQs: If you need more information, you can see what other homebuyers are asking about regarding credit, interest rate, and more. And if there's anything you can't find online, a link to a home lending advisor is right at your fingertips.
Within each guide, you'll find informational videos and interviews with financial and real estate experts as well as real-life homebuyers. Watch these short clips to learn tips, advice, and terminology from real people. When you feel you're ready to start the prequalification process, simply click on the mortgage qualification request link in each article to get started.
You can also find valuable and time-saving PDF checklists to print out or download to your computer or device. These include:
- A homebuyer's checklist to compare all the houses you've seen.
- A sample mortgage application to prepare for the approval process.
- A mortgage application checklist to make sure you have all the documents you need.
- A lending criteria guide so you know everything the bank considers when looking at loan applications.
- Mortgage types, terms to know, and FAQs.
- A home inspection checklist.
- A moving timeline to help you get organized six weeks out all the way to the day-of.
- A guide to understanding your escrow statement.
Chase's mortgage calculator is a great tool to estimate what the total monthly payment will look like for homes in your price range. You'll plug in your loan purpose (purchase or refinance), property type, property use, state in which it's located, the home price, your down payment, any discount points you'll be paying, and your credit rating.
Discount points are simply a way of letting you pay interest in advance in order to have a lower interest rate and a lower monthly mortgage payment. One discount point equals 1% of the total amount of your loan. Thus, for a $200,000 loan, one point would be $2,000. For home buyers who anticipate having a longer-term mortgage and spending a lot of time in their new home, this may be the way to go.
If you haven't already determined your credit score, you can do this at no cost once a year through AnnualCreditReport.com or by contacting one of the three major credit agencies: Equifax, Experian, or TransUnion.
If you have an excellent credit rating, 750 or over, it can help you qualify for very low interest rates. But even if you have just a fair rating, in the 620 to 659 range, you may still qualify for a mortgage.
After you've entered all this information, the calculator will generate estimated mortgage rates and monthly payments for both fixed-rate and adjustable-rate loans.
Don't get overwhelmed by the home buying process. It’s important to educate yourself before you get started, and a Chase Home Lending Advisor is always available to help you along the way.