Chase Mortgage Review: Lower, More Transparent Fees

Chase Mortgage Review: Lower, More Transparent Fees

While the cost of Chase’s mortgage services aren’t significantly different from those of its major competitors, its closing costs included lower lender origination fees. Chase’s customer service has also managed to avoid the kinds of scandals that rocked both Wells Fargo and Bank of America in recent years, which may explain its small lead in customer satisfaction surveys.

Chase Mortgage Review: Lower Fees and Standard Rates

Chase’s mortgage loans have fairly similar interest rates to mortgages at its competitors, but it does charge a much lower processing fee. Chase’s customer service for mortgage borrowers seems about average, earning proportionately fewer CFPB complaints than Bank of America but falling behind Wells Fargo. In our review of Chase’s online mortgage tools and calculators, we found that it was especially detailed in its treatment of individual closing fees. When we ran through the online estimates for mortgages with each of the three big banks, only Chase gave an accurate representation of local tax rates.

Chase isn’t without drawbacks: compared to Wells Fargo and Bank of America, its footprint of US branch locations is limited to just the major cities. If you don’t live near a Chase branch, the bank loses many of its advantages as a brick-and-mortar mortgage lender. You would be better off considering a local bank or a direct online lender like Quicken, where the lending and approval process is specifically designed to work without face-to-face interaction.

How Do Chase Mortgages Compare?

Chase’s mortgage interest rates are equal to or greater than those at other banks, but the bank is both more transparent and more lenient about its estimated closing costs. We looked at online estimates for a $198,000, 30-year mortgage from each of the three major banks to see how Chase compared.

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30-Year Fixed Rate Mortgage Estimates at Major Banks

Chase Bank of America Wells Fargo
Interest Rate 4.00% 4.00% 4.00%
APR 4.27% 4.35% 4.23%
Lender Fees $1,158 $1,792 $1,642
Taxes/Third Party Fees $7,230 $8,076 $7,565
Monthly Payment $1,077 $1,073 $1,078

Chase’s low origination fee represents big savings in an area that borrowers don’t have much control over. While each lender’s estimates for third-party fees can be adjusted by shopping for individual services, costs like the origination fee and tax servicing fees are determined solely by the lender. When it came to these expenses, Chase did the best job of minimizing costs to the borrower.

Chase’s online tools for calculating mortgage rates and fees appeared more accurate in several areas. For instance, lenders make their own assumptions about the deed transfer taxes assessed by the state and county where you purchase a home. For our borrower profile, the tax rates used in the Chase estimate were much closer to the actual deed tax than Wells Fargo and Bank of America, which both underreported those taxes by half. This made their closing cost estimates appear much lower than Chase’s costs at first glance.

Customer Service and Mortgage Servicing

Chase originated the fewest mortgages of the three biggest banks and landed in the middle of the pack for the rate of complaints versus total originations. Alongside its larger rivals, Chase was one of the five major mortgage providers fined by the Department of Justice in 2012 for mortgage abuses committed in the leadup to the financial crisis of 2009.

Mortgage-Related Complaints at Major Banks, 2013-2017

Company Mortgage Originations CFPB Complaints Ratio 2017 JD Power Rating
Chase 948,000 14,778 1.56% 764
Wells Fargo 2,155,222 25,182 1.17% 745
Bank of America 1,172,113 28,187 2.40% 767

Although Chase has avoided the level of accusations faced by Bank of America for mortgage abuses and Wells Fargo for its huge fake account scandal, the lack of recent incidents is not a guarantee of perfect service. Chase’s rating for customer satisfaction with mortgages is very similar to its competitors, and all three land solidly near the average score for all lenders. You probably won’t come across major issues at Chase, but ultimately the quality of your experience will depend on your relationship with the loan officer you meet.

Mortgage Loan Products at Chase

Chase offers all of the standard mortgage products that borrowers seek, including fixed rate and adjustable rate mortgages spanning 15, 20 and 30 years.

Mortgage Product Interest Rate APR Points
30-year fixed rate 4.00% 4.27% -0.13
15-year fixed rate 3.38% 3.63%
20-year fixed rate 3.75% 3.98% -0.25
5/1 ARM 3.63% 4.24% 0.13
7/1 ARM 3.63% 4.19% 0.13

Even though Chase doesn’t list quite as many mortgage types as other banks, it covers the three loans that make up the majority of actual mortgages in the US: 30-year fixed rate mortgages, 15-year fixed rate mortgages and 5/1 ARM loans. The bank allows borrowers some flexibility with interest rates through the purchase of mortgage points or the addition of lender credits, which raise or lower your interest rate in exchange for a lower or higher upfront cost.

While Chase is reluctant to offer nearly as many FHA mortgage loans as other banks, it does offer a product called the DreaMaker® Mortgage for people with lower down payments. DreaMaker® offers down payment options that go as low as 3%, beating the typical FHA minimum of 3.5% down. Chase’s program is similar to low-cost mortgage products at other banks, which cater to qualified borrowers along many of the same income and loan limits established for FHA-backed loans.

Where Can You Get a Mortgage With Chase?

One of Chase Bank’s disadvantages relative to other large banks is that you won’t find it in areas far from major cities. Both Wells Fargo and Bank of America operate wider networks of physical branches.

If you don’t live near a Chase branch, you lose many of the potential benefits offered by a brick-and-mortar mortgage lender. And even though Chase is considerably better at providing a smooth customer experience through its website and apps, many people will still feel that managing a complex and once-per-lifetime product like a mortgage requires more than a webpage and a phone number. If that kind of personal interaction is important to you in a mortgage experience, local banks and lenders may be a superior choice over national brands like Chase.

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