RISMEDIA, Oct. 24, 2005 — Chase Home Finance, one of the nation’s largest residential mortgage lenders, announced the Chase Lock-Solid Platinum Program, its new long-term lock offer to ease borrowers’ concerns over rising interest rates while their new home or condominium is being built.
Chase Home Finance also announced Chase SecureFlex, which helps borrowers with good credit lock in a low, stable monthly payment while assuring them they will never owe more than when they started.
Chase is the first lender to offer this primary long-term lock program enabling borrowers to lock in today’s low rates for up to 12 months on 15 and 30-year fixed-rate loans. Borrowers who want more flexibility can lock today’s rate for up to 12 months on a wide range of Chase ARMs featuring initial fixed terms of three to 10 years as well as interest-only loans. The Chase Lock-Solid Platinum program also offers extended lock terms of up to two years exclusively for Chase Premier Builder Relationship customers.
“Chase Lock-Solid is the perfect solution for borrowers who want the peace of mind knowing that their interest rate and monthly payment will be protected while their dream home or condo is being built,” said Rich Miller, National Builder Executive, Chase Home Finance. “Plus they can take advantage of our float-down option if interest rates go down.”
At application, borrowers pay a deposit to lock in their rate, which is applied directly to fees for locks up to 12 months when they close on their mortgage. If rates drop during the lock period, the borrower can “float down” to the lower rate within 60 days of closing and switch to a fixed-rate loan or another ARM product.
The Chase Lock-Solid Platinum program features include:
• Free six-month rate lock with deposit
• Ability to lock an interest rate for up to 360 days before closing
• Option to “float down” to a lower interest rate at no extra cost within 60 days of closing
• One-time switch to any eligible Chase Home Finance mortgage loan product within 60 days of closing with current pricing at no extra cost
In related news, Chase Home Finance announced Chase SecureFlex, which helps borrowers with good credit lock in a low, stable monthly payment while assuring them they will never owe more than when they started.
With Chase SecureFlex, Chase becomes the first major lender to give borrowers a smart alternative to the popular Option Adjustable Rate Mortgage, which carries the risk that a home loan balance will grow – not shrink – over time.
Chase SecureFlex borrowers – consumers with strong credit histories – can lock in today’s low interest rate for three full years. With principal payments optional, a family’s monthly payment remains relatively low. Even when the rate starts adjusting annually for the next seven years, the new monthly payments will always cover the interest due, so unpaid interest does not build up and create negative amortization.
In comparison, the Option ARMs offered by other lenders allow borrowers to pay less each month than the accrued interest. In fact, some loans allow a borrower’s interest to accumulate until the amount borrowed equals 125 percent of the original mortgage amount. That creates financial risk for family budgets if home prices fall or the family income is reduced or cut off by unemployment.
“Chase wants to help each homebuyer build a strong foundation for long-term home appreciation,” said Tom Wind, co-Chief Executive Officer of Chase Home Finance. “We know buyers want to keep their monthly payments low, but we don’t think they should have to put their hard-earned equity at risk. That’s why we created Chase SecureFlex as an alternative to the riskier Option ARM.”