JPMorgan Chase introduced a new grant available to first-time homebuyers in 6,700 communities that the U.S. Census has identified as majority Black and Latinx residents. “Systemic racism is a tragic part of America’s history,” said Jamie Dimon, chairman and CEO, JPMorgan Chase & Co., in a press release. “We can do more and do better to break down systems that have propagated racism and widespread economic inequality, especially for Black and Latinx people. It’s long past time that society addresses racial inequities in a more tangible, meaningful way.”
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Find: Buying a Home in 2021? Here’s What You Need To Know
The U.S. Census showed that in the fourth quarter of 2020, Black homeownership was at just 44%, reports The Washington Post, the lowest amongst all minority groups. Chase’s 2021 Homebuyer Grant seeks to bridge the gap on this racial inequity with a $5,000 grant that can be used toward closing costs and down payment on Chase DreaMaker, Standard Agency, FHA and VA mortgages. According to the National Association of Realtors, 26% of first-time homebuyers took out an FHA loan in September 2020, down from 32% in March 2020.
A Chase spokesperson told GOBankingRates that the latest grant expansion is part of Chase’s $30 billion Path Forward commitment announced last year to help close the racial wealth gap. The Homebuyer Grant combines with other programs, including the aforementioned DreaMaker mortgage, to help homebuyers in underserved communities.
The DreaMaker mortgage provides competitive interest rates and down payments as low as 3%, which can come entirely from gift funds, according to the Chase website. Borrowers can earn an additional $500 upon completion of a homebuyer education course.
In addition to details about the grant, Chase offered additional tips for prospective homebuyers seeking an affordable mortgage.
Determine All Costs Associated with Buying a Home to Know What You Can Afford
Buying a home involves more than just a down payment and your monthly mortgage payments. Closing costs can include inspections, fees and a home inspection. Ongoing expenses may include home repairs, property taxes and insurance. “It’s important to factor in the additional expenses beyond your mortgage payment that come with homeownership,” says a Chase spokesperson.
Additionally, evaluate your budget to see how much you can afford monthly, given all the expenses that go into homeownership. “As a homebuyer, you’ll want to have a certain level of comfort in understanding your monthly mortgage payments and other expenses,” stated the Chase spokesperson. “A home lending advisor can help you do so.”
Take Advantage of Digital Tools to Better Understand Your Credit and Finances
A recent survey of Chase customers found that 80% prefer to manage their finances digitally. Check and track your credit score online to keep tabs on your finances, the Chase press release advises. Just make sure you’re following your FICO score, the one issued by Fair Isaac Company, which is the one that most lenders use. “When it comes to homeownership, your credit score, along with your debt-to-income ratio, are the major factors in determining if you’ll be approved for a mortgage and the interest rate you’ll receive,” the Chase spokesperson explained.
Seek Out Other Grants and Funding Opportunities
There may be more options for first-time homebuyers than people think, the Chase press release affirms. Search online for grants and down-payment assistance. Your banker or mortgage broker may be able to steer you toward programs in your area, but don’t be afraid to ask around in local networking groups for opportunities you might not find on your own.
Build a Team of Advisors Who Can Guide You
In addition to your lender, you’ll want to build a team of professionals who can guide you through the homebuying process. A real estate agent, a home contractor or inspector you can trust, plus a trusted friend or relative who has been down the path already can all help you as you take this exciting step in your financial life.
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This article originally appeared on GOBankingRates.com: A New Grant for Black Americans Offers Free Money for a First Home