This animation helps viewers understand the anatomy of different types of mortgage products. It explains fixed rate mortgages (FRMs) vs adjustable rate mortgages (ARMs), how they differ, how they can benefit you, and potential risks that they carry.
A dark blue background covered with small glowing dots, much like stars is revealed. Music begins, and a title appears across the screen reading “The Anatomy of Choosing a Mortgage Product.” The camera pans downwards, where an animated house takes shape.
So, you’re about to buy a home. Congrats!
The house transforms into a bottle of champagne popping, surrounded by confetti. The camera pans to the right, and two rows of houses appear in a split screen, one on top of the other. Two varying graph lines run above each of the sets of houses to show the difference in choices for mortgage products. The voiceover continues.
But before you pop that champagne, you’ll want to choose between a fixed-rate or an adjustable-rate mortgage.
The screen shifts back to the sky where the title “Fixed Rate Mortgage” appears.
The most common type of home loan is a fixed-rate mortgage.
A lock appears on screen and spins in the air. The camera zooms outwards, and all of the sudden you realize that the sky was being seen through a telescope, which is in an office of a home.
This product’s interest rate is locked in for the life of the loan...
The camera pans to the left, where there is a desk. On the desk there is an hourglass - next to the hourglass the words “10-30 years” are written out. There is also a picture frame hanging above the desk showing a family. The number of family members in the frame increases to show time passing.
—usually between 10-30 years.
The camera pans left again, to where a set of scales are sitting on the desk. A small home appears on the left side of the scales, and a counter weight appears on the right. The words “Fixed Rate Mortgage” appear next to the house on the left. The counter weight on the right hand side of the scale turns into another house. This house is outweighed by the house on the left side, and is lifted into the air. Next to the right hand side of the scale the words “Adjustable Rate Mortgage” appear.
Fixed-rate mortgages offer stability for long-term homeowners, but you may end up paying a higher interest rate than an adjustable rate mortgage.
The screen shifts back to the sky. The title “Adjustable Rate Mortgage” appears, with the acronym “ARM” under it.
Which brings us to our second option; the adjustable rate mortgage, or ARM.
The camera moves to the right across the sky. A simple line graph illustrates the fixed rate over the course of 5-10 years. The line runs through the loop of a lock. The lock unlocks from the line, and disappears. The line starts to move up and down, showing the variance in rate in the remaining loan term.
The ARM’s interest rate is fixed for 5-10 years and then varies year-to-year for the remaining loan term.
The scene shifts. Buildings appear, and a car starts to move from left to right across the screen, driving past various houses in an urban area. A young family waves from the side of the road as they pack up a moving van.
ARM interest rates vary periodically, depending on market conditions. ARMs tend to offer lower initial payments, making them an ideal short term solution...
Day quickly turns into night, and the car's headlights turn on. All of the sudden, the car is on a bumpy road in the countryside, illustrating potential for market-based risks.
—but susceptible to market-based risks over time.
The camera pans up to the night sky, where the Chase logo rests. A disclaimer is also present:
Disclosure: For Adjustable Fixed Mortgages, the interest rate may be adjusted annually after the initial fixed period based on an index and a margin. The APR May increase after loan consummation. All home lending products are subject to credit and property approval. Rates, program terms and conditions are subject to change without notice. Not all products are available in all states or for all loan amounts. Other restrictions and limitations apply. Home lending products offered by JPMorgan Chase Bank, N.A. ©2017 JPMorgan Chase & Co. [TI1]