Wells Fargo is one of the largest financial service providers in the USA. This multinational financial services company provides banking, mortgage, investing, credit card, and personal, small business, corporate finance, and many other services. They also offer mortgage loans and a variety of home loan options with competitive interest rates. If you are planning to take a home loan and looking for the best mortgage loan option then you should check the below information. Here I have discussed A to Z of Wells Fargo mortgage loan and how you can apply for a Wells Fargo mortgage loan. Let’s dig into the article!
What Is Mortgage Loan?
A mortgage loan is a type of secured loan where a person can use his real property as collateral for a loan to get money. This type of loan is usually sanctioned against an immovable asset like a house, apartment, or commercial property. Here, the lender takes the asset as the guarantee for the loan until the borrower repays the total loan amount.
Types Of Mortgage Loan
There are few types of mortgage loans available. They are –
|Conventional loan||1. Can be used for a primary home, second home, or investment property|
2. Overall borrowing costs tend to be lower than other types of mortgages
3. You cancel PMI once you’ve reached 20 percent equity
4. You can pay as little as 3 percent down on loans backed by Fannie Mae or Freddie Mac
|1. You will need a minimum FICO score of 620 or higher|
2. Higher down payment than government loans
3. Debt-to-income (DTI) ratio should be between 45 percent to 50 percent
4. You have to pay PMI if your down payment is less than 20
|Jumbo loan||1. You can borrow more money to buy a home in an expensive area|
2. More Interest rates compared to other conventional loans
|1. Require down payment of at least 10 to 20 percent|
2. You will need a minimum FICO score of 700 or higher
3. You can’t have a DTI ratio above 45 percent
4. You have to show significant assets
|Government-insured loans||1. The best alternative when you can’t qualify for a conventional loan|
2. Not many credit requirements
3. Don’t need a large down paymentBest for first-time buyers
|1. Mandatory mortgage insurance premiums on FHA loans|
2. You could have higher overall borrowing costs
3. You have to provide more documentation
|Fixed-rate mortgage||1. Monthly principal and interest payments will remain fixed|
2. You can precisely budget other expenses
|1. You to pay more interest with a longer-term loan|
2. It will take more time to build equity in your home
3. Interest rates are typically higher compared to ARMs
|Adjustable-rate mortgage||1. Lower fixed interest rate|
2. You will be able to save a substantial amount of money on interest payments
|High monthly mortgage payments|
Wells Fargo Mortgage Loan
Below are the details of Wells Fargo mortgage loans and programs –
|Wells Fargo Mortgage Loan||What you need to know|
|Fixed-rate mortgage||1. Monthly principal and interest (P&I) payments stay the same over the life of the loan, so you can budget accordingly.|
2. Protection from rising interest rates for the life of the loan, no matter how high interest rates go.
|Adjustable-rate mortgage (ARM)||1. Lower initial interest rate and monthly P&I payments than on a fixed-rate mortgage with a comparable term.|
2. Rates and monthly payments can change after the initial fixed-rate period.
|Jumbo loans||Customers who need financing for higher loan amounts:|
1. Provides financing above conforming Fannie Mae and Freddie Mac loan limits
2. Interest rate discounts and other potential benefits are available through our Private Mortgage Banking group
|Low down payment options||For qualified homebuyers with limited cash for a down payment:|
1. Down payment as low as 3% on a conventional conforming fixed-rate mortgage.
2. Allows the use of gift funds and down payment assistance programs. With a low-down-payment loan, mortgage insurance will be required, which increases the cost of the loan and will increase your monthly payment. We’ll explain the options available, so you can choose what works for you.
3. Talk with a home mortgage consultant about loan amount, type of loan, property type, income, first-time homebuyer, and homebuyer education requirements to ensure eligibility.
|Government mortgage loan options||For eligible customers, options like FHA, VA, and the Guaranteed Rural Housing programs may:|
1. Offer low down payment programs
2. Allow the use of gift funds and down payment assistance programs
3. Provide options for customers with credit challenges
4. Require mortgage insurance
FHA loans have the benefit of the low-down payment, but consider all costs involved, including up-front and long-term mortgage insurance and all fees. Ask your home mortgage consultant to help you compare the overall costs of all your home financing options.
|Loans for newly built homes||For those buying a newly constructed home:|
1. Builder Best Extended Rate Lock program
2. A dedicated team that specializes in financing for newly constructed homes
|Cash-out refinance||For homeowners who want to access available equity in their home:|
1. Replaces your existing mortgage with a new loan that’s larger than the original loan’s balance.
2. When you close your new loan, you’ll have access to the additional money you borrowed to pay for major expenses.
|Home equity line of credit (HELOC)||For homeowners who want ongoing access to available equity in their home:|
1. Since a HELOC is secured by the equity in your home, your interest rate may be lower than many unsecured forms of credit.
2. During the draw period, you can borrow money as you need it — up to your available credit limit.1
3. Relationship discounts may be available for qualifying customers.
How To Apply For Wells Fargo Mortgage Loan
You can apply for a Wells Fargo mortgage loan either online or by phone call. Wells Fargo offers simplified and secure online mortgage applications therefore you can easily complete the application process. If you’re already a Wells Fargo customer then you can use your Wells Fargo Online username and password to prefill some of your information. It will make your loan application process much easier. You can apply for a Wells Fargo mortgage loan here.
Moreover, you can also connect with a home mortgage consultant about the Mortgage loan. You have to share your home financing needs, your loan choices, etc. with the mortgage consultant and they will tell you how much you can borrow. If you agree with all the terms and conditions then the mortgage consultant will help you complete an application. You can call at 1-877-937-9357 to consult with a mortgage consultant.
Once you submit a loan application, Wells Fargo will send you disclosures listing your loan terms as well as estimated payments. Moreover, your loan application will be reviewed by an underwriter. Moreover, there will be financial and property review and the bank will –
1. Verify your employment, income, and financial information
2. Order services such as an appraisal, title insurance, and flood certification
3. Send you a list of conditions that you have to fulfill, etc.
What To Consider When Applying For Mortgage Loan
A mortgage loan is a very important loan; therefore, you have to consider quite a few things before applying for a mortgage loan. They are –
Credit Scores: This is a very important factor because it plays a big part in getting approved for a mortgage. You should try to keep your credit score at least 660 or higher to get a competitive interest rate.
Monthly Income: You must have a steady source of income to qualify for a mortgage. Your monthly income can be alimony payments, child support, stock dividends, tips, etc.
Debt-to-income Ratio: For a mortgage loan, lenders usually use the 28/36 qualifying ratio. Here, 28 percent represents the amount of your pre-tax gross income allowed for monthly housing expenses and 36 percent represents the amount of your income that you can use as your housing expenses.
Down Payment: Lenders require a down payment and usually it is 5 to 20 percent of the total cost of the home. But, government-insured loans require much lower down payments.
Interest Rate: When choosing a lender for a mortgage loan, you have to compare the interest rate. Try to find a low-interest rate for your loan to save some money. The interest rate usually depends on current market conditions, credit score, down payment, mortgage loan type, etc.
Discount Points: Many lenders offer discount points and one discount point equals 1% of your mortgage amount. If you qualify for a discount point then you will be able to pay one or more points to lower your interest rate.
Loan Term: For a mortgage loan, the loan term is very important. The loan term is the amount of time you have to pay off your mortgage balance. If you agree to a shorter loan term then you have to pay higher monthly mortgage payments but your interest rate will be low. On the other hand, if you agree to a large loan term then your monthly payment will be less but your interest rate will be high.
FAQs About Wells Fargo Mortgage Loans
Can I Make Wells Fargo Mortgage Payment Online?
Yes, you can make the Wells Fargo mortgage loan payment online. With your Wells Fargo online account, you will be able to instantly access your mortgage account details, loan history, tax and interest data, contact information updates, and many more.
Does Wells Fargo Require A Property Inspection?
If you are buying a new home then Wells Fargo will do a property inspection to make your purchase offer contingent on the findings of the inspection.
What Is The Minimum Down Payment For Conventional, FHA, And VA Loans?
Wells Fargo has various low-down payment options. Here is the minimum down payment for conventional, FHA, and VA loans –
1. Conventional fixed-rate loans are available with a down payment as low as 3%
2. FHA loans are available with as little as 3.5% down
3. VA loans have no-down-payment options for eligible veterans and other eligible borrowers
Does Wells Fargo Offer Jumbo Loans?
Yes, Wells Fargo does offer jumbo loans.
Is Wells Fargo A Direct Lender?
Yes, Wells Fargo is a direct lender. Mortgage bankers and portfolio lenders fall under direct mortgage lenders.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.