There are few things as comforting as going home to a place that has the customer’s name on the title deed. However, to get to that point requires either a substantial amount of saving or access to a mortgage loan. There are many institutions that provide finance for mortgage loans, however, not all of them provide loans tailored to customers. In this review, we take a look at the Wells Fargo Mortgages to see how they live up to the high standards set by the industry.
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About Wells Fargo
In 1852, Wells Fargo started out as many of the banks in that era. It was known for its services such as the gold buying and the selling of paper bank drafts. Furthermore, they also had the responsibility of a rapid transport system. This became the foundation of the pony express and the Overland Mail Company.
In the 1900s, the bank expanded to over 6,000 locations, such as New York, new Jersey, Chicago, Alaska, and more. The bank also moved its headquarters to San Francisco shortly before the disastrous earthquake struck.
A period of steady growth followed and the bank, along with other banks in the U.S. enjoyed a long period of growth. In 2008 the subprime mortgage dilemma struck and Wells Fargo was on of the few banks who could weather the storm. Unfortunately, allegations surfaced later that the bank was party to sub-prime deals and also involved in discrimination in their lending.
For a full review on Wells Fargo, read here.
The Key Differences Between Fixed Rate and Adjustable Rate Mortgages
Fixed Rate Mortgages
With this loan type, customers will have a monthly payment that remains the same for the life of the fixed period. This means that the interest and principal debt portions will not change even when there are fluctuations in the market. Furthermore, customers have access to a variety of loan term options. This loan also provides customers with the ability to add temporary payment reductions. Although customers are protected from interest rate hikes, the overall interest paid is higher on a longer term than on a shorter term loan. Finally, this is a good option for those who plan on staying in their house for a long term, as the monthly payments are higher on the shorter term.
Adjustable Rate Mortgages
With this loan type, the interest rate and monthly payments remain the same for an initial period of 5, 7, or 10 years. Thereafter, the rate adjusts annually. Furthermore, with this loan type, the loans are available in a variety of longer terms. It also includes an interest rate cap which prevents the interest from going too high. These loans typically have a lower monthly payment than the fixed options. However, monthly principal and interest payments may increase when the interest rates adjust. Finally, this is the ideal loan type for those who expect future income growth, plan to move or to refinance within a few years.
Wells Fargo Mortgage Product Offerings
New Construction Lending
This is the opportunity for customers to purchase a newly built home. This will give them a chance to pick their own fittings and finishes to suit their individual needs. There are a number of reasons why a newly constructed home should be considered.
- Newer homes offer clever storage initiatives.
- They consider energy-efficient layouts.
- Newer building materials are often more healthy as they’re free from asbestos, lead, etc.
- The modern wiring, piping, and alarm systems provide customers with greater peace of mind.
These loans are loans provided by the Federal Housing Administration (FHA). Customers benefit from fixed-rate and adjustable rate financing with down payment options as low as 3.5%.
- This loan allows customers to use a gift or a grant for all or a portion of their down payment and closing costs.
- Furthermore, it requires less cash upfront, but customers typically have to pay FHA mortgage insurance premiums.
- Also, customers can apply with a co-application, even if the person doesn’t live in the home.
- Finally, customers can typically only have on FHA mortgage at a time.
Low Down Payment Loan
Customers have the opportunity to get a conventional fixed-rate mortgage with a low down payment as low as 3%. Furthermore, there are no area median income requirements.
- Customers can use gift funds and down payment assistance programs.
- The loan type allows customers to show their credit history from sources like rent, tuition, and utility payments.
- It also allows customers to qualify with income from rentals or from someone who lives with them but is not a borrower.
- Low down payments require mortgage insurance. Furthermore, there is an increased loan cost and monthly payment.
- Finally, the home must be the property where the customer will live as their primary residence. Also, the property must be a single family dwelling.
This loan is provided by the Department of Veteran Affairs (VA) and offers the possibility of a low or no down payment. Furthermore, customers have the option between a fixed-rate and adjustable rate loan.
- This option does not requie a monthly mortgage insurance.
- The loan type allows closing costs to come from a gift or grant.
- Furthermore, customers are required to pay a one-time VA funding fee that can be financed into their loan or paid in cash at closing.
- Finally, customers can get VA financing for their primary residence only.
Easy to Own Guaranted Rural Housing Program
This loan type is provided by the U.S. Department of Agriculture (USDA). It provides low to moderate income buyers with the finance to become home owners in rural areas.
- The loan type provides finance of up to 100% which means there is no required down payment.
- Furthermore, the repayments are easy to budget for as the bank offers long-term fixed-rate terms.
- It also allows the customer to finance closing costs, legal fees, and other fees that may come up during the application process.
- Finally, customers are required to pay a once-off guarantee fee and thereafter an annual fee to the USDA’s Rural Development program.
This is a loan type that is higher than the loan packages offered by Freddie Mac and Fannie Mae. Customers previously had to do a combination loan of mortgage and home equity to do this, however, the jumbo loan simplifies matters.
- The loan is available in a variety of fixed-rate and adjustable-rate loan options.
- Customers should be able to add extra mortgage features such as a temporary payment reduction.
- Finally, the minimum jumbo loan amount is greater than $424,100.
This is the ideal loan for those who want to buy a home of their own but they don’t have the means to put down a large down payment. This is also for those who don’t fit into the traditional credit parameters.
Purchase & Renovate Loan
Customers who need to access a large amount of money in order to perform repairs and renovations to their property, will find this suitable.
- Customers have access to one loan to purchase a home and make renovations and repairs.
- There are conventional or FHA 203(k) loan options.
- The loan types are available with a fixed or adjustable rate.
- Finally, the loan type includes single-family, one-to-four unties, planned unit developments, and condominiums.
Home Affordable Refinance Program (HARP)
Often, refinance programs require a substantial amount of home equity, which could leave homeowners at a loss when they need to access to funds for various reasons. With the HARP program, owners are able to refinance even if they owe more than their homes are worth. There are strict requirements though:
- Customers need to be current on their mortgage payments.
- They haven’t already financed the same property under HARP.
- The current mortgage is owned or guaranteed by Fannie Mae or Freddie Mac.
Home Equity Line of Credit (HELOC)
This type of loan helps customers use the equity in their home responsibly.
- There are annual and lifetime rate caps.
- Customers benefit from fixed-rate advances.
- The payments will rebuild the equity.
To save towards that down payment, read here for Wells Fargo options.
Critical Reviews Rating Wells Fargo Mortgages – 9 of 10
Wells Fargo really knows how to hit it out the park with finance options. The mortgages aren’t any different as customers have a myriad of options available to them. Furthermore, the repayment structures and down payments are favorable to the needs of the customers. There are loan types that assist clients in all walks of life. Wells Fargo makes it easier for consumers to access a mortgage.
The only damper on the mortgage front is the confusion of the various options. The information is all over the show and for customers to have a proper idea of what is available to them, they will need to go into the branch. This makes it a bit frustrating for those who want to do all their research before going out to look for the home of their dreams.
Some mortgages benefit from the linking of a checking account. Read here to learn more about the options from Wells Fargo.