Home Lending Help | Wells Fargo

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Home Lending Help

    

You have questions, we have answers

Top Questions

What home financing basics should I understand?

If you obtain home financing, you'll repay more than the amount you borrowed because the amount you repay is determined by several factors, including the interest and loan amount. Here are some terms you should understand.

Interest rate

  • The interest rate is the percentage of your loan amount we charge you to borrow money.
  • Interest rates are based on current market conditions, your credit score, down payment, and the type of mortgage you choose. Check today's rates.

Discount points

  • One point equals 1% of your mortgage amount. If you qualify, you may be able to pay one or more points to lower your interest rate. A lower interest rate typically means lower monthly mortgage payments.
  • Points are usually tax deductible. Consult a tax advisor regarding tax deductibility. On refinances you may be able to finance points as part of your mortgage amount.

Origination charge

  • On a mortgage, this amount includes all charges (other than discount points) that all loan originators (lenders and brokers) involved will receive for originating the loan.
  • The origination charge covers items including fees, document preparation, and underwriting costs, and other expenses.
  • On refinances, if you qualify, you may be able to finance the origination charge as part of your loan amount.

Loan term

  • Your loan term is the amount of time you have to pay off your mortgage balance.
  • Shorter loan terms typically mean higher monthly mortgage payments, but often have lower interest rates.
  • If you pay off your mortgage balance within a shorter term, you may pay less in total interest than with a longer-term mortgage.

Remember that interest rates only tell part of the story. The total cost of a mortgage is reflected by the interest rate, discount points, fees, and origination charges. This total cost is known as the annual percentage rate (APR), which is typically higher than the interest rate. The APR lets you compare mortgages of the same dollar amount by considering their total annual cost.

Monthly mortgage payment

Your monthly mortgage payment is typically made up of four parts:

  • Principal. The part of your monthly payment that reduces the outstanding balance of your mortgage.
  • Interest. The part of your monthly payment that goes toward the cost of borrowing the money.
  • Taxes. The part of your monthly payment that goes toward property taxes charged by your local government. We typically collect a portion of these taxes in every mortgage payment and hold the funds in an escrow account for tax payments made on your behalf as they become due.
  • Insurance. The part of your monthly payment that pays for homeowners or hazard insurance, which provides protection against losses from property damage due to wind, fire, or other risks. Like taxes, insurance costs are usually collected and paid from an escrow account.

Depending upon your property location, property type, and loan amount, you may have other monthly or annual expenses such as mortgage insurance, flood insurance, or homeowner association fees.

Video - The components of a mortgage payment

Video: The components of a mortgage payment

Watch this video to understand what makes up a typical mortgage payment – principal, interest, taxes, and insurance – and how they can change over the life of the loan. 

Check today's rates to see our current interest rates.

How can I start my mortgage application?

Get started through any of these convenient ways:

Apply online

Our simple and secure online mortgage application will walk you through the process step by step. If you’re a Wells Fargo customer and use your Wells Fargo Online® username and password we’ll prefill some of your information, making it easier to complete the application.

Talk to a consultant

You can also connect with a home mortgage consultant and have a conversation – about your home financing needs, your loan choices, and how much you may be able to borrow. When you’re ready, your home mortgage consultant will help you complete an application.

What happens after my mortgage application is submitted?

We'll send you disclosures listing your loan terms as well as estimated payments, and your application will be reviewed by an underwriter.

During the financial and property review, we'll:

  • Verify your employment, income, and financial information
  • Order services such as an appraisal, title insurance, and flood certification.
  • Send you a list of conditions, upon loan approval, that have to be met before you can prepare to close your loan.

Learn more about the documents you may be asked to provide.

You'll need homeowners insurance to close your loan. Get started by contacting your insurance company or learning more about homeowners insurance.

Can I make a mortgage payment online?

Yes, you can make a payment and manage your mortgage account online, anytime. Gain instant access to your mortgage account details, loan history, tax and interest data, contact information updates, and more. It's fast and simple. Get more details

What's an escrow account?

An account you fund each month as part of your total monthly payment. We use it to make property tax and insurance payments for you. Items like mortgage insurance and flood insurance may also get paid from the account. Read more about how escrow accounts work or watch a video about it.

More Information

Top Questions

Do I have to own a home to get home equity financing?

Home equity is what's available after subtracting what you owe on your mortgage (and any other outstanding liens) from your home's current market value. If you don't own a home and need financing, look into a personal loan or a line of credit that doesn't rely on home equity.

How much can I borrow with home equity financing?

The amount you can borrow is largely determined by your available equity, property type, and credit qualifications. To determine your available equity for a primary residence, take 80% of your home's appraised or fair market value and subtract the balances of any outstanding mortgages and liens on the property. If you qualify, the minimum home equity line of credit amount is $25,000 and in most cases the maximum is $500,000.

How can I use my Home Equity Line of Credit?

Your line of credit gives you convenient access to available funds at an interest rate that's typically lower than many other forms of credit.

Viewing your account

You'll receive monthly statements in the mail. And you can view your account online with Wells Fargo Online®. You can set up recurring payments so that you don't forget to make a payment, or switch to paperless statements to help prevent fraud.

Accessing your funds

Access credit when you need it. Your revolving line of credit allows you to access your available credit as you pay down your principal balance.

Using your line of credit

Your home equity line of credit is an easy and convenient way to obtain financing for a variety of situations, including:

  • Home Improvements. Use your home equity line of credit to finance home improvements that may boost your home’s value and make your home more enjoyable.
  • Large purchases or unexpected expenses. Finance important purchases, or be prepared for unexpected expenses.

Your Home Equity financing may provide tax advantages if it’s used to improve, buy, or build a home. Talk to a tax advisor for details.

Check out our quick guide to accessing your home equity line of credit online.

How can I pay down or pay off my account?

Paying down your home equity line of credit doesn't mean you have to close your account. In fact, there are significant long-term benefits to keeping your line of credit open, even at a zero balance. You’ll:

  • Retain quick access to available credit for unexpected expenses or major purchases.
  • Spare yourself the need to reapply and be approved again in the future.

Of course, you may arrange to pay off and close your entire line of credit at any time. Please call us at 1-866-404-3149 to discuss your options.

Refinancing your home mortgage?

Depending on the current interest rates, homeowners may choose to refinance their first mortgages. Typically, the bank refinancing your first mortgage will pay off and close your home equity line of credit account.

However, you may be eligible to refinance and keep your Wells Fargo home equity account open — allowing you to keep your current home equity line of credit account, terms, and access to funds — through a process called subordination. Learn more about subordination and see if it may be right for you.

What are the benefits of a fixed-rate advance option?

How does a fixed-rate advance work? On a $50,000 line of credit, you might lock in a 5-year fixed rate for $15,000 for home improvements, a 3-year fixed rate on $10,000 for major purchaes, and a variable-rate advance on $5,000, with $20,000 in available credit. If you’d like a fixed-interest rate, a fixed-rate advance option may be the right choice for you. It’s an easy way to manage your monthly payment and protect yourself as interest rates rise. Many Wells Fargo home equity lines of credit already have this feature as part of the account.

How It Works

The fixed-rate advance option gives you the flexibility to secure a fixed-interest rate on any or all of your outstanding line balances during the draw period so your payments remain the same month after month.

Benefits of a Fixed Rate

In addition to securing a fixed rate, this option gives you the power to:

  • Choose the amount of your outstanding variable-rate line of credit balance that you want to move to a fixed-rate option.
  • Change your fixed-rate advance back to a variable-interest rate at any point during your draw period. The transferred funds will be charged the variable-interest rate that’s in effect at the time of your transfer.
  • Plan for your future monthly payments with a fixed-interest rate on specified balance(s).
  • Choose the term of your fixed-rate option.

Use your line of credit in the way that works best for you

Your home equity line of credit gives you the flexibility to configure your balance in the way that best meets your needs. Call 1-866-834-9761 to review your needs with a Wells Fargo Home Equity Specialist.

Example: $50,000 Home Equity Line of Credit With An Outstanding Balance of $30,000

  • $25,000 of the outstanding balance is transferred to a fixed rate option
  • $5,000 of the outstanding balance remains at the variable interest rate
  • $20,000 remains as available credit during the draw period
 

More Information

Appraisal

A report made by a qualified person to estimate the value of a property, often used to help determine an appropriate loan limit. If you're purchasing, the appraised value usually needs to be equal to or greater than the home's purchase price.

Title insurance 

Insurance that protects the lender or homebuyer (if the homebuyer purchases an owner's coverage policy) against loss resulting from a title error or dispute.

Conditions

Standard conditions include our receipt of homeowner's insurance policy, flood insurance if necessary, and an acceptable title insurance binder.