Your situation and financial goals change and evolve over time. Needs change, careers unfold, and priorities shift. When change occurs, you may need to consider buying a home that may be a better fit for your lifestyle.
Our flexible financing options and low down payment programs are some of the ways we can help make buying your next home a straightforward and rewarding experience.
What are the benefits of buying my next home?
Your homebuying goals are as unique as you. The potential financial and personal benefits that go along with buying your next home may include:
- Gaining additional space. Perhaps you’ve outgrown your existing home and need more space for your family, hobbies, or your social life.
- A more manageable space. If you want to downsize or want to simplify your life, you may be ready to consider a smaller home.
- A quicker commute to a new job opportunity. Career changes may make it necessary to move to a new area and find a new home.
- Enhanced luxuries or upgrades. Additional income may allow you to purchase a home with additional amenities.
What should I consider before buying my next home?
A home is one of the largest purchases many people make. Like any major decision, homeownership requires careful considerations:
Be clear about your purchasing reasons
- Is your family changing?
- Are you down-sizing?
- Do you need to relocate for a new job?
- Are you moving to a new location?
- Do you want certain amenities or features that your current home lacks?
Estimate the cost of selling your current home
Before pricing your home, calculate sales costs, including:
- The cost of repairs needed to maintain your home’s value. If you have a leaky roof, or need electrical or plumbing work, your sales price is likely to be lower to cover those costs. Consider hiring a home inspector to uncover any hidden problems.
- Making cosmetic improvements to increase the ‘curb appeal’ of your home. Relatively lower cost items, such as painting or landscaping, can make your home more appealing to potential buyers.
- The amount you will pay in real estate commission. Real estate agents receive a percentage of the home sale as a commission. If you are considering selling your home yourself, estimate your time and costs for advertising, showing the house to prospective buyers and handling negotiations.
- Other miscellaneous expenses.
- Is there a prepayment penalty on your mortgage?
- Will you incur the cost of temporary storage for your personal items while showing to potential buyers?
- Have you planned for moving and some packing costs?
Estimate the sales price for your current home
- If your home is priced realistically, you may be able to sell it faster.
- Property appraisers set a price by comparing a home to recently sold, nearby properties similar in square-footage, room number, age, and features.
- Your real estate agent will help you decide on a listing price by getting a list of comparable properties.
Consider purchasing a home that needs renovation
- Our Purchase & RenovateSM loan may enable you to buy and repair with one loan.
- Consider that remodeling and repairs may require hiring a contractor, depending on the loan you choose.
- Our mortgage plus home equity financing options combine a Wells Fargo first mortgage together with home equity financing. There may be tax benefits and reduced closing costs with these options. (Consult a tax advisor on the deductibility of interest.)
How can I get started with homebuying?
Knowledge of the area where the property is located, as well as an understanding the financial considerations that go along with buying a home can increase your chances for a successful start. Here are some steps you can take to get started.
Create a financial plan
Understand your credit needs and borrowing ability.
- Check your credit history and make a plan to get your credit in shape if necessary.
- Determine how much you can put toward a new home. The total amount you need is the sum of your down payment and closing costs.
- Calculate your housing and debt-to-income ratios to assess your ability to make payments.
- Use our monthly payment calculator to estimate payments for various mortgage amounts and interest rates. Your monthly payment will usually also include an amount for property taxes and homeowners insurance. And, if your down payment is less than 20%, you’ll generally also need to get private mortgage insurance (PMI).
Set a time frame
Determine when you’d like to buy your home and use your financial and credit information to establish a budget that can help you achieve your goal.
Consider using a real estate agent
While it’s easy to search for homes online today, you receive invaluable information and assistance by working with a licensed real estate agent.
Many real estate agents also hold a REALTOR® designation. A REALTOR® is a member of the National Association of REALTORS® (NAR). The NAR trains its members in the most effective professional practices and requires them to abide by its strict Code of Ethics.
A licensed real estate agent may help you navigate the homebuying transaction more smoothly. Some of the benefits you’ll enjoy include:
- Professional assistance and representation
- Marketplace experience and access to up-to-date information
- Services provided at no direct cost to you because the agent is compensated from the seller-paid commission when you buy a home
Get started finding a real estate agent by asking friends and family for referrals, ask your home mortgage consultant, or do your research online.
What home financing basics should I understand?
If you obtain home financing, you’ll repay more than the amount you borrowed. How much you repay is determined by several factors, including your interest rate and loan amount. Here are some terms you should understand.
- 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.
- 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 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.
- 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.
- 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, 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.
How can I estimate how much I might be able to borrow?
There are different ways to estimate a price range that's appropriate for you. The words prequalification and preapproval may refer to two different services provided by mortgage lenders. While both are useful options for learning your potential purchase price range, it’s important to understand how they differ.
We offer two prequalification options:
- Prequalification letter. If you’re considering buying a home, this gives you a general estimate of the loan amount you may qualify for based only on preliminary information you provide (without us obtaining a credit report).
- Prequalification with credit letter. If you expect to buy a home but might not be ready to start making bids, this letter carries a little more weight. It provides a general estimate of the loan amount you may qualify for based both on preliminary information you provide and an initial review of a credit report.
Our PriorityBuyer® preapproval letter empowers you to bid on a home with confidence and lets sellers and real estate agents know you mean business. It’s more formal than a prequalification because it:
- Confirms you’ve submitted an application, are credit-checked and have completed the first loan decisioning phase.
- States the approximate mortgage loan amount and purchase price range for which you qualify, subject to certain conditions or documentation.
- Means we may offer a loan commitment once all information on your application is verified, underwriting requirements and conditions are satisfied and acceptable property-related reports are provided.
Benefits of a preapproval
Having a PriorityBuyer® preapproval letter can provide several benefits. It identifies you as a serious buyer, adds to your negotiating strength when making an offer, lets you shop confidently, and may allow for a faster closing.
It can also help you identify and address possible qualification needs early in the homebuying process. Plus, if you’re a first-time homebuyer with no record of previous mortgage payments, a preapproval may help you feel much more confident pursuing your first home purchase.
Have questions or need help? Our home mortgage consultants are available to help you throughout the home financing process. Contact us today.
How will you evaluate my home financing application?
When you apply for home financing, we generally use these four main criteria to assess your application.
Do you have a reliable, continuing source of income to make monthly payments?
- Income can come from primary, second, and part-time jobs, as well as overtime, bonuses, and commissions.
- You may use other sources of income if you want them considered for payment, provided they can be verified as stable, reliable, and likely to continue for at least three years. Some examples include retirement or veteran’s benefits, disability payments, alimony, child support, and rental or investment income.
Current debts and credit history
Do you pay your bills, loans, credit cards and other debts on time?
- We examine your payment habits before deciding to loan you money.
- We also review your credit history and credit score.
Assets and available funds
Do you have enough funds for a down payment (if you're buying a home) and closing costs?
- You may use funds from various accounts including savings accounts, certificates of deposit (CDs), investments, and retirement funds.
- If you're buying a home, in some cases, you may be able to use gift funds toward closing costs and all or part of your down payment.
- Generally, you’ll also need to show that you have additional funds in your accounts to cover several months of mortgage, tax, and insurance payments.
What is the market value of the property you want to finance?
We will order a property appraisal to make sure the value of your property meets our underwriting requirements.
Responsible lending guidelines
We approve applications where we believe the borrower has the ability to repay the loan or line of credit according to its terms. We use two ratio-based guidelines to evaluate your ability to repay.
Debt-to-income ratio is the percentage of your monthly income that is spent on monthly debt payments.
- We compare your expected monthly mortgage payment (principal, interest, taxes, and insurance) plus other monthly debt obligations to your gross (pre-tax) monthly income.
- Mortgage program guidelines vary, but a good rule of thumb is to keep your total debt level at or below 36% of your gross monthly income.
Housing-to-income ratio is the percentage of your monthly income that is spent on monthly housing payments.
- We also compare just your expected monthly mortgage payment (including taxes and insurance) to your gross monthly income.
- Mortgage program guidelines vary, but a good rule of thumb is to keep your housing expense level at or below 28%.
Even if you fall within the 28%/36% guidelines, make sure you’re comfortable making your monthly mortgage, insurance, and tax payments, in addition to all of your other monthly payments. Remember that homes have other costs — such as utilities, maintenance, and repairs — that may not exist if you rent.
How can I find a home that meets my needs?
In today’s world of instant access, you have a wealth of options available to you through internet searches and mobile apps. You can find detailed information, pictures, as well as video tours of homes available for sale.
In addition, you can receive valuable information and assistance by working with a real estate agent to locate properties for sale that meet your needs. Real estate agents make it their business to know about communities and the homes within them.
As you begin your search, keep these items in mind:
Location, features, and amenities
- Location is as important as appearance or size. Do you need to be in a particular school district, close to a job, public transportation, or day-care facility?
- Consider which features and amenities you want in your new home using our home wish list (PDF)*. Separate “wants” from “needs” and prioritize your list.
Types of homes
- A single-family home is one of the most popular options.
- Condominiums, town homes, and co-ops all offer different lifestyle and ownership features. You’ll need to budget for monthly fees for garbage and snow removal, landscaping, and similar services charged by these communities.
Consider newly built homes in addition to existing homes. Our Construction Lending Center provides financing tips and buying considerations.
Sometimes finding your ideal home involves compromise. You may want to consider “a diamond in the rough” — a place you can transform with a bit of ingenuity or some renovations. Ask a home mortgage consultant about our Purchase & RenovateSM loan that allows you to buy a home and make renovations and repairs in one transaction.
If you aren’t already working with a real estate agent, your home mortgage consultant can provide you with information to contact real estate agents in your area. Your real estate agent and home mortgage consultant will work together to help make homebuying a rewarding experience.
What can I expect during the homebuying process?
Your real estate agent can help you through each stage of the homebuying process.
As you go through the process it’s a good idea to have a preapproval for maximum leverage.
Our PriorityBuyer® preapproval letter identifies you as a serious buyer, adds to your negotiating strength when making an offer, lets you shop confidently, and may allow for a faster closing.
Make an offer
Work with your real estate agent to determine the appropriate amount for your initial offer based on comparable home sales, market value, condition of the home, and your closing date.
Put your offer in writing
Handle all negotiations in writing to make sure both parties understand the terms of the agreement. If you do negotiate verbally, follow up in writing.
Submit a deposit
This "good faith" deposit demonstrates your commitment to the transaction.
Finalize your purchase contract
The contract is a legally binding contract between the buyer and seller describing all the terms of the transaction. Depending on your state, an attorney, real estate agent, or title company may help negotiate and draft the contract.
Other tools and resources
While our Learning and Planning Center helps you understand all the stages of the home financing process, we also provide additional tools and resources.
Explore your loan options
We can help you learn about different home loans. Review the loan choices below and visit our Loans & Programs area.
|Loan options to consider:
||Lower payments starting out
||Lower down payment
||Money for renovations
||Higher loan amount
|Fixed rate mortgages
|FHA and VA loans
|Purchase & RenovateSM Program
|Mortgage + home equity financing
Find the Right Loan for You
Customize and compare rates, payments, and estimated closing costs.
We focus on your mortgage and home equity needs with the goal of delivering a straightforward and convenient application experience. Let us show you how easy it is to apply for mortgage or home equity financing with Wells Fargo. Click through the steps below to learn what to expect from the application process and consult our frequently asked questions to learn more about the lending process.
The mortgage application process
What are the steps to apply for a mortgage?
Step 1: Gather essential information.
Before you start, have the following information on hand:
- Financial information: Income, asset, and expense information.
- Property information: Estimated purchase price and down payment amount (if buying) or estimated property value and loan amount (if refinancing).
Step 2: Begin your application
Get started through any of these convenient ways:
- Call us at 1-877-937-9357, Monday – Friday, 7:00 am – 9:00 pm, and Saturday, 8:00 am – 4:30 pm Central Time.
- Connect with a local consultant by phone or in person to start the application process.
- Complete the online contact form to have a home mortgage consultant contact you.
Your home mortgage consultant will ask for the financial and property information you’ve gathered.
Step 3: Provide supporting documents.
Your home mortgage consultant will:
- Order a credit report and request any additional documents that we’ll need from you.
- Provide important disclosure documents to review, sign, and return, including:
- A Good Faith Estimate that gives a breakdown and estimate of your closing costs.
- A Truth-In-Lending Disclosure that shows terms of the loan, the monthly payment, the annual percentage rate (APR), and the costs of making and closing the loan, including your finance charges.
Learn more about requested documents we may need.
Avoid delays by submitting legible, complete documents as soon as possible, along with any required fees.
Do I need to pay a fee to submit a mortgage application?
Yes, there is a fee to apply for a mortgage. Fees cover the cost of the credit check, verification of your financial information, and property appraisal. Fees vary by loan type and the location of the property. Your home mortgage consultant will provide specific fee details during the application process.
Is there an advantage to locking in my pricing?
If you want to avoid the possibility that interest rates will rise before you close on your home loan, you can lock in your loan pricing after your mortgage application is completed.
For more information, please refer to the Loan Pricing Disclosure.
Is the process different for some types of mortgage loans?
Yes, renovation and new construction mortgage applications involve some additional steps.
If you're purchasing and renovating or refinancing and renovating, you'll need to estimate the post-improvement value of the property. The property appraisal obtained during the processing of your loan must support this estimate.
Visit our Home Improvement Lending Center for more information.
New construction mortgages
When you're purchasing a home from a builder, the new construction mortgage process is very similar to the process for buying an existing home. You can choose a pricing lock for an extended period. This protects you from financial market fluctuations while your new home is being built.
Visit our Construction Lending Center for more information.
After you apply for your mortgage, home equity loan, or home equity line of credit, we’ll work with you to ensure that the process is a straightforward and satisfying experience. We make it easy for you to track your application status online and get answers to your questions, every step of the way.
After you apply for a mortgage
What are the steps after my mortgage application is submitted?
Your home mortgage consultant will submit your application for review. If additional documents are requested, learn more about them in our online document library.
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.
You’ll need homeowners insurance to close your loan. Get competitive quotes from multiple insurance providers through Wells Fargo Insurance. Call 1-877-260-7471, Monday through Friday, 7:30 am to 8:00 pm or Saturday from 9:00 am to 4:00 pm Central Time.
How does the mortgage closing process work?
Prepare to close
Once your application is approved, we’ll work with you and your closing agent to complete the following steps:
- Ensure all loan approval and closing conditions have been met.
- Confirm or set a closing date to sign your loan documents.
- Review the title insurance to make sure you have rights to the property.
- Review your homeowners insurance policy to make sure you have adequate coverage.
Before your closing, you'll receive your final figures, which include closing costs, escrows and, if you’re buying a home, the down payment. Your closing agent will let you know the dollar amount, if any, you need to bring to your closing, so you can obtain a cashier’s check.
We’ll send the closing documents to your closing agent. On your closing day, review the documents carefully with your agent, then sign and date them.
- If you're buying a home, collect the keys and move in. Congratulations!
- If you're refinancing, you have a three-day right-of-rescission to cancel the transaction.
After your loan closes, consider managing your account online. Wells Fargo Online® gives you convenient access to account information, tax data, and payment options. Learn more about online payments or sign up for online banking.
How can I keep track of my mortgage application?
Your home mortgage consultant can answer any questions regarding your application status. Also, our Online Application Status allows you to:
- Track your loan every step of the way in the privacy of your own home or wherever you have internet access.
- Receive updates regarding the progress of your mortgage application.
- Check your “action item” list.
- Find out what documents are needed, where to send them, and more.
What can I do to help my mortgage close on time?
Here are a few important steps you can take to help your mortgage loan close more quickly:
- Provide accurate information during your loan application interview. Discrepancies in your credit history, employment history, or current bank account balances could delay your application.
- We may request additional documents as we process your application. Help keep your application moving by submitting them promptly. If additional documents are requested, you can learn more about them in our online document library.
- Do not make big purchases, take on additional debt or make large deposits or transfers unrelated to your loan until after your closing.
Is the process different for other types of mortgage loans?
Yes, renovation mortgages and new construction mortgage loans involve some additional steps.
- For all renovation loans, we base the appraised value on the completed improvement value.
- Wells Fargo must approve your contractors and close the loan before work can begin. Our funding department will assist you in making interim payments to your contractor(s).
- If you have an FHA 203(k) loan, we must perform inspections of the work before we release funds.
- Once the inspector is satisfied with the work quality, we release the funds from the escrow account. The checks are made out jointly to you and your contractor. Typically, we do not release funds until work is completed. Upon completion of the project, we perform a final inspection and we disburse the final funds.
Visit our Home Improvement Lending Center for more information.
New construction mortgages
- You can choose a pricing lock over an extended period. This gives you protection from financial market fluctuations over the time your new home is being built.
- We’ll work with you to get your permanent loan approved. We’ll also get the final plans and specs so that we can order an appraisal.
- After we have the appraisal and a fully executed purchase contract, we’ll submit the entire package for final construction loan approval.
Visit our Construction Lending Center for more information.
Manage Your Mortgage Account
Manage Your Home Equity Account
- Get started with your new home equity account
- Learn about your payment options
- Learn how to use your account and access your funds
- Find the answers to your home equity questions