Are you a homeowner exploring options to consolidate your debt? Your home is one of your largest assets. Learn more about using the equity in your home to consolidate your higher interest rate loans or credit card balances.
Before you take steps to consolidate your debt, you may want to consider the following:
One loan replaces many loans
Think twice about using your credit cards
Improve your credit
Look into your credit options
If you obtain a loan to help you consolidate debt you will repay more than you borrowed. In addition to your interest rate, term and loan amount, how much you repay is determined by several factors. Here are the components you need to know:
Remember that interest rates only tell part of the story. The total cost of a loan 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 enables you to compare mortgages of the same dollar amount by considering their total annual cost.
Depending upon your loan type, property location, property type and loan amount, you may incur other monthly or annual expenses such as mortgage insurance, flood insurance, and homeowners association fees.
Wells Fargo’s home equity options are available with no application fees and a choice of closing cost options, and have competitive rates and potential tax advantages. (Consult your tax advisor on the deductibility of interest.)
To get started:
- Find out more about home equity rates and payment. Check Today’s Rates.
- List the type of debt you want to consolidate, such as credit cards, car payments, personal loans, and revolving charge accounts. For each account, have these ready:
- Account balance
- Interest rate
- Minimum monthly payment
- Time remaining until debt is paid in full
- Determine how much your new payment will be with the consolidated loan.
When your application is complete, we review the following four components:
Learn more about establishing and improving your credit
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.
- Your credit history and credit score are also examined prior to deciding to loan you money. Wells Fargo also offers a series of online credit education videos.
- It's a good idea to check your credit history and correct any problems before applying.
Assets and available funds:
- Do you have enough funds for closing costs?
- You may use funds from a savings account, certificate of deposit (CD), investments, and retirement fund.
- In some cases, you may be able to use a gift from a relative, friend, employer, or not-for profit organization.
- In many cases you will also have to demonstrate 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?
- We will order a property appraisal to make sure your property’s value meets our underwriting requirements.
Responsible lending guidelines
We approve applications from borrowers whom we believe have the ability to repay a loan or line of credit according to its terms. We use two ratio-based guidelines to evaluate a borrower's ability to repay.
Even if you fall within the 28%/36% rules of thumb, make certain that you feel comfortable making your monthly mortgage, insurance and tax payments and the payments on all your other monthly obligations. Homes have other costs — such as utilities, maintenance and repairs — that may not exist if you rent.
If you are facing payment challenges, don’t wait another day. We’re here to help you understand your options.
|If you’re struggling to make your monthly payments, or think you may have difficulty making payments in the future, find out about possible options that may allow you to keep your home in our Help for Homeowners section.||The Wells Fargo Home Equity Assist
program was created to help home equity
customers through difficult times. If you're
having financial difficulties, you may be eligible
for a reduced monthly payment or gain more
time to repay your loan.|
For your mortgage needs:
For your home equity needs:
Closing cost options
Most home equity financing offers two options:
Have us pay your closing costs
Have us pay your closing costs
- You pay a higher interest rate to cover all required third party costs
- This option is not available for lot loans or financing greater than $500,000
Pay your closing costs
- You pay a lower interest rate
- Pay with your loan proceeds, line of credit, or a check
For details, please call 1-888-421-4672.
If you are a servicemember on active duty, prior to seeking a refinance of your existing mortgage loan, please consult with your legal advisor regarding the loss of any benefits you are entitled to under the Servicemembers Civil Relief Act or applicable state law.