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Reduce Your Interest Rate

Man standing in driveway looking at mobile phone

Trying to decide if you can benefit from reducing your interest rate?

We can help you learn about your options and decide if refinancing may be right for you

If you are looking to reduce your interest rate, you may want to consider refinancing. Learn about refinancing from the nation’s #1 home refinance lender.

What should I know about an interest rate refinance?


Refinancing can be effective if you consider your refinancing goals and select the option that may be right for you. Consider the following.

If your goal is to:

Reduce monthly payments

  • You can reduce your payment by refinancing when interest rates drop sufficiently below your existing rate.
  • As another option, you can refinance to a longer term mortgage to lower your monthly payment, though you will raise your overall interest costs.
  • With either option, you can pay discount points to further reduce your interest rate.
  • To learn more, see Lower Monthly Payments.

Repay your mortgage faster

  • Refinance to a shorter term to raise monthly payments for faster repayment and reduce your overall interest payments.
  • If interest rates are low enough, you may be able to get a shorter-term loan for faster repayment without a significant increase in your monthly payment.
  • To learn more, see Pay Off Mortgage Sooner.

Access home equity while lowering payments or repaying faster

  • A cash-out mortgage refinance can affect your mortgage interest rate and provide funds for home improvement, debt consolidation, and other major expenses.
  • To learn more, see Get Cash From Your Home.

Plan for an adjustable-rate mortgage (ARM) interest rate change

  • You can explore your options before your payment adjusts to see if refinancing may be right for you.
  • To learn more, see Convert to a Fixed Rate.

Access the available equity in your home without reapplying (if you qualify)

  • Combine a Wells Fargo first mortgage with a home equity line of credit so you can access your equity as you need it.
  • You complete only one application, work with a single contact, and attend one simultaneous closing transaction for both products.
  • You can choose from a variety of financing options.
  • Read more about Mortgage + Home Equity Financing.

What are the benefits of refinancing?

When interest rates are low, you might consider refinancing your mortgage. Refinancing may allow you to replace your current loan with a new mortgage that has better terms. Here are some of the potential benefits of a refinance.

Increased cash flow

  • Your loan’s monthly payment typically decreases with a lower interest rate.
  • With a lower payment, you can use the extra funds for retirement savings, paying other debts, saving money for college, or other purposes.

Potential to switch to a different loan type

  • If you have an adjustable-rate (ARM) or a balloon mortgage, reduced interest rates may make a fixed-rate mortgage more desirable, especially if you want the stability of an interest rate that does not change over time.
  • If you have a long time left on your mortgage, lower interest rates may make it possible to switch to a shorter-term mortgage.
    • You can pay the principal balance down and build equity faster.
    • You may pay less interest over the life of the loan with a shorter term loan.
  • If you have a jumbo loan, you may be able to refinance to a "blended jumbo" (Mortgage + Home Equity Financing). 

Opportunity to access the equity in your home

  • While you’re lowering your interest rate, you may want to consider using the equity in your home to pay for major purchases or to make home improvements. This type of loan is known as a cash-out refinance.
  • See how much available equity you have for a cash-out refinance with a free refinance analysis.

How can I decide if refinancing may be right for me?

Your home may be the largest asset you have. Before deciding to refinance, be sure to consider the following so you can make an informed decision.

Determine your estimated costs

When you refinance, you may pay:

  • An origination charge, which may include fees such as application or processing.
  • Discount points to lower your interest rate further. (May be tax deductible. Consult your tax advisor regarding deductibility).
  • A prepayment penalty if your current loan has a penalty for early payoff.
  • Other settlement charges such as appraisal, credit report, title search, and title insurance fees.

If you’re an existing Wells Fargo Home Mortgage customer, you may be eligible for a streamlined refinance with no closing costs, application, or appraisal fees.

Find out more about our streamlined refinance.

 Tip 

You may be eligible for a reduced reissue or refinance rate on your title insurance if the property’s current policy was issued recently. Ask your title or closing agent if you qualify.

Assess how much longer you’ll stay in the home
If you plan on owning the home for an extended period of time, and the interest rates are 1/2% to 5/8% lower than your current rate, refinancing may be the right choice for you.

Determine your break-even pointOver time, you may be able to break even on your refinance closing costs.
Your break-even point occurs when your savings from your new loan equals the cost of getting the new loan. 

Additional considerations
Keep in mind that you are starting over. Refinancing replaces your existing loan with a new one. If you refinance back to the same loan term on the new mortgage, you may pay more additional interest than you would save by lowering your monthly payment.

Use our refinance calculator to help determine if refinancing may be right for you.

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.

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 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 will you evaluate my home financing application?

When you apply for home financing, we generally use these four main criteria to assess your application.

Income

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.

It's a good idea to check your credit history and correct any problems before applying. Wells Fargo also offers a series of online credit education videos.

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.

The property

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 according to the terms of the financing. We use two ratio-based guidelines to evaluate your ability to repay.

Debt-to-income ratio

Debt-to-income ratio is the percentage of your monthly income that is spent on monthly debt payments.What is debt-to-income ratio? 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-expense-to-income ratio

Housing-to-income ratio is the percentage of your monthly income that is spent on monthly housing payments.

What is housing-to-income ratio? 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 to calculate your ratios

What can I do if I am having difficulty making payments?

If you’re facing payment challenges, don’t wait another day. We’re here to help you understand your options.

Mortgage options

Are you struggling to make your 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:

Home equity options

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 balance. Explore your options today:

  • Call 1-877-628-9584 for more information
    Monday – Friday: 8 am – 8 pm
    Saturday: 8 am – 5 pm
    Central Time
Request an appointment for a Home Equity Specialist to call when it’s convenient for you.
 

Explore your loan options

We can help you get started learning about different home loans. Below are a few options you may want to consider based on features that may be important to you. To see additional home loans, visit our Loans & Programs area.

Loan options to consider
Fixed payments
Lower payments starting out
Requires little equity to refinance
No private mortgage insurance
Higher loan amount

Fixed-rate mortgages
View details

Yes



Yes

Adjustable-rate mortgages
View details


Yes




Yes

FHA/VA loans
View details

Yes
Yes
Yes


Home Affordable Refinance Program (HARP)
View details

Yes
Yes
Yes


Mortgage + home equity financing
View details

Yes


Yes
Yes

Home equity line of credit with fixed-rate advance
View details

Yes





 Find the Right Loan for You 

Customize and compare rates, payments, and estimated closing costs.

Get started

 

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.

The mortgage application process

How do I apply for a mortgage?

Gather essential information

When you apply for a mortgage you’ll need to provide financial and property information to complete the application. This includes:

  • Income, asset, and expense information
  • Estimated purchase price and down payment (if buying)
  • Estimated property value and loan amount (if refinancing)

Review our homebuying application checklist (PDF)* or refinance application checklist (PDF)* to learn more. 

 Tip 

You'll need to provide documentation to support the information on your application later on in the process, so it's a good idea to start gathering the documents now.
 

Video - The loan application process

Video: The loan application process Watch this video to learn how your loan application moves through the process.

Remember, your home mortgage consultant will be there to support and guide you every step of the way.



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.
  • Find a local consultant and start the application process by phone or in person.
  • Request a personal consultation to have a home mortgage consultant contact you.

Once you apply, you’ll receive important disclosures about your loan. If your loan is eligible to be tracked through yourLoanTracker, you’ll receive a notification from your home mortgage consultant.

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.

Renovation mortgages

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 application process is very similar to the process for buying an existing home. However, on new construction loans, you also have the option of choosing our Builder Best® Extended Rate Lock program. 

Visit our Construction Lending Center for more information.

The home equity application process

How do I apply for home equity financing?

To apply for home equity financing, you must own a primary residence, investment property, or vacation home. If you don’t own property, please consider a personal loan or line of credit instead.

It's easy, fast, and secure to apply:

Gather essential information

Before you start, have the following information on hand:

  • Financial information. Income, asset, and expense information.
  • Property information. Estimate a realistic value of your home.
  • Funds needed. Carefully evaluate the line of credit amount you'll need.

 Tip 

You'll need to provide documentation to support the information on your application later on in the process, so it's a good idea to start gathering the documents now.
Review our home equity application checklist (PDF)* to learn more. 

Submit your application

It’s easy to get started. Choose to work with us whichever way is best for you:

  • Online. Fast, easy and secure and it will take about 10 minutes. Apply Online.
  • Over the phone. Speak with a home equity specialist at 1-888-667-1918.
  • In person. Find a Wells Fargo location near you.

Remember, if you have questions, our home equity specialists are ready to help. You can also track the status of your application 24 hours a day, 7 days a week with yourLoanTracker.

Do I need to pay a fee to submit my home equity application?

There is no fee to submit a home equity application. For closing cost fees, you can select the home equity closing cost option that meets your needs. If you’re a Wells Fargo customer, you may also benefit from additional discounts. 

What should I consider when applying for home equity financing?

  • Make sure your requested line of credit amount is between $10,000 and $500,000 (some state restrictions apply). For larger line amounts, please contact us.
  • Carefully evaluate how much you need. Your requested amount plus the existing mortgage balance and any other outstanding liens against your property should be less than 80% of your home’s current value.
  • Provide a conservative estimate of the value of your home.
  • Track the status of your application by signing up for yourLoanTracker.
  • Ask about special interest rate discounts for Wells Fargo customers.

 

After you apply for your mortgage or home equity line of credit, we’ll work with you to ensure that the process is a straightforward and satisfying experience.

After you apply for a mortgage

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 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 disclosures confirming the amount of money you’ll need, so you can arrange to have funds available for your closing.

At closing

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, you can manage 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, if you're notified that your loan is eligible, you can use yourLoanTracker to:

  • Receive disclosures
  • Provide financial documents
  • Check the progress of your application
  • Receive status updates throughout the process

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 on time:

  • Provide accurate information during your loan application interview. Discrepancies in your credit history, employment history, or current bank account balances could delay your loan process.
  • Help keep your application moving by submitting requested documents promptly. Learn more about documents we may request  in our document library.
  • Do not make big purchases, take on additional debt, transfer large amounts or make large deposits 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.

Renovation mortgages

  • 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 have additional rate lock options with our Builder Best® Extended Rate Lock program.
  • 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.

After you apply for home equity financing

What happens after my home equity application is submitted?

We’ll review your application and complete the following:

  • Let you know the status of your application within two business days.
  • Request additional information such as financial documentation and income verification.
  • Order appraisal, title insurance, flood certification, and other services as necessary.

You can also track the status of your application 24 hours a day, 7 days a week with yourLoanTracker.

How does the home equity closing process work?

Choose to close in a Wells Fargo bank store, or from the comfort of home by mail if available, or if eligible, through our virtual closing option (PDF)*.

  • To keep things moving, be  sure to sign and return all requested documents as soon as possible. 
  • If additional documents are requested, you can learn more about them in our document library.
  • Your home equity specialist can help you understand what may be required.
  • We'll activate your account after we receive your signed documents and your right-to-cancel period, if any, has expired.

You’ll be able to access your available credit with your Enhanced Access® Visa® credit card, access checks, Wells Fargo Online® banking, or your ATM card.

After you close, you can manage 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 home equity application status?

With yourLoanTracker you can:

  • Receive disclosures
  • Provide financial documents
  • Check the progress of your application
  • Receive status updates throughout the process

What can I do to help my home equity financing close on time?

  • Monitor yourLoanTracker to keep track of your progress.
  • Make sure you sign all relevant documents, get them notarized (as needed) and return them to us as soon as possible.

 

After your mortgage or home equity financing closes we provide a variety of ways to manage your account online. View account activity, transfer funds, make payments, and more — anytime, anywhere and at your convenience.


Manage Your Mortgage Account

Manage Your Home Equity Account

Manage Your Finances

 

Learn more about your options with a refinance analysis Get Started

Find a local consultant or call  1-877-937-9357

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.

Discount Points
Discount points are charges paid to the lender voluntarily, usually at closing by the borrower or seller, to reduce the interest rate. One point is equal to 1% of the principal amount of the mortgage.
Origination charge
One amount that includes all charges (other than discount points) that all loan originators (lenders and brokers) involved in the transaction will receive for originating the loan. This includes any application, processing, underwriting fees, and payments from the lender to the broker for origination.
Title insurance
An insurance policy that protects a lender or homebuyer (if the homebuyer purchases a separate policy, called owner's coverage) against any loss resulting from a title error or dispute. On a refinance, if the property has had a recent title insurance policy, a homeowner may sometimes be eligible for a reduced rate on the title insurance (also known as the reissue or refinance rate).

Closing cost options
Most home equity financing offers two options:

Have us pay your closing costs:

Pay your closing costs:

For details, please call 1-888-421-4672.

Appraised value

The home's estimated value — known as appraised value — is an important part of your financing. If you're purchasing, this value usually needs to be equal to or more than the home's purchase price. If refinancing, the appraised value helps to determine your maximum loan amount.

Conditions
Standard conditions include our receipt of homeowner's insurance policy, flood insurance if necessary, and an acceptable title insurance binder.
Closing agent
This is the person or company that coordinates the execution of your closing documents. May be called by different titles in different states. Some common terms are attorney, title company, settlement agent, escrow company, notary, among others.