Wells Fargo is one of the largest mortgage lending institutions in the U.S. The bank backs that distinction up with many different mortgage options that vary in term-length, style and size. This breadth provides a high level of customization to make choices based on your specific profile. That’s often lacking when it comes to other lenders and provides a leg up for Wells Fargo.
But taking a mortgage with Wells Fargo isn’t all great. In fact, its interest rates and annual percentage rates (APRs) are slightly higher than a sizable portion of its direct competition. This is partially an indication that Wells Fargo’s extra costs are higher too, as the APR includes fees and other expenses that the interest rate does not.
|30-Year Fixed-Rate||4.733%||0.5||Compare Rates|
|30-Year Fixed-Rate Jumbo||4.708%||-||Compare Rates|
|15-Year Fixed-Rate||4.178%||0.375||Compare Rates|
|5/1 ARM||4.35%||-||Compare Rates|
Aside from the jumbo offer above, these Wells Fargo mortgage rates assume a down payment of 20% and a loan size of $175,000. On the other hand, the jumbo mortgage requires your loan to be larger than $453,100 (for single-family homes).
Overview of Wells Fargo Mortgages
As a general rule, the longer the loan, the higher the interest rate -- and by extension, the higher the APR. Wells Fargo’s main mortgage offerings are its 30-, 20- and 15-year fixed rate loans. These are very typical in length, though some lenders will forgo a 20-year option, which is again a testament to Wells Fargo’s substantial set of selections.
When it comes to these fixed-rate mortgages, you’ll pay a set amount toward your loan for a specific amount of time. However, you will need to have prepared some sort of down payment on the home and mortgage, a number that Wells Fargo seems to prefer around 25% of the value of the home, which is slightly higher than the typical 20% most lenders adhere to. The bank does offer a cheaper option: yourFirst Mortgage®. This program calls for a down payment of just 3% of the home’s value and is also at a fixed rate.
An “ARM,” or adjustable-rate mortgage, is different from its fixed-rate counterpart in that your interest rate and APR will vary throughout the loan’s life. In essence, these are meant to shrink your payments during the initial payment period, which, in the case of Wells Fargo, is either five or seven years. Following this, your interest rate will alter depending on the specified interest index the lender uses. Wells Fargo adheres to its own proprietary index called the Wells Fargo Cost of Savings Index (Wells COSI), which currently stands at 0.34%.
Jumbo mortgages are essentially the same as normal mortgages, only they’re for larger amounts of money. As far as Wells Fargo goes, the rates for fixed-rate jumbo mortgages aren’t necessarily that different from conventional mortgage rates, though you’ll likely need a much more substantial down payment.
What Your Monthly Mortgage Payments Could Be With Wells Fargo
Aside from the interest rate and APR of your prospective Wells Fargo mortgage, one major factor will determine what your monthly payment situation will look like: your home’s value. Based on this total, Wells Fargo can determine your down payment and loan amount. How much you’re willing and able to pay up front is mostly up to you. For these purposes, though, Wells Fargo assumes you will put down one-quarter of your home’s value. Whatever’s leftover, as far your home’s value goes, will be left to the mortgage.
Being that there are so many variables in reference to your personal financial situation, Wells Fargo has outlined information that can give you an idea as to what you’re likely to pay each month over the life of a few of their different mortgages.
|Mortgage||Interest Rate||Loan Size||Your Payments|
|30-Year Fixed||4.733%||$175,000||$911/month for 30 years|
|30-Year Fixed Jumbo||4.708%||$500,000||$2,596/month for 30 years|
|15-Year Fixed||4.178%||$175,000||$1,310/month for 15 years|
|5/1 ARM||4.35%||$175,000||$871/month for 5 years; $1,343/month for 25 years|
How Wells Fargo Compares to Other Lenders
As you’ll find in the table below, the APRs and interest rates that Wells Fargo offers are generally higher than most other lenders. This is especially visible when comparing the bank against Bank of America and Quicken, although Chase is a bit more in line with Wells Fargo’s rates.
Chase and Bank of America are similar institutions, but Quicken Loans couldn’t be more different. Wells Fargo is rather traditional in its mortgage setup, while Rocket Mortgage is completely online and mobile-based.
|Mortgage||Wells Fargo||Quicken||Bank of America||Chase|
|30-Year Fixed Jumbo||4.708%||-||4.291%||4.625%|
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Refinancing Rates With Wells Fargo
Refinancing a mortgage can be done for a number of purposes, including lowering your monthly mortgage payments or shortening the length of your loan's term. However, in order to avoid paying for private mortgage insurance, prospective refinance customers must hold no less than 20% of their home's equity. That makes the process of refinancing a bit more complicated for some, but the benefits you can reap if you qualify for one are transformative.
While there is no defined formula that determines what a lender’s refinancing loan interest rates will be for your personal situation, they take into account the same areas of focus as any other loan. More specifically, your credit score, loan-to-value (LTV) ratio, mortgage point total, current level of equity, loan amount and whether the home is a primary residence or not will all factor into what you are offered.
Should You Get a Mortgage from Wells Fargo?
Wells Fargo should have enough mortgage options available to satisfy just about any possible client. This is clear not only from the many different types of mortgages it includes in its portfolio, but also from the terms for which they’re offered.
For anyone who’s inexperienced when it comes to mortgages and loans in general, Wells Fargo presents an opportunity to work face-to-face with an actual human employee. So if you fall into this group, you might want to accept the slightly higher interest rates and APR Wells Fargo has. It may be worthwhile to have someone walk you through the mortgage process.
Tips for Adding a Mortgage To Your Life
- Before you apply for a mortgage, it might be wise to do a complete review of all your monthly costs. This will give you a better look into how well these new payments will fit into your your overall finances.
- If you want additional guidance, use the SmartAsset financial advisor matching tool to get paired with a financial expert who can assist you with the complicated process of securing a mortgage. Simply answer some questions relating to your financial needs, and up to three advisors in this area will be matched with you.