Wells Fargo Mortgage Review: A Great All-Around Lender

Wells Fargo is primarily known for being one of the largest banks in the United States, and it also has one of the largest mortgage lending operations. The company offers a variety of purchase and refinancing mortgage products to suit a wide spectrum of borrowers, and also offers an excellent library of educational tools to help prospective customers learn about the mortgage process.

In this Wells Fargo Mortgage review, we'll dig into the bank's offerings, the pros and cons of using them for your mortgage needs, and whether Wells Fargo Mortgage could be the best choice for you.

This lender is a good fit for: Low-income borrowers who need flexible credit requirements, borrowers who want to work with a lender in person, and people who qualify for government-backed loans.

Top perks

Competitive rates

Wells Fargo Mortgage publishes a list of its current mortgage rates, updated daily. These rates are highly competitive with those offered by other lenders, especially for borrowers with strong credit. Note that the rates listed on the website generally assume a top-tier FICO® Score (740 or above) as well as a 25% down payment.

Variety

As one of the largest mortgage lenders in the U.S., Wells Fargo Mortgage offers many different options. For purchases, the bank offers:

• Fixed-rate conforming loans with customizable terms
• 7/6 and 5/61 ARMs
• Jumbo loans with fixed or adjustable rates
• VA mortgages
• FHA loans

The bank offers several different refinance loans. Wells Fargo Mortgage also helps facilitate financing for new construction homes.The Dream. Plan. Home.℠ mortgage offers flexible underwriting (lower credit score) guidelines to borrowers who earn no more than 80% of the area median income where they live. Private mortgage insurance (PMI) is still required with down payments below 20%.

Excellent educational tools

Wells Fargo Mortgage's website has a ton of educational articles and videos that can help guide you through the mortgage process. Don't understand the difference between interest rates and APRs? There's a quick, easy-to-understand video about it. There are also articles, calculators, and videos that offer explanations of down payments, determining your price range, the difference between prequalification and pre-approval, the mortgage process itself, and many more.

Low down payment options

In addition to the usual ways of buying a home with less than 5% down, such as FHA and VA mortgages (both of which are offered), Wells Fargo Mortgage also has a special first-time home buyer loan program. This is a conventional, fixed-rate mortgage that has a 3% down payment requirement. To qualify, you can't earn more than 80% of your area's median income.

This loan can be combined with home buyer assistance. Wells Fargo Mortgage offers up to $5,000 in closing cost assistance to eligible borrowers buying a home in certain counties. This benefit isn't available nationwide, but dozens of counties are included.

Huge geographical presence

Wells Fargo has a massive branch network with almost 5,000 branches throughout the U.S. And many of them have on-site mortgage consultants. If you prefer in-person help during the home-financing process, it's tough to find a lender with more of a branch presence than Wells Fargo.

Flexible loan terms

Wells Fargo Mortgage offers lots of flexibility for loan terms. It provides daily updated interest rates on its website, as well as APRs, which indicate the overall cost of borrowing including origination charges.

What could be improved

Down payment options without PMI

Many competitors offer low down payment mortgage options without private mortgage insurance (PMI), but Wells Fargo Mortgage doesn't (aside from VA loans, and those have a funding fee). The first-time home buyer product could still be an excellent way to get a conventional mortgage loan with a small down payment, but you'll have to pay PMI, which could increase your monthly cost significantly.

Mortgage products

To be fair, Wells Fargo Mortgage has quite a bit of variety. However, few of its mortgage products (with the possible exception of the first-time home buyer loan) are unique. Some competitors offer more creative options, such as interest-only loans, loans with no down payment and no PMI, and others.

The application process

Wells Fargo Mortgage's application process requires borrowers to connect with a home mortgage consultant and have several rounds of back and forth. While you don't necessarily need to have an in-person consultation, the application process isn't likely to be as quick and easy as it would be at some more tech-orientated competitors.

No home equity loans

If you want to borrow against your home equity, you'd have to take out a cash-out refinance loan, which replaces your current mortgage. If you're happy with your current mortgage and don't want to replace it, you might be better served by a lender that offers home equity loans.

The first step in Wells Fargo Mortgage's application process is to connect with a home mortgage consultant, which involves submitting a contact form on the bank's website with some of your information. Your consultant will walk you through the rest of the application process, and documents can typically be submitted through the bank's Wells Fargo Online® portal.

Once the application and required paperwork are in, Wells Fargo Mortgage will order a title search and appraisal, and then send your application to underwriting. The process is pretty standard, but it's not quite as streamlined and easy to navigate as it is at some of Wells Fargo Mortgage's rivals.

It's important to mention that even if a particular lender sounds like a great fit, fill out applications and get rate quotes from at least a few lenders. This is important to do when shopping for any type of loan, but is especially critical when looking for a mortgage.

Here's why. Although mortgage rates tend to be in the same ballpark, each lender has its own methodology for evaluating applicants, so it's common for the same borrower to get significantly different rates from different lenders. And a seemingly small difference in mortgage rates could mean thousands of dollars in savings over the term of a loan. As long as all of your applications occur within a two-week shopping window, multiple mortgage applications won't hurt your credit score, so there's no good reason not to take the time to shop around.

Wells Fargo Mortgage's refinance rates run a little lower than the national average, plus Wells Fargo Mortgage may charge less in mortgage discount points compared to other lenders. Like many lenders, Wells Fargo Mortgage charges a higher interest rate for refinance loans than for purchase loans.

Wells Fargo Mortgage's rates trend a little lower than than the national average. Wells Fargo Mortgage's lowest advertised rate assumes the borrower will pay up to 1.0 mortgage discount point. Other lenders advertise lower rates but charge more (sometimes a lot more). This is a great reason to compare offers carefully because sometimes what looks more costly really isn't.

• You are an existing Wells Fargo customer and want to keep all of your financial accounts in one place.
• You want to become a homeowner, but don't have a large down payment.
• You could use educational resources and guidance to help you navigate the mortgage process.
• You want to apply for your mortgage in person at a location close to you.