PROS / Wells Fargo offers construction loans with a rate-lock program.
CONS / The interest rates were higher than most of the mortgage lenders we reviewed.
VERDICT / Wells Fargo's interest rates were the highest of the top mortgage lenders we reviewed, but it offers excellent customer service. It's also one of the few banks to offer construction loans, making it a bank worth considering if you are building a home.
Wells Fargo Mortgage earns our Top Ten Reviews Bronze Award for its excellent customer service and numerous options for mortgages and refinancing. While we found the rates somewhat higher than those of other lenders on our lineup, the fees were competitive, and if you have a second home, this bank lets you refinance it.
Rates & Fees
We found Wells Fargo's rates were higher than the industry average, overall. Like most mortgage companies, you have the option of a fixed-rate or adjustable rate. Wells Fargo also offers some other features, such as a temporary buydown, which gives you some payment flexibility. You can find details on the website.
If you are looking for a construction loan, Wells Fargo offers some options, such as a rate-lock option that lets you set the interest rate while the home is being built. This protects you from rising interest rates while your home is under construction. But if rates decrease, Wells Fargo offers a one-time floatdown to the lower rate. Wells Fargo's online calculator provides rates and estimated down payments.
Because closing costs depend on fees beyond the bank's control, we looked only at bank fees like underwriting and processing that are paid as part of closing costs. The agents we spoke to said bank fees vary by state. Wells Fargo's fees fall at or below average for the mortgage lenders in the industry.
Eligibility & Requirements
Like most mortgage loan companies, Wells Fargo requires a five percent down payment, although it may allow a lower down payment for first-time homebuyers with excellent credit. It prefers to work with borrowers with average credit scores or higher but can make exceptions. Its preferred debt-to-income ratio is average for most banks. It was one of the few mortgage companies that mentioned a preferred cost-to-income ratio. This is the percentage of your monthly income that goes toward your mortgage.
If you have a second home, Wells Fargo allows you to refinance that mortgage. Not every mortgage refinance lender refinances a second home, so if you have a vacation house or rental, this is a good bank to consider.
Wells Fargo's customer service received our highest marks. The phone system quickly connects you to a loan officer. Every loan officer we spoke to answered our questions in detail, took time to explain things and gave us accurate information without the hard sell we experienced with other mortgage lenders. The online application process seemed similarly user friendly, with helpful checklists to make sure you had the information you needed as you filled out the application.
Wells Fargo has an excellent website for homebuyers wanting more information about what to expect. It contains an interactive guide, My FirstHome, that takes you through the process, from deciding whether or not to buy to maintaining your new property. The resources section contains articles, checklists and videos that cover all aspects of homeownership, not just the mortgage. The checklist section is similarly expansive.
Loan Types Offered
Wells Fargo offers conventional and government-program mortgage and home refinancing loans with fixed and adjustable rates. It also offers construction loans. Only a few of the banks we evaluated offer these loans, which are riskier for the bank, because the usual equity is the house itself. It also has some special loan programs, such as jumbo loans. While it does not offer home equity loans, it does have a home equity line of credit program.
Wells Fargo had the highest interest rates of the mortgage lenders we reviewed, but it also had the best marks for customer service. Its website offers excellent information on home buying and home ownership that make it worth visiting even if you don't get a loan from this institution. However, if you are building your home, its construction loan program makes it worth checking out.