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 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, someone needing a HELOC, and people who qualify for government-backed loans.

Top perks

Competitive rates

Wells Fargo 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 20% down payment.

Variety

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

• Fixed-rate conforming loans with terms of 30, 20, and 15 years
• 7/1 and 5/1 ARMs
• Jumbo loans with fixed or adjustable rates
• VA mortgages
• FHA loans
• USDA loans

The bank offers several different refinance loan structures as well as home equity lines of credit (HELOCs) with both variable- and fixed-rate options. Wells Fargo also helps facilitate financing for new construction homes and offers bundled purchase and renovation loans.

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, although unlike some competitors' products, private mortgage insurance (PMI) is still required with down payments below 20%.

Excellent educational tools

Wells Fargo'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 videos that offer explanations of down payments, determining your price range, the difference between pre-qualification and pre-approval, the mortgage process itself, and many more.

Fixed-rate HELOCs

Most banks that offer mortgages have HELOCs, but Wells Fargo Home Mortgage is a bit different. While the bank's HELOCs all start out as variable-rate credit lines (as is the industry standard), Wells Fargo offers borrowers the option to convert all or part of their balance into a fixed-rate advance with a set interest rate for a term of 1-20 years.

Low down payment options

In addition to the usual ways of buying a home with less than 5% down, such as USDA, FHA, and VA mortgages (all of which are offered), Wells Fargo also has a special first-time home buyer loan program. This is a conventional, fixed-rate mortgage that has a 3% down payment requirement. Unlike some of the other programs, like USDA loans, Wells Fargo's first-time buyer program has no maximum income limitation. To qualify, at least one of the borrowers on the loan must be a first-time home buyer.

Huge geographical presence

Wells Fargo has a massive branch network with more than 5,000 branches throughout the U.S., more than any of its competitors. 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 offers lots of flexibility when it comes to loan terms. It provides daily updated interest rates on its website for all of the above loan terms, 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 doesn't (aside from VA loans). 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 will increase your monthly cost significantly.

Mortgage products

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

The application process

Wells Fargo's mortgage 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.

Rocket Mortgage is the largest home lender in the U.S. Rocket Mortgage offers pretty much all of the same loan options as Wells Fargo, with the key difference being that the process is entirely online and much more streamlined. Rocket Mortgage receives top-notch rankings for customer service, so if you want the application process to be as easy as possible, Rocket Mortgage is worth a look.

Citi Mortgage might be a good fit if you're a low- or moderate-income home buyer without a large down payment. The Citi HomeRun loan program offers 3%-down-payment mortgages just like Wells Fargo's low down payment program, but with no mortgage insurance.

The first step in Wells Fargo's mortgage 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 yourLoanTracker portal.

Once the application and required paperwork are in, Wells Fargo 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'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's refinance rates are a little higher than the national average. But the difference is small and Wells Fargo charges less in mortgage discount points than many other lenders. Like many lenders, Wells Fargo charges a higher interest rate for refinance loans than for purchase loans.

Wells Fargo's mortgage rates trend higher than than the national average. Also, some lenders charge a little less for an FHA loan, but Wells Fargo does not. On the plus side, Wells Fargo's lowest advertised rate assumes the borrower will pay just 0.5 mortgage discount points. 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.
• You want a HELOC, but don't want to take on variable-rate debt.