Wells Fargo Mortgages: Full Service, Troubled Reputation

Wells Fargo Mortgages: Full Service, Troubled Reputation

Wells Fargo is the largest mortgage lender in the US, but the recent revelation of systemic abuses threatens its credibility with borrowers.

Good for

  • Major bank with nationwide branch network and servicing options
  • Comprehensive set of mortgage loan products

Bad for

  • Major recent scandal around improper loan modifications
  • Average interest rates and closing costs

Editor's Rating

3.0/5.0

Wells Fargo is one of the nation's largest mortgage originators, providing a range of home loans for purchasing and refinancing. In addition to conventional home purchase mortgages, Wells Fargo offers home equity financing, government-backed mortgages and a first-time homebuyer program. Although Wells Fargo's website shares more information about its mortgages than most other lenders, its mortgage division was recently accused of modifying thousands of loans without informing customers.

Wells Fargo Mortgage Review

While Wells Fargo received harsh criticism for its abuse of customer trust in the fake deposit account scandal of 2016, its highly-regarded mortgage business remained safe from blame until recently. In June 2017, consumers began suing the bank for modifying their mortgages without properly informing them. While these "stealth" modifications often reduced the monthly payment for struggling borrowers, they did so by extending the term of the loans—which also increased the total lifetime interest by as much as three times the original cost.

But up until the revelation of these practices, Wells Fargo earned a higher satisfaction rating than most other mortgage providers and registered fewer CFPB complaints per origination. The bank also logged a higher rate of dispute-free resolutions, indicating that it did a faster and better job of solving customer complaints. This combination of damaged trust and stable everyday service is difficult to judge, but we recommend that you take a long look at your many other lender options before settling with Wells Fargo for your mortgage.

How Do Wells Fargo's Mortgage Rates and Fees Compare?

Using Wells Fargo's rate and payment calculator, we found price estimates for a variety of consumer profiles and loan types. Wells Fargo's online interface allows you to enter information for the important variables that affect loan cost, including location, credit score, loan amount, down payment and home value. Like most other banks, Wells Fargo's tools won't allow you to adjust more detailed variables like income, assets and debt-to-income ratio.

To receive a more accurate mortgage projection, you'll have to contact the bank directly and request an official Loan Estimate. You can also enter your loan amount and zip code below to find current mortgage rates at other lenders in your area.

See Mortgage Rate Quotes for Your Home

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30 Year Fixed-Rate

For the 30 year fixed-rate mortgage, we used three consumer profiles to see how the projected costs of a Wells Fargo mortgage vary between consumer and loan type. We tested the cost for borrowers with two credit score ranges for the same location, home value and down payment. For the third profile, we changed the home value and used a credit score range of 760 and above. We found that relative costs were higher for the profiles with worse credit and larger loan amounts.

Profile #1: Consumer with 700 - 759 Credit Score, Home Value of $198,000 and 10% Down Payment
For the first consumer profile, Wells Fargo estimated interest rates and APRs close to the national average. Due to their mortgage insurance requirements, the government-backed FHA loans turned out to be the most expensive option.

ConventionalFHAVA
Interest Rate4.125%4.500%3.750%
APR4.364%5.260%3.871%
Closing Costs$5,821$10,006$7,097
Monthly Payment$925$1,037$835
Monthly Mortgage Insurance Premium$61$118$0
Upfront Mortgage Insurance$0$3,119$0

Profile #2: Consumer with 621 to 699 Credit Score, Home Value of $198,000 and 10% Down Payment
Lowering the credit score in the second profile resulted in higher interest rates and APRs. This credit score range includes the average FICO score of 695, making these rates and fees the closest to what an average consumer can expect at Wells Fargo.

ConventionalFHAVA
Interest Rate4.250%5.000%3.875%
APR4.693%5.785%3.996%
Closing Costs$6,498$10,307$7,701
Monthly Payment$985$1,091$848
Monthly Mortgage Insurance Premium$108$118$0
Upfront Mortgage Insurance$0$3,119$0

Profile #3: Consumer with 760 or Above Credit Score, Home Value of $400,000 and 20% Down Payment
The high credit score and 20% down payment in this profile made it unnecessary to consider an FHA loan, which allows lower down payments at the cost of added mortgage insurance. Any homebuyer who makes a 20% down payment or greater is not required to pay mortgage insurance.

ConventionalVA
Interest Rate4.125%3.625%
APR4.155%3.739%
Closing Costs$9,371$13,139
Monthly Payment$1,551$1,478
Monthly Mortgage Insurance Premium$0$0
Upfront Mortgage Insurance$0$0

Customer Service Ratings

As mentioned above, a major drawback of Wells Fargo's is a history of mortgage lending practices which put consumers at a disadvantage. However, we found that Wells Fargo actually receives fewer complaints per mortgage origination than either of its two main competitors in Chase and Bank of America. Wells Fargo did fall behind Chase and direct lender Quicken Loans when it came to customer satisfaction as measured by JD Power.

Mortgage-Related Complaints at Major Banks, 2013-2017

CompanyMortgage OriginationsCFPB ComplaintsRatio2017 JD Power Rating
Wells Fargo2,155,22225,1821.17%745
Bank of America1,172,11328,1872.40%767
Chase948,00014,7781.56%764

Of the complaints filed with the Consumer Financial Protection Bureau (CFPB) since 2011, over 75% that are mortgage related were resolved by Wells Fargo without a consumer dispute, and over 99% received a timely response from the company. However, over half of the complaints were related to loan modification, collection or foreclosure —issues that have tarnished Wells Fargo's reputation in the past.

The number of mortgage complaints filed with the CFPB has dropped from highs in 2012 and 2013, signaling that Wells Fargo's customer service has improved over the years. Additionally, the bank has managed to resolve a greater percentage of complaints without further dispute, from 73% in 2012 to over 80% by 2016. Accordingly, the 2017 J.D. Power Customer Satisfaction Survey noted that Wells Fargo posted the most significant year-over-year gain in customer satisfaction.

Mortgage Loan Products at Wells Fargo

Information about all of Wells Fargo's mortgage products is readily available on their website. It offers a variety of products that cover buying, mortgage refinancing and home equity financing. For first-time home buyers, Wells Fargo also provides yourFirst Mortgage, a loan program that allows a down payment as low as 3%.

Available mortgages:

  • 15 and 30 year fixed-rate mortgages
  • 5 and 7 year adjustable rate mortgages
  • Conventional, FHA and VA loans
  • Jumbo loans: 7 and 10 year adjustable rate and 15 and 30 year fixed-rate
ProductInterest RateAPR
30 Year Fixed-Rate4.250%4.298%
30 Year Fixed-Rate FHA4.625%5.679%
30 Year Fixed-Rate VA4.000%4.290%
15 Year Fixed-Rate3.625%3.690%
7/1 ARM3.875%3.998%
5/1 ARM3.750%3.968%
30 Year Fixed-Rate Jumbo4.250%4.256%
15 Year Fixed-Rate Jumbo4.000%4.027%
7/1 ARM Jumbo3.625%3.829%
10/1 ARM Jumbo4.000%4.006%

Rates from Wells Fargo as of July 7, 2017.

Wells Fargo's website provides a payment calculator and financial breakdown of the 30 year fixed-rate loan, the most popular purchase mortgage. To find out what a typical mortgage with Wells Fargo might cost, we used the American median household income, median single-family home price and a 10% down payment on a 30 year fixed-rate loan of $178,200.

Interest Rate4.125%
APR4.364%
Rate Lock Period60 days
Closing Costs$5,821
Monthly Payment$925
Monthly Mortgage Insurance Premium$61

With the profile we used as an input, this breakdown is fairly standard and closely mirrors the interest rate, APR, rate lock and monthly payment projections given by competitor websites like Bank of America and Chase. While Wells Fargo's closing cost estimate is on the low side, their predicted monthly payment gives an APR that is close to what is paid by the average mortgage borrower. The closing cost breakdown also included less information about individual costs than competitor calculators, which could explain the low estimate.

By changing the inputs on their payment calculator, we observed that Wells Fargo provides full details for only the loans for which the input profile might qualify. For example, certain borrowers might qualify for the 30 year fixed-rate version, but not the 15 year fixed-rate or 5/1 ARM, depending on their loan amount or credit score. We also observed that lowering the profile's credit score will raise the projected interest rate. The lowest allowed credit score that their website advertises is 620.

Like their competitors, Wells Fargo has a disclosure on the payment breakdown page that explains how the figures listed are only projections, and are not guaranteed to match the input. To get more information about Wells Fargo's mortgage products or your eligibility, you'll need to input your contact information on their website, including name, email, address and home zip code, after which a mortgage consultant will reach out to you.

Where Can You Get a Mortgage With Wells Fargo?

Wells Fargo has the most bank branches in the United States, beating out both Chase and Bank of America. However, bigger doesn't necessarily mean better. In the case of applying for a mortgage, a local bank or credit union will likely show more attention to your specific case, and an online lender will definitely get you a quote and a pre-approval quicker. On the other hand, a large bank like Wells Fargo might be a good solution for those who don't have access to local banks or credit unions, or who prefer in-person interaction to filling out online forms.

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Overall, Wells Fargo remains a top mortgage lender for consumers seeking to buy a home or refinance. In the future, it's likely that Wells Fargo's customer service will continue to approve, as government and the media puts increased scrutiny on their consumer treatment and lending practices.

How Does Wells Fargo Compare to Today's Mortgage Rates?

If you're interested to see how Wells Fargo compares to different lenders, use the table below to explore today's mortgage rates.

LenderAPRMonthly PaymentLoan Fees
Homestead Funding Corp4.766%$834.64$295.00Inquire Now
First Internet Bank of Indiana5.049%$858.91$880.00Inquire Now
Ally Bank5.131%$871.18$115.00Inquire Now
Flagstar Bank5.171%$871.18$822.00Inquire Now
Citibank, N. A.5.179%$858.91$3,207.00Inquire Now

Rates assume a home purchase of $200,000 in New York with a 20% down payment and credit score of 740. Estimates include origination fees and points but don't include other closing costs.

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