Pros: helpful consultants; lowest competetive rates; 0 points; lowest closing costs
Cons: Hope I won't be in for surprises when all of this is done-to be continued..
I am writing this opinion on Wells Fargo Home Mortgage. I am directing this towards people like myself: first time home buyers who are in the process of shopping around for a mortgage. I hope that I can educate you on what I have learned in a very short time, but what could make the difference in thousands of dollars over the long run.
After meeting with our lawyer, it was time to begin the process of finding a mortgage for our newly purchased home. I heard mortgage lender, mortgage broker, mortgage bank! As a result of my research, I can tell you that it is the mortgage bank that you would like to do business with. Mortgage lenders and brokers are the middlemen between you and the bank. This might be appropriate for you if you are having difficulty obtaining a loan from a bank on your own. But I highly recommend dealing with a mortgage bank first. Wells Fargo is number one on my list.
The mortgage process is confusing enough, so I will break down why I have decided to get my mortgage from Wells Fargo Home Mortgage.
1. Consultant or Used Car Salesman?
My husband insists that the mortgage "consultants" are trained on how to deal with a customer. It seems they come across as your best buddy. They insert personal bits of information in their conversations with you. Perhaps they think this will cause you to trust them. They will explain why their company is the best and how they are the only company not trying to cheat you... and if anyone else can do better than them--they are lying.
When I met with the Wells Fargo consultant I immediately was pleasantly surprised by his approach. He was straight forward. He did not overact. He had a low-key approach as opposed to a strong gimmicky one. Of course this will vary depending on which branch you use, however, my father also got his mortgage with Wells Fargo and experienced the same satisfaction with his consultant.
I found that when I contacted my consultant, Dennis, he returned my calls immediately. Well, that is not too much of a surprise, considering these people work on commission. (That?s why you?ve got to be careful--they?ll promise you the world!)
But throughout the entire process, before even applying for the mortgage, he returned calls, met with us immediately, and met with us before ever signing any papers. We felt he educated us thoroughly and was happy to do so. Again, calm and steady was the approach. I do hope this is consistent throughout the Wells Fargo Company.
3. Two loans
O.k., here is the technical talk which I will keep simple. PMI is a very expensive monthly payment that is attached to your mortgage if you are unable to put down 20% or more toward the house. So, there is no way I am able to do that.
The PMI will be paid each month, until you meet that 20%. It could take several years. That is a lot of money! Also, if your mortgage is over $300,700 in New York, you will pay a higher rate called a "jumbo Mortgage". We wanted to avoid this higher rate as well.
The solution is to take out 2 mortgages. You will pay a higher rate on the smaller mortgage, but in the end, you will not pay PMI (would have been $200 per month for me) and you will avoid the jumbo mortgage rate ( a difference of about 1/4 point.) Wells Fargo will allow you to do this without forcing you to pay extraordinary closing fees. While you might find a mortgage lender or broker who will allow you to take out the two mortgages, you will find their closing fees can be as high as $5000 more than Wells Fargo.
Speaking of closing fees, Wells Fargo offered the lowest closing fees of the five banks/brokers I spoke with. Ask your broker/bank about the following costs, because they might just conveniently leave certain fees out when giving you your closing totals:
Bank attorney (varies tremendously)
Tax service fee
Tax service fee
Most of all: Rates
The rates offered by your bank or lender will dictate how much money you will be paying for a VERY long time and can make a huge difference in the long-run. A variable rate can change during the duration of your loan for the better or worse, depending on when rates are increased or decreased.
A fixed rate is yours to keep! Wells Fargo offered me the lowest rates with zero points. (Points can be purchased at 1% of your loan to lower interest rates). Paying points for the lower rates is more money you have to have available. Wells Fargo offers low rates without making you pay for them through points. I was very impressed with their low rates.
Again, all of the information can be pretty scary and overwhelming. I hope I can offer you some peace of mind by highly recommending you find the Wells Fargo Home Mortgage Co. in your area. They work directly with the bank so you are not paying middleman fees. Their rates were the best I was offered by anyone. Their closing fees are the lowest offered by all of those I checked with. They allow you to take out two mortgages to avoid costly PMI insurance. I hope this information can be helpful to you.