Wells Fargo Home Equity Loan December 2024

Does Wells Fargo Offer Home Equity Loans or HELOCs?

At the time of this writing, Wells Fargo’s website says: “Due to current market conditions, we are temporarily suspending new applications for home equity lines of credit.” 

But that move, implemented on April 30, 2021, was announced as part of the bank’s response to the COVID-19 pandemic and the economic uncertainties it created. So, home equity lines of credit (HELOCs) may be available again soon. We will update this page as soon as that happens.

Several other big-name banks also suspended their HELOC and home equity loans at that time. So, if you want a home equity loan or HELOC, you may have to hunt down a bank or mortgage lender that still offers them.

Who is Wells Fargo?

Wells Fargo celebrated its 170th birthday on March 18, 2022. For most of that time, it’s been a household name and enjoyed a solid reputation. However, in the 21st century, it seemed to lose its way, wracking up several scandals and $3 billion in fines. 

Should you be wary of becoming a Wells Fargo customer? The bank has implemented several changes to address its earlier issues, and it’s likely under considerable scrutiny by regulators. Is that now more trustworthy than banks that haven’t endured such scandals?

Other Wells Fargo loans that might suit you

Wells Fargo urges you to, “Please consider one of the borrowing options below.” And it goes on to suggest a cash-out refinance or a personal loan as alternatives.

Either product might suit you. But they’re both very different from home equity products.

Cash-out refinance

A cash-out refinance will likely have the lowest interest rate of all your borrowing options. And, because you’re probably going to spread your payments over a longer period (usually 30 years), your payment will likely be low as well. 

That sounds great. But your closing costs could be much higher than those of a home equity product. That’s because cash-out refinancing adds .375% to 3.125% to your closing costs (between $375 and $3,125 for every $100,000 financed). And that surcharge is based on the entire amount you borrow, not just the cash out. So if you only wanted $20,000 cash, and you add that to a $200,000 loan, it could cost you as much as $6,250 to borrow $20,000. Plus the interest you’ll pay. 

A cash-out refinance probably makes sense if all of these statements are true:

• You can refinance to a lower rate than you’re currently paying
• Your credit score is high, so the surcharge is low
• You need a relatively large amount of cash

If the borrower in the example above has a 760 FICO score and wants to borrow $100,000 in cash, he or she might pay $1,125 to borrow $100,000 at a very low interest rate, and that’s probably worth doing.

Personal loans

Some lenders offer excellent interest rates on personal loans. Indeed, a few have rates that are comparable with home equity products. 

But such rates are reserved for the most prime of prime borrowers. You need a truly glittering credit score and an exceptionally secure financial situation to qualify for the best personal loan interest rates. You may do better by shopping for a secured personal loan. 

Most mere mortals were paying appreciably higher rates, ranging from around 6% to 20% or higher, depending on creditworthiness, in January 2022. 

Wells Fargo Home Equity Loan

Wells Fargo discontinued its home equity loans back in 2019. It did not call the change a suspension at the time, as it did with its HELOCs. This probably means that Wells has no current plans to reinstate them. 

However, bankers rarely say never. We will update this page if Wells has a change of heart.

Wells Fargo HELOC

Before Wells Fargo suspended its HELOC offerings, its website gave some product details. This information may not apply when it eventually reinstates the program. But it may help you gauge how competitive the bank’s offering was back then. 

Here are the main highlights:

With a 20-year HELOC, you’ll have a draw period of 10 years, one month. After that, you can’t borrow anymore and have to zero your balance by the end of year 20

• You’ll need to retain a combined loan-to-value ratio of 70% of your home’s appraised value
• Annual percentage rates were competitive – 3.025% to 7.5%  for a $25,000 to $500,000 HELOC
• Variable-rate caps – “Your variable rate won't increase more than 2% per year based on your anniversary date and will never be more than 7% higher than where you started”
• Fixed-rate options for individual withdrawals – Subject to conditions
• Relationship discounts – For those with other Wells Fargo accounts

So Wells Fargo’s last HELOCs looked pretty good. Let’s hope any reinstated one is as attractive.

How to Apply for Wells Fargo Home Equity Loans

Right now, you can’t apply for any home equity products with Wells Fargo.

If you’d like to take up its suggestion that you apply for a cash-out refinance, you can expect a slick online experience. Or, if you prefer face-to-face dealings, you can call a number to be put in touch with a mortgage consultant who’s local to you. Either way, you’re applying for a new mortgage, so expect to have to upload or hand over a pile of documents.

You’ll likely need fewer documents if you prefer the bank’s other suggestion of a personal loan. However, the website says, “We only accept phone or online applications for a personal loan from customers who have an existing account with us.”

So, if you’re not an existing customer, you’ll have to apply in one of Wells Fargo’s branches or open an account first. Luckily, it has more than 7,200 locations.

Wells Fargo Expert and Consumer Ratings

We polled nine different websites that had star ratings for Wells Fargo. Those ranged from the Better Business Bureau to Trustpilot and included customer scores and expert reviewers’ opinions. 

Wells Fargo’s average star rating across those sources was 2.78 out of 5. 

That’s far from bad. But it’s not impressive. 

And it reflects its ranking in the J.D. Power 2021 U.S. Primary Mortgage Origination Satisfaction StudySM, in which it scored a solid but unremarkable 832, just a little below the industry average of 851.

Expert reviewers tend to rank the bank substantially higher than its customers do. And customers rarely go online to say how happy they are with any supplier. They’re more likely to post something only if they’ve had a bad experience.

And, with Wells Fargo serving one in three households in the United States, it’s bound to upset a fair number of those millions of customers. All banks do.

Wells Fargo Home Pros

There are plenty of things to like about Wells Fargo. And many comment on its:

Huge branch network

• Broad product range
• Willingness to be upfront about the rates it charges
• Consideration of non-traditional credit (rent, utilities, etc.) when processing mortgage applications

These can be genuinely valuable for some customers.

Wells Fargo Cons

Of course, the bank’s far from perfect. And reviewers often mention:

• Its current lack of home equity products – that’s big in a review of its home equity loans
• The scandals that have tarnished its reputation
• Negative online comments from customers

Only you can decide how important those are to you.

Home Equity Alternatives to Wells Fargo

So, what do you think? If you want a home equity loan or a HELOC, Wells Fargo can’t help you unless and until it reinstates one or both of those products. Or maybe the bank’s scandals have put you off. 

Not to worry. There are plenty of other lenders offering home equity loans and HELOCs. You’ll find some below.

And, even if you’re a big fan of Wells Fargo and it makes HELOCs available soon, you shouldn’t automatically choose its product. Because, whichever lender you like, you simply must get rate quotes from several. 

Rates for these second mortgages move up and down all the time. And lenders become more or less competitive almost as often. 

So always do a comparison shopping exercise. Depending on the size of your loan, that could save you thousands of dollars.