Brent D. Miller
Home Mortgage Consultant
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Consolidate Your Debt

Interested in consolidating your debts?

If you're a homeowner, you may be able to use your home equity for debt consolidation.

Are you a homeowner exploring options to consolidate your debt? Your home is one of your largest assets. Learn more about using the equity in your home to consolidate your higher interest rate loans or credit card balances.

What should I consider before I consolidate debt?Show Details

Before you take steps to consolidate your debt, you may want to consider the following:

One loan replaces many loans
  • Consolidating debt into a single loan doesn't eliminate your debt; it transfers your loan balances into one loan.

Think twice about using your credit cards
  • Consider reducing your credit limits or closing accounts. Once your balances have been consolidated into a single loan, your credit card balances will be back to zero. If you do not use discretion with your spending, you may find yourself in even more debt.

Improve your credit
  • You may benefit from the information and tips available from our Smarter Credit center.

Look into your credit options
  • Offers lower interest rates than many other forms of consumer credit.
  • Mortgage loans have longer payback periods than other types of loans. The longer loan term means you are paying back significantly more interest over the life of the loan.

  • Consider this option if you do not own your home or do not want to use home as collateral or if you want to pay off your debt quickly.

  • If you have more than one private student loan — from Wells Fargo or other lenders — you may be able to combine them into one loan with one monthly payment.

What financing basics should I understand? Show Details

If you obtain a loan to help you consolidate debt you will repay more than you borrowed. In addition to your interest rate, term and loan amount, how much you repay is determined by several factors. Here are the components you need to know:
Interest rate
  • The interest rate is the percentage of your loan amount we charge you to borrow money.
  • Interest rates are based on current market conditions, your credit score, down payment, and the type of mortgage you choose.

Discount points
  • One point equals 1% of your loan amount.
  • If you qualify, you may be able to pay one or more points to lower your interest rate. A lower interest rate means lower monthly loan payments.
  • You may be able to finance points as part of your loan amount.
  • Points are usually tax deductible. (Consult a tax advisor on the deductibility of discount points).

Origination charge
  • The amount that includes all charges (other than discount points) that all loan originators (lenders and brokers) involved will receive for originating the loan.
  • This charge covers items including fees, document preparation, and underwriting costs, and other expenses.
  • If you qualify, you may be able to finance the origination charge as part of your loan amount.

Loan term
  • Your loan term is the amount of time you have to pay off your loan balance.
  • Shorter loan terms typically mean higher monthly loan payments, but often have lower interest rates. And if you pay off your loan balance within a shorter term, you may pay less in total interest than with a longer-term mortgage.

Remember that interest rates only tell part of the story. The total cost of a loan is reflected by the interest rate, discount points, and origination charges. This total cost is known as the annual percentage rate (APR), which is typically higher than the interest rate. The APR enables you to compare mortgages of the same dollar amount by considering their total annual cost.
Depending upon your loan type, property location, property type and loan amount, you may incur other monthly or annual expenses such as mortgage insurance, flood insurance, and homeowners association fees.

What should I know about consolidating debt?Show Details

Wells Fargo's home equity options are available with no application fees and a choice of closing cost options, and have competitive rates and potential tax advantages. (Consult your tax advisor on the deductibility of interest.)
To get started
  1. List the type of debt you want to consolidate, such as credit cards, car payments, personal loans, and revolving charge accounts. For each account, have these ready:

    • Account balance
    • Interest rate
    • Minimum monthly payment
    • Time remaining until debt is paid in full

  2. To determine your interest rate and payment with the new consolidated loan, contact your mortgage consultant.

What criteria are used to assess my application?Show Details

When your application is complete, we review the following four components:
  • Do you have a reliable, continuing source of income to make monthly payments?
  • Income can come from primary, second, and part-time jobs, as well as overtime, bonuses, and commissions.
  • You may use other sources of income if you want them considered for payment — including retirement or veteran's benefits, disability payments, alimony, child support, and rental or investment income — provided they can be verified as stable, reliable, and likely to continue for at least three years.

Learn more about establishing and improving your credit
Current debts and credit history:
  • Do you pay your bills, loans, credit cards, and other debts on time?
  • We examine your payment habits before deciding to loan you money.
  • Your credit history and credit score are also examined prior to deciding to loan you money.
  • It's a good idea to check your credit history and correct any problems before applying.

Assets and available funds:
  • Do you have enough funds for closing costs?
  • You may use funds from a savings account, certificate of deposit (CD), investments, and retirement fund.
  • In some cases, you may be able to use a gift from a relative, friend, employer, or not-for profit organization.
  • In many cases you will also have to demonstrate that you have additional funds in your accounts to cover several months of mortgage, tax, and insurance payments.

The property:
  • What is the market value of the property?
  • We will order a property appraisal to make sure your property's value meets our underwriting requirements.

Responsible lending guidelines
We approve applications from borrowers whom we believe have the ability to repay a loan or line of credit according to its terms. We use two ratio-based guidelines to evaluate a borrower's ability to repay.
What is debt-to-income ratio? Debt-to-income ratio is the percentage of your monthly income that is spent on monthly debt payments.
What is housing-to-income ratio? Housing-to-income ratio is the percentage of your monthly income that is spent on monthly housing payments.
Debt-to-income ratio:
  • Your expected monthly mortgage payment (principal, interest, taxes, and insurance) plus your other monthly debt obligations to your gross (pre-tax) monthly income are compared.
  • Mortgage program guidelines vary, but a good rule of thumb is to keep your total debt level at or below 36% of your gross monthly income.
Housing-expense-to-income ratio:
  • We also compare just your expected monthly mortgage payment (including taxes and insurance) to your gross monthly income.
  • Mortgage program guidelines vary, but a good rule of thumb is to keep your housing expense level at or below 28%.
Even if you fall within the 28%/36% rules of thumb, make certain that you feel comfortable making your monthly mortgage, insurance and tax payments and the payments on all your other monthly obligations. Homes have other costs — such as utilities, maintenance and repairs — that may not exist if you rent.

What can I do if I am having difficulty making my payment?Show Details

If you are facing payment challenges, don't wait another day. We're here to help you understand your options.
MortgageHome Equity
If you're struggling to make your monthly payments, or think you may have difficulty making payments in the future, find out about possible options that may allow you to keep your home in our Get Help with Payment Challenges section.

  • Getting started online
  • Call 1-800-678-7986
    Monday – Friday, 8 am – 9 pm, Central Time
    Saturday, 9 am – 2 pm, Central Time
The Wells Fargo Home Equity Assist program was created to help home equity customers through difficult times. If you're having financial difficulties, you may be eligible for a reduced monthly payment or gain more time to repay your loan.

  • Call 1-877-628-9584 today for more information.
  • If you don't have time to call now, you can request an appointment for a Home Equity Specialist to call you at a time that is convenient for you.
Brent D. Miller
Home Mortgage Consultant
NMLSR ID 404017
Office: 1-425-468-8638
Fax: 1-866-746-5890
Toll Free: 1-800-643-0528 Ext.8638
Contact Us
10900 NE 8TH ST Suite 1430
Bellevue, WA 98004

Closing cost options

Most home equity financing offers two options:

Have us pay your closing costs
  • You pay a higher interest rate to cover all required third party costs
  • This option is not available for financing greater than $500,000
Pay your closing costs
  • You pay a lower interest rate
  • Pay with your loan proceeds, line of credit, or a check

    For details, please contact us.

If you are a servicemember on active duty, prior to seeking a refinance of your existing mortgage loan, please consult with your legal advisor regarding the loss of any benefits you are entitled to under the Servicemembers Civil Relief Act or applicable state law.
Equal Housing Lender