BSM Script Anchor

Refinance to a Fixed-Rate Mortgage

Time to refinance?

Let us help you decide if converting to a fixed rate makes sense for you

If you have an adjustable-rate mortgage (ARM) loan that recently has adjusted, you may want to talk to us about that change and how it affects your monthly payment.

How does an adjustable-rate mortgage (ARM) work?

Like many homebuyers, you may have been attracted to the low initial interest rate of an adjustable-rate mortgage (ARM). While adjustable-rate mortgages may have lower initial interest rates than fixed-rate mortgages, the initial interest rate is only for a set period of time. 

ARM Features

  • The interest rate on an ARM can rise or fall after the fixed period based on market or index rates while the interest rate of a fixed-rate mortgage does not change during the life of the loan.
  • ARMs have an initial fixed- rate period, when rates and monthly payments may be lower than fixed-rate loans. 
  • When the initial fixed-rate period ends, the monthly payment adjusts based on the type of ARM loan you have. Your interest rate (and monthly payment) will rise or fall based on the market rate or index.    

Possible benefits of refinancing to a fixed-rate mortgage

  • Stability. You may gain protection from rising interest rates and future payment increases. Fixed-rate loans provide predictable monthly principal and interest(P&I) payments. 
  • Loan options. Wells Fargo offers a variety of convenient fixed-rate mortgage options.


Refinancing may be an option for you to consider if your loan is adjusting to an interest rate that's higher than the current market rates.

What should I know about refinancing my current ARM loan?

In some situations, an adjustable-rate mortgage may be a good choice for you, but keep in mind that the interest changes at a predetermined time and may change every year.

Reasons to consider keeping your existing mortgage

  • If interest rates are low, your ARM's interest rate and monthly payment could go down. Your lender will notify you about any changes in rate or payment.
  • If the difference in your ARM's adjusted interest rate and the rate on available fixed-rate loans is small, consider the number of reduced monthly payments it will take to offset the costs of refinancing.
  • If you're planning to sell your home in the near future, it may be less costly for you to accept your ARM's payment adjustment, since you may not recoup the closing costs often associated with refinancing before you move.

ARM refinancing options

  • You may want to consider refinancing to a new ARM if you can match the amount of time you think you'll own your home with the new ARM's initial fixed-rate period. Find out about Wells Fargo's adjustable-rate loan options.
  • If you expect to remain in your existing home for a longer period of time, a fixed-rate mortgage protects you from rising interest rates and has fixed monthly principal and interest payments for the entire mortgage term. 

Fixed-rate mortgage features

  • A shorter loan term provides faster equity growth and requires less total interest payments but may have a higher monthly payment.
  • A longer loan term has lower monthly payments and may provide greater potential tax deductions. (Consult your tax advisor).

For both long-term and short-term loans, you can manage your budget by using an automatic payment plan that can be timed to your pay schedule. Learn more

What are the benefits of refinancing?

When interest rates are low, you might consider refinancing your mortgage. Refinancing may allow you to replace your current loan with a new mortgage that has better terms. Here are some of the potential benefits of a refinance.

Increased cash flow

  • Your loan's monthly payment typically decreases with a lower mortgage interest rate.
  • With a lower payment, you can use the extra funds for retirement savings, paying other debts, saving money for college, or other purposes.

Potential to switch to a different loan type

  • If you have an adjustable-rate (ARM) or a balloon mortgage, reduced interest rates may make a fixed-rate mortgage more desirable, especially if you want the stability of an interest rate that does not change over time.
  • If you have a long time left on your mortgage, lower interest rates may make it possible to switch to a shorter-term mortgage.
    • You can pay the principal balance down and build equity faster.
    • You may pay less interest over the life of the loan with a shorter term loan.
  • If you have a jumbo loan, you may be able to refinance to a "blended jumbo" (Mortgage + Home Equity Financing). 

Opportunity to access the equity in your home

  • While you're lowering your interest rate, you may want to consider using the equity in your home to pay for major purchases or to make home improvements. This type of loan is known as a cash-out refinance.
  • See how much available equity you have for a cash-out refinance with a free refinance analysis.

How can I decide if refinancing may be right for me?

Your home may be the largest asset you have. Before deciding to refinance, be sure to consider the following so you can make an informed decision.

Determine your estimated costs

When you refinance, you may pay:

  • An origination charge , which may include fees such as application or processing.
  • Discount points to lower your interest rate further. (May be tax deductible. Consult your tax advisor regarding deductibility).
  • A prepayment penalty if your current loan has a penalty for early payoff.
  • Other settlement charges such as appraisal, credit report, title search, and title insurance fees.


You may be eligible for a reduced reissue or refinance rate on your title insurance if the property's current policy was issued recently. Ask your title or closing agent if you qualify.

Assess how much longer you'll stay in the home
If you plan on owning the home for an extended period of time, and the interest rates are 1/2% to 5/8% lower than your current rate, refinancing may be the right choice for you.

Determine your break-even pointOver time, you may be able to break even on your refinance closing costs.
Your break-even point occurs when your savings from your new loan equals the cost of getting the new loan. 

Additional considerations
Keep in mind that you are starting over. Refinancing replaces your existing loan with a new one. If you refinance back to the same loan term on the new mortgage, you may pay more additional interest than you would if you refinance for a term that is the same as or shorter than that of your original loan.

Use our refinance calculator to help determine if refinancing may be right for you.

What home financing basics should I understand?

If you obtain home financing, you'll repay more than the amount you borrowed because the amount you repay is determined by several factors, including the interest and loan amount. Here are some terms you should understand.

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 mortgage amount. If you qualify, you may be able to pay one or more points to lower your interest rate. A lower interest rate typically means lower monthly mortgage payments.
  • Points are usually tax deductible. Consult a tax advisor regarding tax deductibility. On refinances you may be able to finance points as part of your mortgage amount.

Origination charge

  • On a mortgage, this amount includes all charges (other than discount points) that all loan originators (lenders and brokers) involved will receive for originating the loan.
  • The origination charge covers items including fees, document preparation, and underwriting costs, and other expenses.
  • On refinances, 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 mortgage balance.
  • Shorter loan terms typically mean higher monthly mortgage payments, but often have lower interest rates.
  • If you pay off your mortgage 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 mortgage is reflected by the interest rate, discount points, fees, and origination charges. This total cost is known as the annual percentage rate (APR), which is typically higher than the interest rate. The APR lets you compare mortgages of the same dollar amount by considering their total annual cost.

Monthly mortgage payment

Your monthly mortgage payment is typically made up of four parts:

  • Principal. The part of your monthly payment that reduces the outstanding balance of your mortgage.
  • Interest. The part of your monthly payment that goes toward the cost of borrowing the money.
  • Taxes. The part of your monthly payment that goes toward property taxes charged by your local government. We typically collect a portion of these taxes in every mortgage payment and hold the funds in an escrow account for tax payments made on your behalf as they become due.
  • Insurance. The part of your monthly payment that pays for homeowners or hazard insurance, which provides protection against losses from property damage due to wind, fire, or other risks. Like taxes, insurance costs are usually collected and paid from an escrow account.

Depending upon your property location, property type, and loan amount, you may have other monthly or annual expenses such as mortgage insurance, flood insurance, or homeowner association fees.

Video - The components of a mortgage payment

Video: The components of a mortgage payment

Watch this video to understand what makes up a typical mortgage payment - principal, interest, taxes, and insurance - and how they can change over the life of the loan. 

How will you evaluate my home financing application?

When you apply for home financing, we generally use these four main criteria to assess your application.


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, provided they can be verified as stable, reliable, and likely to continue for at least three years. Some examples include retirement or veteran's benefits, disability payments, alimony, child support, and rental or investment income.

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.
  • We also review your credit history and credit score.

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 a down payment (if you're buying a home) and closing costs?

  • You may use funds from various accounts including savings accounts, certificates of deposit (CDs), investments, and retirement funds.
  • If you're buying a home, in some cases, you may be able to use gift funds toward closing costs and all or part of your down payment.
  • Generally, you'll also need to show 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 you want to finance?

We will order a property appraisal to make sure the value of your property meets our underwriting requirements.

Responsible lending guidelines

We approve applications where we believe the borrower has the ability to repay according to the terms of the financing. We use two ratio-based guidelines to evaluate your ability to repay.

Debt-to-income ratio

Debt-to-income ratio is the percentage of your monthly income that is spent on monthly debt payments.What is debt-to-income ratio? Debt-to-income ratio is the percentage of your monthly income that is spent on monthly debt payments.

  • We compare your expected monthly mortgage payment (principal, interest, taxes, and insurance) plus other monthly debt obligations to your gross (pre-tax) monthly income.
  • 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

Housing-to-income ratio is the percentage of your monthly income that is spent on monthly housing 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.

  • 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% guidelines, make sure you're comfortable making your monthly mortgage, insurance, and tax payments, in addition to all of your other monthly payments. Remember that homes have other costs — such as utilities, maintenance, and repairs — that may not exist if you rent.

How to calculate your ratios

What can I do if I am having difficulty making payments?

If you're facing payment challenges, don't wait another day. We're here to help you understand your options.

Explore your loan options

We can help you learn about different home loans. Review the loan choices below and visit our Loans & Programs area.

Loan options to consider Fixed payments Requires little equity to refinance Ongoing access to available equity Higher loan amount
Fixed-Rate Mortgages
View details

Mortgage + Home Equity Financing
View details

Home Equity Line of Credit With Fixed-Rate Advance
View details


 Find the Right Loan for You 

Customize and compare rates, payments, and estimated closing costs.

Get Started

We focus on your mortgage and home equity needs with the goal of delivering a straightforward and convenient application experience. Let us show you how easy it is to apply for mortgage or home equity financing with Wells Fargo.

The mortgage application process

How do I apply for a mortgage?

Gather essential information

When you apply for a mortgage you'll need to provide financial and property information to complete the application. This includes:

  • Income, asset, and expense information
  • Estimated purchase price and down payment (if buying)
  • Estimated property value and loan amount (if refinancing)

Review our homebuying application checklist (PDF) or refinance application checklist (PDF) to learn more.


You'll need to provide documentation to support the information on your application later on in the process, so it's a good idea to start gathering the documents now.

Begin your application

Get started through any of these convenient ways:

Once you apply, you'll receive important disclosures about your loan. If your loan is eligible to be tracked through yourLoanTrackerSM, you'll receive a notification from your home mortgage consultant.

Do I need to pay a fee to submit a mortgage application?

Yes, there is a fee to apply for a mortgage. Fees cover the cost of the credit check, verification of your financial information, and property appraisal. Fees vary by loan type and the location of the property. Your home mortgage consultant will provide specific fee details during the application process including when the fees need to be paid.

Is there an advantage to locking in my pricing?

If you want to avoid the possibility that interest rates will rise before you close on your home loan, you can lock in your loan pricing after your mortgage application is completed.

Are the features different for some types of mortgage loans?

Yes, if you're purchasing a newly built home, some additional loan options may be available.

Financing your newly built home

When you're purchasing a home from a builder, the mortgage application process is very similar to the process for buying an existing home. However, on loans for newly built homes, you also have the option of choosing our Builder Best® Extended Rate Lock program. Our exclusive Builder Best Extended Rate Lock program can help protect you from changing interest rates while your home is being built. With a required, non-refundable extended lock fee, you can lock down a range of interest rates and focus on what really matters most — building your new home.

What if interest rates rise?

Your interest rate range is protected. Lock in your interest rate range anywhere from 5 to 24 months depending on the type of loan you select.

What if interest rates drop?

You have options. You may be qualified for a one-time float down option to a lower rate or a different loan program. Change of loan product or program, change in loan-to-value ratio, or change of interest rate will require underwriting approval. Exercising the one-time float-down option is not allowed within 30 days of the original lock. The float-down option is available within the earlier of 60 days of loan closing or lock expiration date. The float-down option allows a change to any lender product or program or re-lock to the current available interest rate.

Talk to a home mortgage consultant about this possibility.

Visit Buy a New Construction Home for more information.

The home equity application process

How do I apply for home equity financing?

To apply for home equity financing, you must own a primary residence, investment property, or vacation home. If you don't own property, you might want to consider a personal loan or line of credit instead.

It's easy, fast, and secure to apply:

Gather essential information

Before you start the home equity application, have the following information on hand:

  • Financial information. Income, asset, and expense information.
  • Property information. Estimate a realistic value of your home.
  • Funds needed. Carefully evaluate the line of credit amount you'll need.


You'll need to provide documentation to support the information on your application later on in the process, so it's a good idea to start gathering the documents now.
Review our home equity application checklist (PDF) to learn more. 

Submit your application

It's easy to get started. Choose to work with us whichever way is best for you:

  • Online. Fast, easy and secure and it will take about 10 minutes. Get started.
  • Over the phone. Call your home mortgage consultant to get started.

Remember, if you have questions, our home equity specialists are ready to help. You can also track the status of your application 24 hours a day, 7 days a week with yourLoanTracker.

Do I need to pay a fee to submit my home equity application?

There is no fee to submit a home equity application and we will pay closing costs for services required by the bank. If you're a Wells Fargo customer, you may also benefit from interest rate discounts.

What should I consider when applying for home equity financing?

  • Make sure your requested line of credit amount is between $25,000 and $500,000 (some state restrictions apply). For larger line amounts, please contact us.
  • Carefully evaluate how much you need. Your requested amount plus the existing mortgage balance and any other outstanding liens against your property should be less than 80% of your home's current value.
  • Provide a conservative estimate of the value of your home.
  • Track the status of your application by signing on to yourLoanTracker.
  • Ask about special interest rate discounts for Wells Fargo customers.

After you apply for your mortgage or home equity line of credit, we'll work with you to ensure that the process is a straightforward and satisfying experience.

After you apply for a mortgage

What happens after my mortgage application is submitted?

We'll send you disclosures listing your loan terms as well as estimated payments, and your application will be reviewed by an underwriter.

During the financial and property review, we'll:

  • Verify your employment, income, and financial information
  • Order services such as an appraisal, title insurance, and flood certification.
  • Send you a list of conditions, upon loan approval, that have to be met before you can prepare to close your loan.

Learn more about the documents you may be asked to provide.

You'll need homeowners insurance to close your loan. Get started by contacting your insurance company or learning more about homeowners insurance.

How does the mortgage closing process work?

Prepare to close

Once your application is approved, we'll work with you and your closing agent to complete the following steps:

  • Ensure all loan approval and closing conditions have been met.
  • Confirm or set a closing date to sign your loan documents.
  • Review the title insurance to make sure you have rights to the property.
  • Review your homeowners insurance policy to make sure you have adequate coverage.

Before your closing, you'll receive your final disclosures confirming the amount of money you'll need, so you can arrange to have funds available for your closing.

At closing

We'll send the closing documents to your closing agent. On your closing day, review the documents carefully with your agent, then sign and date them.

  • If you're buying a home, collect the keys and move in. Congratulations!
  • If you're refinancing a mortgage on your principal home (not a vacation or investment property), you have a three-day right-of-rescission to cancel the transaction.

After your loan closes, you can manage your account online. Wells Fargo Online® gives you convenient access to account information, tax data, and payment options. Learn more about online payments or enroll in online banking.

How can I keep track of my mortgage application?

Your home mortgage consultant can answer any questions regarding your application status. Also, if you're notified that your loan is eligible, you can use yourLoanTracker to:

  • Receive disclosures
  • Provide financial documents
  • Check the progress of your application
  • Receive status updates throughout the process
  • Electronically sign select documents

What can I do to help my mortgage close on time?

Here are a few important steps you can take to help your mortgage loan close on time:

  • Provide accurate information during your loan application interview. Discrepancies in your credit history, employment history, or current bank account balances could delay your loan process.
  • Help keep your application moving by submitting requested documents promptly. Learn more about documents we may request in our document library.
  • Do not make big purchases, take on additional debt, transfer large amounts or make large deposits unrelated to your loan, until after your closing.

Are the features different for other types of mortgage loans?

Yes, loans for newly built homes may have additional loan options and different requirements.

Financing your newly built home

  • Choose from a large variety of mortgage products.
  • With a required, non-refundable extended rate lock fee, you can lock in a range of interest rates from 5 months and up to 24 months depending on the loan product with our Builder Best® Extended Rate Lock program.
  • Your home mortgage consultant will help you find a loan option that works for you.

Visit Buy a New Construction Home for more information.

After you apply for home equity financing

What happens after my home equity application is submitted?

We'll review your application and complete the following:

  • Let you know the status of your application within a few business days.
  • Request additional information such as financial documentation and income verification.
  • Order appraisal, title insurance, flood certification, and other services as necessary.

You can also track the status of your application 24 hours a day, 7 days a week with yourLoanTracker.

How does the home equity closing process work?

Choose to close in a Wells Fargo bank store, or from the comfort of home by mail if available.

  • To keep things moving, be sure to sign and return all requested documents as soon as possible. 
  • If additional documents are requested, you can learn more about them in our document library.
  • Your home equity specialist can help you understand what may be required.
  • We'll activate your account after we receive your signed documents and your right-to-cancel period, if any, has expired.

You'll be able to access your available credit with your Enhanced Access® Visa® credit card, access checks, Wells Fargo Online® banking, or your ATM card.,,

After you close, you can manage your account online. Wells Fargo Online® gives you convenient access to account information, tax data, and payment options. Learn more about online payments or enroll in online banking.

How can I keep track of my home equity application status?

With yourLoanTracker you can:

  • Receive disclosures
  • Provide financial documents
  • Check the progress of your application
  • Receive status updates throughout the process
  • Electronically sign select documents

What can I do to help my home equity financing close on time?

  • Monitor yourLoanTracker to keep track of your progress.
  • Make sure you sign all relevant documents, get them notarized (as needed) and return them to us as soon as possible.

After your mortgage or home equity financing closes we provide a variety of ways to manage your account online. View account activity, transfer funds, make payments, and more — anytime, anywhere and at your convenience.

Manage Your Mortgage Account

Manage Your Home Equity Account

Manage Your Finances

  • Get help if you're having trouble making your mortgage or home equity payments
Talk to us about your refinance goals and options. Get Started

If you are a service member on active duty, prior to seeking a refinance of your existing mortgage loan, please consult with your legal advisor regarding the relief you may be eligible for under the Servicemembers Civil Relief Act or applicable state law.

Index rates

Index rates are used to calculate rates on an adjustable-rate mortgage. They are tied to an industry-determined index, depending on the loan product chosen.

Principal and interest (P&I) 

The 2 main components of your monthly payment. The principal portion reduces your loan balance, while the interest is your cost for using the principal. Your monthly payments may include taxes and insurance in addition to P&I.

Origination charge

One amount for all charges (except points) to be paid to all loan originators involved in the transaction for originating the loan. Includes application, processing, and underwriting fees, and payments from the lender to the broker for origination.

Discount points 
Charges paid to the lender voluntarily by the borrower or seller to permanently reduce the interest rate. One discount point is equal to 1% of the principal amount of the mortgage; however, 1 point will typically reduce the interest rate by less than 1%.

Title insurance 

Insurance that protects the lender or homebuyer (if the homebuyer purchases an owner's coverage policy) against loss resulting from a title error or dispute.


A report made by a qualified person to estimate the value of a property, often used to help determine an appropriate loan limit. If you're purchasing, the appraised value usually needs to be equal to or greater than the home's purchase price.


Standard conditions include our receipt of homeowner's insurance policy, flood insurance if necessary, and an acceptable title insurance binder.

Closing agent 

This is the person or company that coordinates the execution of your closing documents. May be called by different titles in different states. Some common terms are attorney, title company, settlement agent, escrow company, notary, among others.