Wells Fargo Mortgage Payoff Procedure - Empowering Your Financial Journey

You might be able to reduce the amount of interest you pay over the course of your mortgage by rounding up your monthly principal and interest payment or by opting for biweekly payments instead of monthly. Instead of paying off a high-interest credit card or increasing your emergency savings, you might want to think about whether making extra mortgage payments is the best use of your money.

Mortgages are designed to be repaid over a specific period of time; some typical durations are 30 years and 15 years. Your monthly payments not only pay interest but also lessen your principal (the amount you borrowed).

However, this does not imply that your loan must last for 30 years. If you sell your house, the proceeds might be used to pay off your mortgage. more than you sponsored,, compared to Fig Fig s,,, l, Fig. Fig. This method might help you pay less interest over time, but it’s important to take into account all of your financial obligations, such as credit cards, student loans, auto loans, and emergency savings.

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Wells Fargo Mortgage Payoff Procedure

Key takeaway

However, this does not imply that your loan must last for 30 years. If you sell your house, the proceeds might be used to pay off your mortgage. Or, if you determine that you can afford to pay more on your mortgage each month than the standard monthly payment, you may do so. This method might help you pay less interest over time, but it’s important to take into account all of your financial obligations, such as credit cards, student loans, auto loans, and emergency savings.

How paying extra on your mortgage may help you pay less interest over time

Learn how making extra payments on your mortgage could help you pay off your mortgage faster by watching the video and reading the information below.

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Transcript: How paying extra on your mortgage may help you pay less interest over time

[Title of video: How making extra mortgage payments could result in you paying less interest over time]

[of two individuals in front of a “Sold” sign outside a home]

Your financial situation may change at some point after you buy a home. You might receive a raise, increasing your monthly income, or you might pay off a credit card, lowering your monthly expenses. When this occurs, you might think about paying more than your monthly mortgage bill in order to pay off your debt and increase the value of your home more quickly.

[s of a woman at her kitchen table writing on a notepad, a man looking at his credit card, and a woman sitting in front of her computer]

You may be able to lower the total amount of interest you pay over the course of your mortgage by making additional payments on your principal mortgage balance, which is the sum you borrowed.

[of an icon of a house and an up arrow, then an icon of a percentage symbol and a down arrow]

comparison with’s””””””””””’in thet Therefore, increasing your mortgage payment may not always be the best use of your extra cash; instead, you may want to pay off other credit accounts with higher interest rates or increase your emergency fund.

[A house and a stack of dollars are depicted on either side of the icon. House then transforms into a wallet with an exposed credit card and into a piggy bank with coins falling into it.

– –––––––––––––––––––––––––––– a

Meet Ryan and Amber. They each took out a $194,000, 30-year mortgage with a fixed rate of 4% to buy a house, with a $926 monthly principal and interest payment.

[Icons of a man and a woman]

[Icon of a home]

We’re leaving out potential supplementary expenses like private mortgage insurance, taxes, and homeowners insurance for this fictitious scenario. We also assume that they decide on these options at the very beginning of their mortgage loan and stick to them going forward.

Here are two straightforward strategies you can use to potentially cut your mortgage interest costs overall. Let’s examine how Ryan and Amber’s total interest payments will vary based on how they choose to make their payments.

Scenario 1: Paying more than is required each month.

[Animated numbers below the icons of a man and woman show how much they pay each month]

Ryan will pay his $926 regular monthly payment. Amber, however, will round up her payment to $1,000 per month from the very first month and stick to that amount for the entire term of her mortgage. The additional payment she makes is added to the mortgage’s principal.

This doesn’t cost Amber a lot each month. However, it shortens the time it takes her to pay off her mortgage by about four years and prevents her from paying nearly $21,000 in interest.

[of a bar graph displaying the total interest each person has paid] For Ryan, it is $139,425. For Amber it is $118,623].

[Text on screen demonstrates that Amber is saving $20,802 less in interest than Ryan]

Scenario 2: Make biweekly payments instead of monthly payments.

Again, Ryan is making his payment of $926 every month. Amber, on the other hand, decides to make a half payment of $463 every two weeks at the start of her loan term, ensuring that her second payment of each month always arrives before the due date.

[Animated numbers below the icons of a man and woman show how much they pay each month. [Followed by a calendar icon displaying Amber making 26 biweekly payments and Ryan making 12 monthly payments.]

Amber ultimately pays one extra monthly payment annually by making 26 biweekly payments.

Amber will pay off her mortgage in about 26 years rather than Ryan’s 30 if she continues to do this each month, saving nearly $21,000 in interest over time.

[of a bar graph displaying the total interest each person has paid] For Ryan, it is $139,425. For Amber it is $118,596].

[Text on screen demonstrates that Amber is saving $20,829 less in interest than Ryan]

Any additional payments you can make toward the mortgage’s principal may enable you to eventually pay less interest overall. However, making a consistent effort, beginning with your first mortgage payment, can really help you advance.

[of a couple conversing with a mortgage lender]

Check with your lender to see if there are any requirements that could result in fees or penalties for any of these choices before you begin making additional loan payments. Additionally, you might need to specify that they add any additional payments to the mortgage’s principal.

[of a woman using her laptop in her living room]

Extra income is always a nice feeling. Making the most of that extra money can be a great way to improve your financial situation and may assist you in achieving other life goals.

A Wells Fargo home mortgage consultant might be able to explain your options to you and help you choose the best one. ].

[Text on screen: myfirsthome.wf.com]

There are other options besides the ones shown in the video if you want to make extra mortgage payments. For instance, if you receive a tax refund, you could pay your mortgage in full at once and request that the money be applied to the principal. Additionally, you can combine scenarios by selecting biweekly payments and then converting that amount to a whole number.

Refinance your mortgage to a lower rate: Refinancing your existing mortgage could result in a lower monthly payment amount if you refinance with a lower rate and the same term as what’s remaining on your current loan. You could also keep making the original higher payment amount, from your old loan which would help pay off your new loan sooner and pay less interest.

Refinance your mortgage to a shorter term — Alternatively, if you find that you’ve paid off about 10 years on a 30-year mortgage, you could refinance to a 15-year mortgage to get you closer to the end date.

Paying extra on your mortgage loan may have other advantages.

You can reduce your private mortgage insurance (PMI). If you made a down payment of less than 20% of the purchase price initially or your loan required private mortgage insurance for another reason, making extra payments may help you eliminate your PMI when you reduce your balance to less than 80% of your home’s original appraised value or sales price, whichever was lower, and you request the lender cancel or terminate your PMI.

You can potentially save thousands of dollars on the additional interest you’d pay over the course of the mortgage term.

If you plan to stay in your home for the long haul, it makes sense to expedite the payoff so you remove part of your housing costs (although you’ll still need to pay applicable taxes, homeowners insurance, repairs, and upkeep).

Many people believe the ultimate peace of mind is knowing you own your own home outright. For example, if you lost your job or had to take a pay cut, you can rest easy knowing that you don’t have to make monthly mortgage payments.

Remember that it’s crucial to strike a balance between your financial priorities. Think about the following before deciding to pay off your mortgage early:

Though Wells Fargo doesn’t have prepayment penalties, you could potentially face prepayment penalties with another lender. Check your mortgage paperwork for a “prepayment penalty” or “prepayment disclosure.” Typically, a prepayment penalty is a fixed fee, but some are on a sliding scale based on how long you’ve held the loan.

As mentioned in the video, one common strategy for paying down debt is to try to pay more on the one with the highest interest rate first. This may not be your mortgage but could be a credit card or student loan instead. Consider other needs, as well, such as retirement savings, emergency funds, and investments.

Tapping into retirement savings may put your retirement at risk. In general, this strategy is considered risky and is highly discouraged.

Your mortgage payments may provide you with benefits that other types of credit don’t, such as a potential tax deduction. Consult your tax advisor.

As you apply for a mortgage, your home mortgage advisor can assist you in understanding your payment options. Discuss your objectives with them to determine the approach that will work best for you.

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Your monthly mortgage payment typically has four parts. You only need to keep track of one due date if you make a single payment that covers all four components.

4 reasons to consider refinancing your mortgage

You can shorten the time it takes to pay off your loan or lower the interest you pay by refinancing, or both.

Call 1-877-510-2079 from 7 am to 8 pm on weekdays and 8 am to 6 pm on weekends in Central Time.

Call 1-800-357-6675 from 6 am to 10 pm on weekdays and 8 am to 2 pm on weekends in Central Time.

Before looking to refinance your current mortgage loan if you are a service member who is currently on active duty, please speak with your legal counsel about the relief you may be eligible for under the Servicemembers Civil Relief Act or applicable state law. Equal Housing Lender.

One of Wells Fargo Bank’s divisions is Wells Fargo Home Mortgage. A.

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FAQ

How do I pay off my Wells Fargo Mortgage?

If you’d like, you can pay at a Wells Fargo branch in person, by mail, or online. Automated phone payments. Call us at 1-800-357-6675 any time, day or night, seven days a week.

What is the process for paying off mortgage?

Steps to Pay It Off

Request a payoff quote from your mortgage servicer.
Pay the balance due in accordance with the quote and any additional instructions, such as paying by wire transfer.
Receive documents verifying your loan repayment.

Does Wells Fargo charge a fee to pay off mortgage early?

Although Wells Fargo doesn’t charge prepayment penalties, you might when working with another lender.

How do I pay off the rest of my mortgage?

Five ways to pay off your mortgage early

Refinance to a shorter term. …
Make extra principal payments. …
Make one extra mortgage payment per year (consider bi-weekly payments) .
Recast your mortgage instead of refinancing. …
Reduce your balance with a lump-sum payment.