Wells Fargo offers conventional and government-program mortgage and refinancing loans with fixed and adjustable rates. It also offers construction loans. Only a few of the banks we evaluated offer these loans, which are more risky for the bank because the usual equity is the house itself. The construction loans come with a rate-lock option to let you set the interest rate while the home is being built. This protects against rising interest rates while your home is under construction, but if the rates decrease, Wells Fargo offers a one-time float down to the lower rate.

We checked interest rates in two ways. The first was by comparing rates posted on the websites of the mortgage companies. This comparison only goes so far, as each lender posts rates for what it considers an ideal loan. Next, we checked interest rates for a $150,000 home in California with $20,000 down for a borrower with a 700 credit rating. Wells Fargo's online calculator gave us the rates and estimated down payment. In all cases, Wells Fargo's rates were above average.

Because closing costs depend on fees beyond the bank's control, we looked only at bank fees like underwriting and processing that are paid as part of closing costs. The agents we spoke to said bank fees vary by state, but range from $700 to $1,000. These fall at or below average for the lenders we reviewed.

Like most banks, Wells Fargo requires a five percent down payment, although it may allow a three percent down payment for first-time homebuyers with excellent credit. It prefers to work with borrowers with a 600 credit score or higher but can make exceptions. Its preferred debt-to-income ratio is 45 percent, which runs average for most banks. It was one of the few mortgage companies that mentioned a preferred cost-to-income ratio: 33 percent. This is the percentage of your monthly income that goes toward your mortgage.

It customer service received our highest marks. The phone system quickly connects you to a loan officer. Every loan officer we spoke to answered our questions in detail, took time to explain things, and gave us accurate information without the hard sell we experienced with other mortgage lenders. The online application process seemed similarly user-friendly, with checklists to make sure you had the information you needed as you filled out the loan.

Wells Fargo has an excellent website for homebuyers wanting more information about what to expect. It contains an interactive guide, My FirstHome, that takes you through the process, from deciding whether or not to buy to maintaining your new property. The resources section contains articles, checklists and videos that cover all aspects of homeownership, not just the mortgage. The checklist section is similarly expansive.

Wells Fargo Home Mortgage Summary:

Wells Fargo had the highest interest rates of the mortgage lenders we reviewed, but it also had the best marks for customer service. Its website offers excellent information on home buying and home ownership that make it worth visiting even if you don't get a loan from this institution. However, if you are building your home, its construction loan program makes it worth checking out.


Wells Fargo Home Mortgage

Wells Fargo offers construction loans with a rate-lock program.

The interest rates were higher than most of the mortgage lenders we reviewed.

The Verdict:

Wells Fargo's interest rates were the highest of the top mortgage lenders we reviewed, but it offers excellent customer service. It's also one of the few banks to offer construction loans, making it a bank worth considering if you are building a home.