Wells Fargo Home Mortgage Review

We recently obtained a home mortgage through Wells Fargo.  I compared four different companies - Wells Fargo had the best interest rate without paying points, and average morgtage fees.  Yes, the number of different fees was outrageous - but that's an aspect of the entire industry, not just Wells Fargo.  The mortgage representative was friendly and helpful - I worked with the same person throughout the entire process.  Underwriting went smoothly, and when calling customer service I got a  real person in less than a minute (despite calling at peak times).  Overall I'm pleased.

However, we almost were hit with a gotcha regarding the payment schedule.  I originally opted for the bi-monthly payment.  The idea was that some of the principle amount would be lowered two weeks earlier than with a monthly payment - thus saving us a little interest over the long haul.  I believe most folks familiar with basic finance would expect the same.  However, they don't actually apply the first half of the monthly payment....it is held in an 'unapplied' status until the second half is received, and only then applied to the mortgage principle.  So, not only do I not get the benefit of reducing the principle, they get to hold my money for an extra two weeks.   This set-up was alluded to in my payment election letter, but not spelled out.  When I called customer service to confirm, the first tier tried to tell me that it was immediately applied.  The true nature of the deal didn't come out until I insisted on speaking with a higher ranking representative. 

The other gotcha was regarding flood insurance.  We were originally given the 'option' to purchase flood insurance based on our flood zone - which we did.  However, when we got to closing it was written into the contract that we had to maintain that insurance for the life of the loan.  In other words, although we originally had the option to elect for flood insurance, we couldn't later elect to cancel that coverage.  

So, ask questions.  And ask more questions.  And if something doesn't quite make sense, ask again!  And always, always read everything they send you....