Wells Fargo 500 Credit Score Home Loan | Complete Guide 2022

When choosing a loan for a home, it is important to consider the freedom it provides in your life. Before you choose your perfect home loan, consider the value of stability and peace of mind. A home loan can provide an opportunity for you and your children. You will be able to not just design your house yourself but to build special memories with your family.

Owning your own home can be an enormous source of pride and satisfaction, giving you a place to raise your family, build memories, entertain friends, and relax after a hard day’s work. However, getting a house loan is easier said than done – in most cases, you will require good credit scores and substantial savings for a down payment. If you fall short of these requirements, applying for one could seem like a lost cause.

For those who are worried about their credit scores and think they will never be able to buy their dream home go through this article. Wells Fargo can help you fulfill your dream, as it gives low credit score mortgages.

The ‘Wells Fargo 500 credit score‘ home loan is designed for those with lower credit scores that want to buy a new home but are struggling to find a lender.

In this article, you will find all the details regarding Wells Fargo 500 credit score home loan.

What is Wells Fargo 500 Credit Score Home Loan?

A Wells Fargo 500 Credit Score Home Loan is a Wells Fargo home mortgage loan given to a borrower with a credit score between 501 and 550. This credit score range is considered a “poor to fair” credit rating and should be treated as such. While some lenders may consider a slightly better credit score, the interest rates will most likely be much higher.

A Well Fargo mortgage 500 credit score home loan can be used for all of the same purchases as any other type of mortgage, but because of its low credit rating, it will typically come with higher interest rates and fees.

Some people choose to take out a 500 credit score home loan because they have no other options, and others do so because they want to pay more in order to get their money faster.

Whatever your reasons are forgetting one of these loans, make sure you understand exactly what you are getting into before you sign your name on the dotted line.

A Well Fargo 500 credit score home loans are not necessarily bad deals, but they can be if you don’t know how to work them. You will have to pay more for the privilege of taking out a 500 credit score home loan, which may or may not be worth it for you.

What is a credit score?

A credit score is a numerical expression based on a statistical analysis of a person’s credit files and designed to represent the creditworthiness of that person.

The purpose of the credit score is to aid in the decision process for granting credit—or help determine the interest rate charged on outstanding debt. Credit scores are used in many places in the financial world, including banks and retail stores. Some employers also use them or may ask for a credit score as part of a background check.

There are several different credit scoring systems in use today. One of the most commonly used credit score definitions is the FICO score, which was developed by Fair Isaac Corporation. This score ranges from 300 to 850 and is based on information from your credit report.

The credit score calculation formula has five main components: payment history (35%), amounts owed (30%), length of credit history (15%), new credit, and types of credit used (10% each).

Paying your bills on time is a key factor. Late or missed payments will have a negative impact on your credit score. If you pay all your bills on time, this can help maintain a good credit score. However, even if you do go through a rough patch and make late payments, it’s important to get back on track as soon as possible. Paying off any late payments in full before the due date also helps to improve your score.

Payment history makes up about 35% of your FICO score. This portion measures how consistently you’ve made payments throughout your credit history and how many times you’ve been 90 days or more behind on payments. The length of your credit history accounts for 15%, with the best scores going to people who have had the same type of accounts for a long time, such as mortgages or car loans, but have not opened up many new ones recently. Your total debt load contributes 30% to your overall score, so think carefully before taking out any additional loans or opening up new credit cards.

What Is a Good Credit Score?

Your lender will determine what constitutes a good credit score. Typically, this ranges from 800 to 850 with most lenders using the higher end of this range when considering your creditworthiness. It is important to note that each lender has its own criteria for establishing what constitutes a good credit score and many factors can affect your rating.

FICO Score standard

  • 800 to 850 = Exceptional.
  • 740 to 799 = Very good.
  • 670 to 739 = Good.
  • 580 to 669 = Fair.
  • Very poor =300 to 579.

Wells Fargo 500 Credit Score Home Loan FHA Loan

If you’ve been searching for a loan that offers lower interest rates, fewer fees, and more perks than your current one does, but still has a low down payment requirement, then you’ll want to take a closer look at the Wells Fargo 500 Credit Score Home Loan. This loan gives borrowers with lower credit scores the opportunity to get a home loan with up to 3.5% down. For borrowers who have a credit score of 500 or below, that makes it possible to find a mortgage with a lower minimum down payment than they might be used to.

If you have a FICO Credit score of at least 500, then you only need to make a 3.5% down payment on the house you want. If you have a 580 or higher credit score, then you only need to make a 3.5% down payment as well, but there are no other conditions that apply to you.

On the other hand, if your FICO Credit score is between 500 to 579, then the bank will require that you make a 10% down payment on the house you want, and there are some other conditions that apply to you as well: your debt to income ratio must be 50% or lower, your income needs to be valid, and your housing payment must fit within your budget along with all existing debts.

The house must be your primary residence, and it also needs to meet some minimum property requirements of an FHA Loan.

You must have some valid income, be able to afford your housing payment and all existing debt, and the property must be your primary residence.

Wells Fargo 500 credit score home loan advantages and disadvantages

Wells Fargo is a bank that has quite a number of products. One of those is the FHA loan. It is an option for those individuals who want to buy a home in the United States.

Advantages:

  • Fixed-rate and adjustable-rate financing: This means that if you want, you can get both fixed and adjustable-rate loans from Wells Fargo, depending on your financial circumstances at the time.
  • It offers lower down payment as low as 3.5%. You don’t have to be wealthy to buy a house. You can also use a gift fund to cover the down payment if you don’t have enough money saved up.
  • It allows you to use a co-applicant who doesn’t even live in the home. If you can’t provide all the necessary information, such as credit score, for example, then you can ask someone else to help out. 

Disadvantages:

Though they’re super popular, right?

But when you look into it a little bit, it turns out that they have some pretty big disadvantages compared to the other loan types out there.

  • The main disadvantage of an FHA loan is that the down payment requirement is higher than many other types of loans. If you’re looking for financing for a $200,000 house, for example, you will need to come up with 3% of the purchase price as your down payment. Some other types of loans from private lenders might only require 2% or even no down payment at all.
  • Another disadvantage is that your monthly payments will be higher than they could be with some other types of loans. The reason for this is that the FHA charges insurance fees that are not included in the interest rate on your loan. When you go to the bank or credit union to get a conventional mortgage, you can choose between several different kinds of insurance; not so with an FHA loan. 
  • The other thing to keep in mind is that FHA loans require mortgage insurance—unless your credit score is 750+, in which case you can get a no mortgage insurance loan instead (but these are hard to come by).

Wells Fargo Mortgage Interest Rates and Monthly Payments

If you’re looking to purchase a home, odds are that you’ve considered Wells Fargo Mortgage. Options abound these days, but Wells Fargo has been around for decades, providing high-quality mortgages to people all over the nation.

We’ll take a look at their mortgage interest rates and monthly payments to see if they’re right for your particular situation.

The first thing you’ll want to look at is the 30 Year Fixed Rate Mortgage. It provides a 3.125% interest rate and $857 monthly payments (per month for 30 years).

If you’re in it for the long haul, this option might be right for you; lots of people choose to stay in their homes for decades rather than making the decision to move elsewhere. This plan also has lower monthly payments than some of the other options Wells Fargo has available.

If your goal is to purchase a home faster, though—and potentially move sooner—you can choose from one of three 15 Year Fixed Rate Mortgages options: 2.50%, 3.00%, or 3.25%. They all provide a low $1,334 monthly payment (per month for 15 years).

These plans have a higher interest rate than the 30-year plan, but also have smaller payments and can get you into your new home faster.

FAQ’s

What credit score does Wells Fargo require for home loans?

While most lenders require a minimum credit score of 620 to qualify for an FHA loan, Wells Fargo is known for being more lenient. If you have a lower credit score and still want to purchase a home, applying with a low down payment could help you get approved. For example, if your credit is at 500 and you’re able to contribute 3% as a down payment, you’ll be eligible for an FHA loan from Wells Fargo.

It’s important to note that there are some other requirements that come with having a low down payment. You can read about them below:

You’ll have to pay mortgage insurance (MIP). MIP protects the lender in the event that you default on your loan. It’s similar to private mortgage insurance (PMI), but it’s typically much less expensive than PMI.

You’ll have higher monthly payments. Although some people think paying MIP will help their situation, because they’ll have to pay less upfront, it actually will make your monthly mortgage payment higher. This is because the MIP gets added to your principal balance.

You can’t withdraw money from your equity. Banks are wary of customers who might be tempted to withdraw money from their homes if they’re struggling to make their monthly mortgage payments.

What are Wells Fargo credit score requirements for mortgage approval

Wells Fargo requires a minimum credit score of 620. However, if you have a lower credit score, it may still be possible to get approved for a mortgage with Wells Fargo.

If you have a lower credit score, the bank will look closely at other factors about your application including income, assets, and employment history.

Wells Fargo may also consider giving you a higher interest rate or requiring you to pay private mortgage insurance, which protects the lender in case you can’t make your payments.

The bottom line is that even if your credit isn’t perfect, Wells Fargo might still be able to help you get qualified for a mortgage loan.

You may read also: how much do veneers cost with insurance

Which credit score does Wells Fargo use?

Wells Fargo provides a wide range of financial products and services, including home loans, personal loans, credit cards, and banking. Here you can learn about the requirements for credit cards and mortgages.

For most of its retail banking products, Wells Fargo uses FICO scores to determine whether it will provide financing or how much it will charge in interest rates. FICO scores range from 300 to 850. Lenders typically set their minimum credit limit that is 600+. There are some exceptions, however. For example, Wells Fargo allows the FHA loan with a minimum 500 credit score with a 10% down payment and 580 credit score with a 3.5% down payment.

Wells Fargo also maintains a different standard for home loans:

  • Home purchase loan: 620 minimum FICO score and three tradelines
  • Home refinance loan: 680 minimum FICO score and two tradelines

The above are the guidelines for most home loans. Wells Fargo may consider other factors such as your income and length of time at your current residence when determining your eligibility for refinancing or purchasing a home through its mortgage lending programs.

Can I get a home loan with a 500 credit score?

Yes, you can get a home loan with a 500 credit score. It will be harder to qualify than someone who has a 720+ but it’s not impossible. You’ll have to put more money down and pay for private mortgage insurance (PMI).

Currently, the government allows lenders to offer mortgages to borrowers with as low as a 580 credit score. That said, many lenders have lower minimums. Wells Fargo, for example, allows FHA loans to those with as little as a 500 credit score. That is a bit unusual since most lenders require at least 620 or 640.

How can I quickly raise my credit score?

Your credit score is one of the most important factors in your financial life. It can determine your borrowing rates for everything from credit cards to mortgages, and even your ability to rent an apartment.

So it’s no wonder that everybody wants to know how to raise their credit score quickly. Unfortunately, there’s no magic bullet for raising your score overnight. But there are a few things you can do that will increase your score within a few months.

1. Pay every type of bill on time.

Paying bills on time is the single biggest factor in determining your credit score. Late payments will show up on your credit report and ding your score, so if you have a payment that’s due, make sure it gets paid on time, every time. The best way to ensure this is to set up electronic bill pay, which will automatically pay all of your bills as they come due each month. This also makes it easier to be sure that you’re paying the right amount — if you get paper bills each month, you might accidentally overpay or underpay without realizing it.

2. Get credit for making utility and cell phone payments promptly.

Payment history is also affected by timely payments on noncredit accounts such as utilities and cell phone bills. So if you make all of your payments on time, this will be reflected in your payment history.

3. Pay off debt and keep balances low on credit cards.

A large per cent of your total available credit used at any given time will affect your credit score negatively, so try to keep the amount of money that you owe low compared to the amount of money that you are able to spend using credit cards wisely.

4. If you need to apply for new credit accounts, then do so.

It’s a good idea to keep only one or two open at any given time, but if you’re in a financial pinch, you need to pay some of your bills and can’t qualify for a loan right away, then take out a small secured line of credit to help you get through the rough patch.

5. Don’t close the unused credit cards that are sitting in your drawer gathering dust.

These are actually valuable from a scoring perspective because they demonstrate your overall credit history length. The longer your credit history, the better off you are from a scoring perspective.

Conclusion

If you are not happy with your credit but want to purchase a home or refinance your existing mortgage, you can still do that as long as you make a down payment. Wells Fargo comes out with a good deal for everyone, even if your credit score is 500. So if you need a loan and have a 500 credit score, apply now and they are ready to help you.

In this article, we discussed what is well Fargo 500 credit score home loan. We also shared the things you will have to face if you want to get well Fargo 500 credit score home loan. But before going for a Wells Fargo 500 credit score home loan you may boost your credit score.