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Wells Fargo Closing Guarantee Review


Wells Fargo, which has been the top residential mortgage lender for five consecutive quarters, offers several incentives to those who choose to close their mortgage with the bank.

One such program is the “Wells Fargo Closing Guarantee,” which is essentially a promise they’ll close your loan on or before the closing date stated in your original purchase contract.

After all, you won’t want to sleep in a hotel, or worse, the moving truck…

But if, for some reason, Wells Fargo is unable to close on or before that date, you’ll get a check equal to your first month’s principal-and-interest mortgage payment.

Not a bad deal, right?

Well, there is some fine print you should be aware of.

First, you must provide Wells Fargo with a copy of the original purchase contract and all required documentation within 48 hours of submitting a complete loan application.

Additionally, the loan must be locked and all loan requirements and conditions must be met at least 10 business days prior to the set closing date.

The guarantee is not valid if you change loan programs or terms, if you don’t specify a closing date, move up the closing date, miss the closing date on your own actions (or a third party’s) or due to inclement weather, if applicable law or investor requirements impose a required waiting period prior to closing, or if you commit fraud.

The Wells Fargo Closing Guarantee is only good for purchase money mortgages (including purchase money home equity lines of credit), and excludes refinance loans, non-purchase money second mortgages, and mortgage broker-originated loans.

Wells Fargo & Company employees, along with their family members, are not eligible.

Assuming you qualify, you must continue to make mortgage payments (don’t assume they’ll pay it)!

Finally, the Wells Fargo Closing Guarantee may be reported to the IRS on a Form 1099-MISC, so you will likely be taxed on it as well.

The Verdict

It’s certainly not a bad deal if Wells Fargo happens to be providing you with the lowest mortgage rate and set of terms.

But it’s certainly not a reason to choose Wells Fargo over another lender that may be providing a lower rate and better terms.

And it sounds like something has to go horribly wrong for the guarantee to actually be paid out, especially with all the requirements that must be met.

So be sure to shop around and obtain several mortgage rate quotes before committing to one lender.

Tip: How to get the best mortgage rate?

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