New mortgage program aims to fulfill more American dreams
Streamlined, flexible, potentially more affordable: yourFirst Mortgage aims to bring the American dream of homeownership to generations now and in the future.
June is national Homeownership Month, which focuses on the value of homeownership in the U.S.
It’s no secret that owning your own home is still a key part of the American dream — a fact that transcends both economic ups and downs and changing personal circumstances.
For millions of prospective first-time homebuyers, however, that dream seems out of reach these days, obscured by financial pressures, complexities, and uncertainties about exactly what it takes to buy a home in this current economic environment.
Wells Fargo is taking a major step to reach those consumers by clearing the way for qualified buyers — first-time or otherwise — to get the best possible conventional loan features in a simple, customer-focused loan that we call yourFirst MortgageSM.
The demand for this type of mortgage is clear, and the desire for homeownership, unmistakable. About 65 percent of respondents in a Wells Fargo survey* said they firmly believe that homeownership is an achievement to be proud of.
And as research from the real estate community has shown again and again, homeownership plays an important role in strengthening communities and building consumers’ assets.
Today, several demographic realities are becoming evident:
- There is a wave — larger than the baby boomer generation — of millennial homebuyers who are likely to pursue buying a home over the next 10 to 15 years. Much has been made in the popular media about the unique nature of this group, but early indications are that they may not be drastically different from previous generations when it comes to valuing homeownership.
- At the same time, as minority populations have grown in the U.S., we are seeing increased interest in homebuying among consumers from a variety of financial profiles. First-time, move-up, or ready-again homebuyers are looking for affordable, sustainable solutions to homeownership, but in many cases they are not sure where to turn for advice and information about qualifying credit criteria.
- And Latino Americans — already the largest U.S. minority group — are poised to lead the U.S. housing market into the future, generating 40 percent of first-time homebuying by 2020, according to research by the National Association of Hispanic Real Estate Professionals Foundation (Hispanic Wealth Project).
We also know that the increased use of mobile phones, tablets, and other devices has driven consumer demand for simplicity, clarity, and ease-of-use in purchasing products or services, even when shopping for a mortgage. Yet consumers face an array of conventional loan products, including some lower down payment options with rules that are so complex they may actually discourage homebuying, rather than encourage it.
As a result, many potential homebuyers are locked into paying high rental rates, have limited ability to save money, and are missing out on the benefits of homeownership, such as civic participation and asset creation.
“Wells Fargo aims to break the homeownership logjam . . . simplifying the guidelines and removing barriers.”
With yourFirst Mortgage, Wells Fargo aims to break the homeownership logjam for these consumers — simplifying the guidelines and removing barriers that until now have stood in the way of buying a home.
This fully documented, fully underwritten, new home loan combines some of the best features of previous affordable homebuying programs, such as low down payment options and other incentives. Wells Fargo has also added a 1/8th of a percent interest-rate reduction for consumers who voluntarily complete a homebuyer education course with a certified HUD counseling agency. yourFirst Mortgage also complements our yourLoanTrackerSM service to help streamline the application process for interested buyers.
For example, with yourFirst Mortgage, credit history is expanded to include nontraditional sources, like tuition, rent, or utility bill payments. In their application for a fixed-rate mortgage, they can also include income of family members, renters, and others who will live in the house. Wells Fargo is among the first of the major home lenders to have such flexibility in a single loan program.
In developing yourFirst Mortgage, our main goal was to create something that meets the customer’s need for simplicity, clarity, and affordability in a mortgage. And the educational feature benefits customers by helping them better understand the purchase process and the factors that lead to sustainable homeownership.
Ultimately, we want the dream of homeownership to be more than just a dream, especially for the millions of hardworking families who have never been able to own a home. We believe yourFirst Mortgage can be the vehicle to make that happen.
*2015 “How America Views Homeownership” survey by Wells Fargo & Company and Ipsos Public Affairs. 2016 survey to be released June 14, 2016.