Do you feel like you're paying more than you need to on your Wells Fargo mortgage? Perhaps you've built up significant equity in your home, or you simply prefer to manage your property taxes and homeowners insurance directly. If so, cancelling your escrow account with Wells Fargo might be a path you're considering. While it offers more control over your finances, it's crucial to understand the implications and the precise steps involved. This comprehensive guide will walk you through everything you need to know to successfully cancel your escrow account with Wells Fargo.
Understanding Your Escrow Account
Before we dive into the "how-to," let's quickly recap what an escrow account is. For many homeowners, an escrow account is a standard part of their mortgage. It's a special account managed by your lender (in this case, Wells Fargo) where a portion of your monthly mortgage payment is held to cover your property taxes and homeowners insurance premiums. When these bills are due, Wells Fargo pays them on your behalf from this account.
While convenient, an escrow account means you're essentially letting your lender manage a significant chunk of your funds, and you don't earn interest on that money in most states. Cancelling it means taking on the responsibility of tracking and paying these large, periodic bills yourself.
Ready to take control? Let's get started!
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| How To Cancel Escrow Account With Wells Fargo |
Step 1: Assess Your Eligibility and Readiness – The Crucial First Check!
This is where you, the homeowner, come in! Before you even think about picking up the phone, you need to honestly evaluate if cancelling your escrow account is the right move for you, and if you meet Wells Fargo's specific criteria.
Tip: Take mental snapshots of important details.
- Do you meet the equity requirements? Most lenders, including Wells Fargo, typically require a significant amount of equity in your home to waive escrow. This often means your Loan-to-Value (LTV) ratio needs to be 80% or lower, meaning you owe 80% or less of your home's current value. For example, if your home is worth $300,000, you'd likely need to owe $240,000 or less on your mortgage.
- Tip: You might need a recent appraisal to demonstrate your current home value. Wells Fargo may have its own appraisal requirements or rely on the initial LTV from your loan.
- Have you had a good payment history? Lenders are more likely to approve an escrow waiver if you have a consistent history of on-time mortgage payments. Any recent delinquencies could hinder your request.
- Is your loan type eligible? Certain loan types, like FHA loans, often require an escrow account for the life of the loan. If you have an FHA loan, you might need to refinance to a conventional loan to remove escrow. VA loans and USDA loans also have specific requirements.
- Are you prepared for the financial responsibility? This is a big one! When you cancel escrow, you become solely responsible for budgeting for and paying your property taxes and homeowners insurance directly. These are often large, lump-sum payments due annually or semi-annually.
- Consider: Can you reliably set aside money each month to cover these expenses? Do you have a system for tracking due dates? Missed payments can lead to penalties, liens, or even foreclosure.
- Are there any fees? Some lenders may charge an "escrow waiver fee." Be sure to inquire about this upfront.
If you've gone through these points and feel confident, proceed to the next step!
Step 2: Gather Necessary Information and Documents
Once you're confident in your eligibility, it's time to get organized. Having all your information readily available will make the process smoother and faster.
- Your Wells Fargo Mortgage Account Number: This is essential for any communication with them. You can usually find it on your mortgage statements.
- Proof of Home Equity: While Wells Fargo might have its own appraisal requirements, having a recent appraisal report or a clear understanding of your current home value and outstanding mortgage balance will be beneficial for your discussions.
- Property Tax Statements: Have your most recent property tax bills readily available. This will help Wells Fargo understand the amounts they've been paying on your behalf.
- Homeowners Insurance Policy Declarations Page: This document outlines your insurance coverage, policy number, and premium amounts. Wells Fargo will need this to verify your current insurance payments.
- Any other relevant loan documents: Review your original mortgage agreement. Some loan documents explicitly state the terms and conditions regarding escrow accounts.
Step 3: Initiate Contact with Wells Fargo Home Mortgage
This is where you directly engage with Wells Fargo. The best way to start this process is by calling their dedicated Home Mortgage Customer Service.
- Call Wells Fargo Home Mortgage Customer Service: The primary number for Wells Fargo Home Mortgage Customer Service is 1-866-234-8271.
- Hours of Operation:
- Monday – Friday: 7:00 am - 10:00 pm Central Time
- Saturday: 8:00 am – 2:00 pm Central Time
- Hours of Operation:
- Clearly State Your Intent: When you connect with a representative, clearly state that you wish to cancel your escrow account for your mortgage.
- Be Prepared to Answer Questions: The representative will likely ask you questions about your reasons for wanting to cancel escrow, your financial readiness, and your understanding of the responsibilities involved.
- Request Information on Escrow Waiver Requirements: Even if you've done your research, confirm Wells Fargo's exact requirements for escrow cancellation, including:
- Minimum LTV percentage.
- Required credit score (if any).
- Any specific forms or documentation needed.
- Any associated fees for waiving escrow.
- The typical processing time.
Step 4: Submit Required Documentation
Based on your conversation with Wells Fargo, you'll likely need to submit formal documentation.
QuickTip: Reading carefully once is better than rushing twice.
- Follow Wells Fargo's Instructions Precisely: They will inform you of the exact documents they require and how they prefer them to be submitted (e.g., mail, fax, online portal).
- Common Documents (as mentioned in Step 2):
- Proof of adequate home equity (e.g., recent appraisal).
- Proof of current homeowners insurance.
- Proof of up-to-date property tax payments (if you've been paying them directly for a period).
- A formal request letter for escrow cancellation (if they don't have a specific form).
- Keep Copies of Everything: Make copies of all documents you send to Wells Fargo and keep them for your records. This includes any forms, letters, and proof of mailing or faxing.
- Note Down Reference Numbers: If you are given a case or reference number for your request, write it down. This will be invaluable for follow-up.
Step 5: Follow Up and Confirm Cancellation
The process isn't over until you have confirmation!
- Allow Processing Time: Wells Fargo will need time to review your request and documents. Ask the representative in Step 3 for an estimated timeframe.
- Regularly Check Your Account and Mail:
- Online Account: Monitor your Wells Fargo online mortgage account for any updates or changes to your monthly payment.
- Mail: Keep an eye out for official letters from Wells Fargo confirming the escrow cancellation and detailing your new mortgage payment schedule (which will no longer include the escrow portion).
- Confirm with a Representative: If you don't hear back within the stated timeframe, call Wells Fargo Home Mortgage Customer Service again, referencing your case number. Confirm that the escrow account has been officially closed and that your future mortgage payments will reflect this change.
- Understand Your New Payment: Once escrow is cancelled, your monthly mortgage payment will decrease. However, remember that you are now responsible for directly paying your property taxes and homeowners insurance.
Step 6: Set Up Your Own System for Tax and Insurance Payments
This is perhaps the most critical step once escrow is cancelled! The responsibility shifts entirely to you.
- Create a Dedicated Savings Plan: Determine the annual cost of your property taxes and homeowners insurance. Divide this by 12 and set up a separate savings account where you deposit this amount each month. This ensures you have the funds ready when the large bills arrive.
- Mark Due Dates on Your Calendar: Note down the exact due dates for your property taxes and homeowners insurance premiums. Set multiple reminders (digital and physical) to ensure you don't miss them.
- Consider Auto-Pay Options: If your local tax authority or insurance provider offers automatic payment options, consider enrolling to avoid late fees.
- Keep Excellent Records: Maintain detailed records of all your tax and insurance payments, including dates, amounts, and confirmation numbers.
Frequently Asked Questions (FAQs)
Here are 10 common "How to" questions related to cancelling an escrow account with Wells Fargo:
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How to Know if I'm Eligible to Cancel Escrow with Wells Fargo?
You are typically eligible if you have at least 20% equity in your home (80% LTV or lower), a good payment history, and a loan type that allows for escrow waivers (FHA loans, for example, usually require escrow).
Tip: Avoid distractions — stay in the post.
How to Find My Wells Fargo Mortgage Account Number?
Your mortgage account number can be found on your monthly mortgage statements, online banking portal, or by calling Wells Fargo Home Mortgage Customer Service.
How to Contact Wells Fargo to Discuss Escrow Cancellation?
Call Wells Fargo Home Mortgage Customer Service directly at 1-866-234-8271.
How to Calculate My Home Equity for Escrow Waiver?
Your home equity is your home's current market value minus your outstanding mortgage balance. You may need a recent appraisal to determine the current market value.
How to Determine the Property Tax and Insurance Amounts I'll Need to Pay After Cancelling Escrow?
Refer to your most recent property tax bills and homeowners insurance policy declarations page. Wells Fargo can also provide you with a year-end escrow analysis statement showing the amounts they paid on your behalf.
Tip: Revisit this page tomorrow to reinforce memory.
How to Avoid Missing Property Tax or Insurance Payments After Escrow Cancellation?
Set up a dedicated savings plan, mark due dates on your calendar with multiple reminders, and consider enrolling in auto-pay with your tax authority and insurance provider if available.
How to Handle an Escrow Shortage if I Cancel My Account?
If there's an escrow shortage when you cancel, Wells Fargo will inform you. You may need to pay this amount directly or have it added to your outstanding loan balance (though the latter is less common when proactively cancelling).
How to Understand the Impact on My Monthly Mortgage Payment After Escrow Cancellation?
Your monthly mortgage payment will decrease because the portion allocated to taxes and insurance will be removed. However, you will then be responsible for paying those bills separately.
How to Re-establish an Escrow Account with Wells Fargo if I Change My Mind?
While possible, it's generally more difficult to re-establish an escrow account once cancelled. You would need to contact Wells Fargo and meet their current requirements, which may involve fees or a new application process.
How to Get Confirmation from Wells Fargo that My Escrow Account Has Been Cancelled?
Wells Fargo should send you a formal letter confirming the cancellation and detailing your new payment schedule. You can also confirm by checking your online mortgage account or calling customer service after the typical processing time.
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