Industry News

Wells Fargo launches 10-year adjustable-rate home loan

Mortgage product has interest-only feature

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A new home loan product from Wells Fargo Home Mortgage could help home buyers looking to increase their short-term cash flow or who intend to move or refinance within a few years.   The company is launching an interest-only feature that doesn't require principal payment for a period of 10 years. Wells Fargo Home Mortgage's interest-only product was previously available only on 5- and 7-year adjustable-rate mortgages, or ARMs for short.   Interest-only mortgages can be used for purchase or refinance transactions and allow home buyers to make payments of "interest only" during the fixed-rate period of the ARM -- five, seven or 10 years. After the interest-only period has ended, full principal and interest payments are required as the loan fully amortizes.   Home buyers and homeowners can make principal reductions during the interest-only period, but aren't required to do so, according to Wells.   Potential home buyers who may be suited for the interest-only feature...