Credit Card Helps Pay Down Your Mortgage!
As more Americans struggle to make payments on their homes, Wells Fargo & Co. is joining other lenders in introducing a credit card to help people pay down their mortgages faster.
The No. 2 U.S. mortgage lender’s Home Rebate card joins cards offered by Citigroup Inc., Bank of America Corp., GMAC and Countrywide Financial Corp., among other lenders, to help homeowners reduce mortgage principal. Wells Fargo described its card and its terms on its Web site.
Wells Fargo, the fifth-largest U.S. bank by assets, has largely avoided turmoil afflicting many mortgage lenders as homeowner delinquencies and defaults soar, especially among “subprime” borrowers with weak credit histories.
The card launch also comes as consumers face a blizzard of choices for so-called “rewards” cards.
“Everybody has a ‘hot button’ for rebates — for some, it’s airline miles, for others, it’s hotels or gas,” said Peter Ho, a Wells Fargo vice president, in an interview. “Our goal is to make sure our customers financially succeed.”
San Francisco-based Wells Fargo said it made $398 billion of residential real estate loans last year.
According to the bank’s Web site, the Home Rebate card lets customers reduce $1 of principal on their mortgages for every $100 they spend, with automatic reductions in $25 increments. Spending $15,000 would lower principal by $150, for example.
The Mortgage Bankers Association said that for the week ended March 30, the size of a typical U.S. home loan was $247,200, and the average rate on a 30-year fixed-rate mortgage was 6.13 percent.
According to a calculator on Wells Fargo’s Web site, a homeowner who takes out such a loan and spends $2,500 a month on the Home Rebate card would pay off the loan 16 months early, and save $24,192 over its life.
Total payments including interest would fall to $516,821 from $541,013.
The rate on card purchases and balance transfers ranges from 0 percent to 5.9 percent for six months, and thereafter from 14.9 percent to 25.5 percent, Wells Fargo said on its Web site. Some loans are not eligible, including “reverse” and “piggyback” mortgages, the bank said.
For More Information Click Here!