Wells Fargo has changed its requirements for new customers who want to refinance a jumbo mortgage. They now must bring at least $1 million in balances to the table. The previous amount was $250,000.
CNBC reports that the change was announced July 1 when Wells Fargo adjusted its lending guidelines that make it much easier for existing customers to refinance, while putting a much higher benchmark in place for new customers.
Wells Fargo is the largest U.S. mortgage lender, and it is facing pressure both from the Coronavirus pandemic and a Federal Reserve cap on its balance sheet. It had pulled back from the jumbo mortgage market in April as the pandemic took hold. Some of the bank’s mortgage personnel chafed at the move because they had to turn away refinance customers who were looking to take advantage of historically low mortgage rates.
In July, Wells Fargo eliminated the $250,000 requirement for existing customers, but pushed the requirement for new customers to $1 million if they wanted to refinance a jumbo loan. It can be satisfied with a combination of deposits or investment balances.
The bank also tightened its mortgage lending standards in the overhaul, which could potentially impact anyone applying for a home loan. The bank has lowered the size of the loans it will approve by five percent relative to the property’s value and boosted the amount of cash buyers need to have on hand after they’ve purchased a home.