Be ready with real estate financing options using securities-based borrowing

When the ability to act quickly in a competitive real estate market or make a timely renovation is an advantage, a convenient source of liquidity is essential. A securities-based line of credit can help you be ready for your next real estate decision. Most credit lines offer fast access to cash through online payments and checks, and funds can be used for almost any purpose except buying more securities or paying down margin loans.¹

1. Preserve Your Investment Strategy
   Avoid liquidating appreciated assets, which could trigger capital gains taxes and disrupt long-term plans. Your portfolio continues to work for you while you access liquidity.
2. Speed and Negotiating Power
   Approval is generally faster than traditional mortgages, with minimal paperwork and no application or origination fees. This positions you as a “cash buyer,” strengthening offers in competitive markets, while giving you more time to secure a mortgage in the future.
3. Cost Efficiency
   With no origination fees and interest charged only on drawn amounts, securities-based borrowing can be attractive for short-term needs like bridge financing between home sales. Monthly interest is added to the outstanding credit line balance, which offers payment flexibility for cash flow management.

• Primary or Vacation Home Purchase: Securities-based borrowers can position themselves as “cash-ready” buyers, enabling competitive offers without waiting for mortgage approval.
• Bridge Financing: Ideal for covering gaps between selling one property and buying another or awaiting a bonus or liquidity event.
• Property Renovations: A securities-based line of credit can provide immediate access to funds for remodeling projects, helping you start upgrades without waiting for cash flow or loan approvals.

While securities-based borrowing offers convenience, it also carries risks:

• Market Volatility: If pledged securities that support an outstanding balance decline in value, lenders may issue a maintenance call requiring additional collateral or repayment. Failure to meet these demands by certain deadlines can result in forced liquidation of assets.
• Variable Interest Rates: Most securities-based lines of credit have variable rates, which can increase borrowing costs if interest rates rise.
• Overleveraging: Using investment assets as collateral introduces leverage risk, which can amplify financial stress during downturns.

Connect with a Wells Fargo Advisors financial advisor to discuss whether securities-based borrowing aligns with your financial objectives.

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¹ Credit Line proceeds may not be used to purchase or carry margin stock or pay down a margin account debit. Please refer to the Wells Fargo Bank Priority Credit Line Agreement and Account Terms and Conditions for additional restrictions on the use of proceeds.

Securities-based lending has special risks and is not appropriate for everyone. If the market value of a client’s pledged securities declines below required levels, the client may be required to pay down the line of credit or pledge additional eligible securities in order to maintain it, or the lender will require the sale of some or all of the client’s securities. Wells Fargo Advisors, on behalf of Wells Fargo Bank, N.A., will attempt to notify clients of maintenance calls but is not required to do so. Clients are not entitled to choose which securities in their accounts are sold. The sale of their securities may cause clients to suffer adverse tax consequences. Clients should discuss the tax implications of pledging securities as collateral with their tax advisors. An increase in interest rates will affect the overall cost of borrowing. All securities and accounts are subject to eligibility requirements. Clients should read all Wells Fargo Bank Priority Credit Line documents carefully. The proceeds from the Wells Fargo Bank Priority Credit Line may not be used to purchase or carry margin stock or pay down a margin account debit (talk to your financial advisor about additional restrictions on the use of proceeds). Margin stock is defined in Regulation U and includes, principally: (1) stocks that are registered on a national securities exchange or any over-the-counter security designated for trading in the National Market System; (2) debt securities (bonds) that are convertible into a margin stock; and (3) shares of most mutual funds. Securities held in a retirement account cannot be used as collateral to obtain a securities-based loan. Securities in a Wells Fargo Bank Priority Credit Line collateral account must meet collateral eligibility requirements.

Wells Fargo Bank Priority Credit Lines are offered by Wells Fargo Bank, N.A. as the lender, in partnership with Wells Fargo Clearing Services LLC as agent, servicer and intermediary holding the collateral accounts.

There are conflicts of interest when Wells Fargo Advisors recommends that you use a loan secured by your Wells Fargo Advisors account assets as collateral. Wells Fargo Advisors and its Financial Advisors have a financial incentive to recommend the use of securities-based lending products rather than the sale of securities to meet client liquidity needs. Financial Advisors will receive compensation on the outstanding loan balance in your Wells Fargo Bank Priority Credit Line account. In addition, your Financial Advisor’s compensation will be reduced if your interest rate is discounted below a certain level. There is an incentive for Financial Advisors to recommend the Wells Fargo Bank Priority Credit Line and other securities-based lending products, such as Margin, as well as an incentive to encourage you to maintain a larger loan balance and to discourage interest rate discounts below a certain level. The interest you pay for the loan is separate from, and in addition to, other fees you may pay related to the investments used to secure the loan; such as ongoing investment advisory fees (wrap fees) and fees for investments such as mutual funds and exchange traded funds, for which Wells Fargo Advisors and/or our affiliates receive administrative or management fees or other compensation. Specifically, Wells Fargo Advisors benefits if you draw down on your loan to meet liquidity needs rather than sell securities or other investments, which would reduce our compensation. When assets are liquidated pursuant to a maintenance call or demands for repayment, Wells Fargo Advisors and your Financial Advisor also will benefit if assets that do not have ongoing fees (such as securities in brokerage accounts) are liquidated prior to, or instead of, assets that provide additional fees or revenues to us (such as assets in an investment advisory account). Further, different types of securities have higher release rates than others, which can create a financial incentive for your Financial Advisor to recommend products, or manage the account, in order to maximize the amount of the loan.

Wells Fargo Bank, N.A. has a lien on the account assets that are used as collateral for the Wells Fargo Bank Priority Credit Line. We will act to protect ourselves as the lender in connection with the loan and this may be contrary to your interests and/or investment objectives. This lien also creates a conflict of interest with respect to the recommendations your financial advisor makes to you. For example, your financial advisor may recommend that you allocate your investments to your collateral account pledged for the loan rather than to another account that is not pledged. Also, your financial advisor may recommend an investment solely to minimize the risk of loss with respect to the collateral.

Wells Fargo Bank, N.A. is a bank affiliate of Wells Fargo & Company. Bank products and services are available through Wells Fargo Bank, N.A. Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, and Wells Fargo Advisors Financial Network, LLC, Members SIPC, registered broker-dealers and separate non-bank affiliate of Wells Fargo & Company.