Bank of America offers digital tools, personal service and products for buying a home, refinancing your current mortgage or tapping into your home’s equity.
Learn more about its financial services in this Bank of America mortgage review.
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Who’s Bank of America for?
Many home buyers can benefit from working with Bank of America. It’s 1 of the best lenders for first-time home buyers due to its Affordable Loan Solution mortgages and readily-available personal service.
It’s also a good fit if you want a better mortgage rate or access to your home equity.
Bank of America doesn’t offer USDA loans. It also only offers its Preferred Rewards discounts to borrowers who keep an average balance of $20,000 or more.
Bank of America offers loans for buying and refinancing a home and home equity lines of credit. Take a look at our breakdown of its most popular mortgage products.
Home Purchase Loans
Bank of America’s home purchase loans include:
- Conventional mortgages, which aren’t affiliated with a government program. These mortgages may have higher credit score requirements than other types of mortgages. Conventional mortgages can be conforming or non-conforming. Conforming mortgages meet the requirements of Fannie Mae and Freddie Mac, which are private companies started by Congress to help stabilize the housing market. Non-conforming mortgages don’t meet those requirements.
- FHA loans are insured by the Federal Housing Administration. These mortgages have low down payment and low credit score requirements.
- VA loans are insured by the Department of Veterans Affairs. These loans are for veterans and current service members who meet service requirements. Borrowers who qualify may not need to make a down payment. These loans also have flexible credit requirements.
- Jumbo loans are loans for borrowers who are buying a home that costs more than the purchase price limits set by Freddie Mac and Fannie Mae. The price limit set is $510,400 in most areas, so loans beyond that are considered jumbo loans.
- Affordable Loan Solution and Freddie Mac Home Possible mortgages offer a 3% down payment. Both of these loans have income and loan amount limits. The Affordable Loan Solution Mortgage doesn’t require you to purchase mortgage insurance, which is a significant savings.
Refinance loans replace your current mortgage with a new loan. Bank of America offers conventional, FHA and VA refinance loans. If you qualify, you may be able to use a Bank of America refinance loan to:
- Improve your mortgage terms. Many homeowners refinance to change the terms of their mortgage. You might refinance for a lower monthly payment or a lower interest rate. You can also refinance to pay off your home sooner or to switch from a loan with an adjustable rate (a rate the lender can change) to a fixed interest rate (the interest rate never changes).
- Get cash. You can also refinance for more than you owe. Let’s say you owe $100,000 on your mortgage. You apply for a cash-out refinance of $125,000. Bank of America approves you and pays off your loan balance. You receive $25,000 as cash and now have a $125,000 mortgage.
Home Equity Line of Credit
A home equity line of credit allows you to borrow against your home’s equity. Your home equity is the difference between the amount your home is worth and the value of your home. Let’s say you own a home that’s worth $175,000. You owe $100,000 on your mortgage. That means you have $75,000 in equity.
Bank of America offers a home equity line of credit (HELOC). A HELOC works a bit like a credit card in that you’re approved for a credit line. You borrow as much as you need up to the maximum. You don’t have to borrow money right away, and you can typically borrow multiple times as long as you don’t exceed your credit line.
HELOCs have 2 phases — a draw period and a repayment period. Your draw period is when you borrow money, and it typically lasts 10 years. You begin repaying your line of credit as soon as you borrow money. After 10 years, your repayment period starts. You can no longer borrow money and continue to repay what you borrowed.
Bank of America takes an average of 45 days to close on a home loan. Why does it take so long? The mortgage process has several steps involved.
It starts when you submit your application. After that, you’ll typically order a home inspection. A home inspection is when a professional looks at your home and advises you as to whether any repairs are needed.
Bank of America will review the information in your application. You may need to answer questions or provide additional documentation. You’ll also need to buy homeowners insurance. Bank of America will usually order an appraisal to assess the value of your home.
Once it’s gathered all your information, Bank of America will let you know whether you’ve been approved. You’ll set a time to sign your loan documents and pay any funds due.
Your credit score is a critical part of the mortgage process. It sums up your credit history for lenders and represents how you handle credit. Lenders have a minimum credit score for all borrowers. They also use your credit score to decide what interest rate to offer you.
Bank of America requires a credit score of 620 or higher. From there, it considers your credit score along with other factors to decide on your mortgage rate.
When you apply for a Bank of America mortgage, you’ll need to provide several documents. You’ll need:
- 2 years of W-2s
- Pay stubs from the past 30 days
- 2 months of statements from your bank and investment accounts
- 2 years of tax returns
- A copy of your purchase agreement
If you’re self-employed, you’ll also need to provide your business tax returns. You may be asked to provide additional documentation based on your situation.
You have a few options to get in touch with customer service. You can visit a local branch office or schedule an appointment with a loan officer using the Bank of America website. This option allows you to provide some details about what you want to discuss.
You can also call Bank of America at 866-466-0979. Its representatives are available from 8 a.m. to 10 p.m. ET Monday through Friday and from 8 a.m. to 6:30 p.m. ET on Saturday.
Bank of America’s Home Loan Navigator lets you track your home loan through its website or mobile app. You can sign and submit documents for the loan and view the next steps in the process.
Is a Bank of America Mortgage Right for You?
Bank of America might be right for you if you value being able to walk to a branch and talk to a person about your home loan. Its mobile app also makes it an excellent fit for borrowers on the go.
Bank of America is 1 of the best mortgage companies for current homeowners. It offers a range of refinancing options along with HELOCs so you can improve your terms or tap into your equity.
If you tend to keep $20,000 or more in your bank accounts, you also might want to consider Bank of America for its preferred rewards program. It offers up to $600 off origination fees and up to 0.375% off HELOC interest rates along with other banking perks.
With a variety of services for first-time and current homeowners, Bank of America can offer you personal, tailored service.
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