As one of the largest mortgage lenders in the United States, Bank of America provides borrowers with online tools and resources to simplify the application process for a variety of mortgages. Bank of America is known for its competitive interest rates, flexible terms, and a commitment to helping customers achieve their homeownership goals.
Bank of America – Company Overview
Bank of America is best known for its traditional banking products, like checking and savings accounts, credit cards, and investing products. The company also offers various mortgages for first-time homebuyers and seasoned homebuyers across several states, including California, Florida, Texas, North Carolina, and New Jersey.
Pros
- More than 4,000 brick-and-mortar locations across the United States
- Services all 50 states
- Customer service available Monday through Saturday with extended hours
- Offers rate match guarantee
Cons
- Branches only available in 37 states
- No USDA Loans
Types of Loans: Conventional Loans, Jumbo Loans, FHA Loans, VA Loans, Doctor Loans
Minimum Down Payment: $0 (depending on loan type)
Minimum Credit Score: 620
Bank of America’s advanced website technology streamlines the home loan application process and helps homebuyers keep track of their mortgage and payments. The online platform includes a mortgage calculator, prequalification services, and personalized rate quotes, making it easier for you to compare loan products and terms, as well upload and manage essential documents. Homebuyers can prequalify for a mortgage, customize their mortgage terms, and apply for a loan using the convenient online portal.
Why We Like Bank of America Home Loans
Bank of America’s customer-centric focus makes it a top choice for many who are looking to buy a home or refinance. To assist with homeownership, Bank of America Mortgage offers a variety of home buying tools, including a home value estimator, home equity calculator, affordability calculator, and a closing costs estimator. Homebuyers can access these tools for free on the website to learn about mortgages and the financial aspect of owning a home.
As one of the best mortgage lenders, Bank of America’s competitors include:
- Freedom Mortgage
- Fairway Independent Mortgage Corporation
- Rocket Mortgage
- Better Mortgage
- Veterans United Home Loans
- Navy Federal Credit Union
- New American Funding
When unexpected events get in the way of homeownership, Bank of America also has options to help people make their payments and remain in their homes. Homeowners with a Bank of America mortgage can access home loan assistance and help with mortgage debt directly through the website. Counselors are also available to walk homebuyers through their options.
Types of Loans Offered By Bank of America
As one of the best mortgage lenders for homeownership, Bank of America Mortgage offers several types of home loans, including loans for doctors, jumbo loans, and FHA loans.
Fixed-Rate Mortgages
A fixed-rate mortgage is one type of conventional mortgage loan that’s among the most common for many homeowners. Fixed-rate mortgages have interest rates that do not change over the life of the loan, making it easier for homeowners to budget the costs of their mortgage. These loans are generally available in 15, 20, or 30-year terms.
Bank of America Mortgage typically requires a minimum 620 credit score and a maximum 43% debt-to-income ratio for a fixed mortgage. It’s also recommended to put down at least 20% of the purchase price. Without meeting this minimum, a homebuyer may need to pay private mortgage insurance. Mortgage insurance is an additional monthly payment a borrower makes to the lender to help secure their loan when they make a lower-than-average down payment.
Adjustable-Rate Mortgages
Like fixed-rate mortgages from Bank of America, an adjustable-rate mortgage requires homebuyers to have a minimum credit score of 620 and a maximum debt-to-income ratio of 43% in most cases.
These loans are another form of a conventional loan, but they have varying ARM rates that can affect monthly payments. The interest rate change can go up or down over time. However, due to the varying interest rate, these loans usually have a lower-than-average starting interest rate. Plus, the interest rate doesn’t move for a few years after buying the home. Therefore, they can be an affordable loan solution for homebuyers who don’t plan on staying in their home for more than a few years.
This type of mortgage loan may also require mortgage insurance if a borrower does not have a down payment of at least 20%.
Jumbo Loans
Jumbo loans are for larger-than-average home purchases. These loans cover homes that are outside of the conforming loan limits of conventional mortgages. For most areas in the United States, the conforming loan limit in 2023 is $726,200.
Jumbo loans from Bank of America Mortgage can have a fixed or adjustable interest rate. Borrowers generally need a higher credit score for jumbo loans than conventional loans, but they also can put down as little as 5% for a down payment if they’re willing to pay mortgage insurance.
Low Down Payment Mortgage
Bank of America Mortgage provides borrowers with a unique mortgage loan requiring as little as a 3% down payment to help more people get into the homes of their dreams. These loans are available through its Community Homeownership Commitment to assist buyers with moderate incomes, allowing them to finance up to 97% of the purchase price of the home with reduced-cost mortgage insurance.
Some homebuyers may be required to take a homebuyer education course to receive this loan. Qualifying buyers may be able to combine this mortgage with grant programs that help with down payment and closing costs to make their mortgage loan even more affordable. However, a minimum credit score of 620 may apply.
Doctor Loans
Bank of America’s doctor loans are mortgages for medical professionals who have high amounts of student debt and may, therefore, have challenges getting traditional mortgages. These loans have competitive mortgage rates and may exclude some or all of a borrower’s student loan debt to help them qualify.
Additionally, students who have proof of a medical job offer may be able to close on their loan before they actually start their job. This home loan requires as little as a 3% down payment, with up to a 15% down payment for homes costing $2 million or more. Although these loans generally have the best interest rates with credit scores of 700 or above, some borrowers may still qualify with a minimum credit score of 680.
FHA Loans
FHA loans are backed by the Federal Housing Administration (FHA). This type of mortgage is designed for homebuyers who need affordable housing, including low down payment requirements and modest interest rates.
Homebuyers using an FHA mortgage can typically qualify with a credit score as low as 500, but their down payment requirement may be higher. Those with a credit score of 580 and above may qualify for as little as a 3% down payment. FHA loans also look for borrowers with debt-to-income ratios of 43% or below. Borrowers must meet both FHA and Bank of America requirements, but your Bank of America lending specialist can help you determine whether you’re eligible.
VA Loans
VA loans are for veterans and service members who are eligible for these special loans through the U.S. Department of Veterans Affairs (VA). These home loans do not require a down payment for eligible borrowers, and homebuyers can typically qualify with lower-than-average credit scores of at least 580.
When determining if you qualify for a Bank of America VA loan, your lending specialist will review your income and debt. You’ll also need to have a Certificate of Eligibility (CoE) in hand from the VA that proves you’re eligible to get a VA loan based on the VA’s requirements. However, Bank of America still has the final approval on your loan.
Refinance Loans
Home refinancing can be a great financial decision by lowering your monthly payments and saving you money each month and over time. When you refinance your home, you’re essentially getting a new mortgage to pay off your old one. Usually, the new mortgage has a lower interest rate, a shorter term, or both to help you pay off your loan quicker or pay less interest. If you’re having payment difficulties with your current loan, a refinance loan may help you get back on track.
Bank of America Mortgage offers home refinancing loans for most homeowners. Whether you have an FHA loan, VA loan, or conventional loan, you may be able to refinance with Bank of America. The requirements for your refinance depend on what type of refinance loan you apply for, but you should generally expect to meet similar requirements as you did for your original mortgage. However, to get the lowest interest rates, you may need an excellent credit score, high income, and a low debt-to-income ratio.
Be prepared to pay closing costs for your refinance loan, just like you did your original mortgage. Closing costs usually vary based on the loan amount.
Home Equity Line of Credit
A home equity line of credit is a credit line based on the equity you’ve built up in your home. Say, for example, your mortgage was $400,000, but you’ve paid off $150,000 of the principal balance. That $150,000 is the equity you have in your home. A home equity line from Bank of America can range from $25,000 to $1,000,000.
Bank of America Mortgage considers your credit score for a home equity line of credit, but there’s no minimum qualifying score. Instead, your loan specialist will weigh your entire financial picture carefully, including your income, debts, and mortgage payment history, to determine your eligibility.
Home equity loan options from Bank of America have no annual fees or application fees, and you won’t need to pay closing costs for lines of credit less than $1,000,000.
How To Apply for a Bank of America Home Loan
Bank of America prequalifies buyers for a mortgage by reviewing their income information, credit history and credit score, and the likelihood that they can repay the loan. You can get prequalified by contacting Bank of America Mortgage.
Then, use your prequalification to shop for a home. Once you find the home you want to buy, contact Bank of America. A lending specialist will work with you to get further documentation needed for full approval and underwriting.
How To Contact Bank of America
Homebuyers seeking a new mortgage with Bank of America can call the company at 800-270-5746 Monday through Friday from 8 AM to 10 PM EST or Saturday from 8 AM to 6:30 PM EST. Current customers can log into their online banking accounts at any time to send a secure message to Bank of America Mortgage.
After the Loan Closes
After you receive your final loan approval, Bank of America will help you set up a closing appointment to close on your loan. You’ll need to bring a cashier’s check or prepare a wire transfer to pay closing costs during your closing appointment.
Bank of America Mortgage will let you know when your first payment is due. To pay, you can log into your online banking account and set up the checking or savings account you’d like to pay with. Customers can also call 800-669-6607 for additional payment options.
Is Bank of America Right for Me?
From its numerous types of home loans for specific interests and financial situations to its digital mortgage experience that helps people get into their ideal homes quickly, Bank of America Mortgage has several advantages for first-time or seasoned homebuyers. Helpful online tools, like the Home Loan Navigator, help simplify the homebuying process, regardless of the buying stage you’re in.
Still, buying a home is a significant part of your financial present and future. Therefore, we suggest comparing what Bank of America offers to other lenders to ensure that you get a mortgage, interest rate, and rewards that are right for you and your home. Consider calling Bank of America Mortgage to discuss your options as you navigate the home-buying process.
