About Bank of America Mortgage
Headquartered in Charlotte, North Carolina, Bank of America is one of the largest banks in the U.S. and offers a range of banking products, such as checking and savings accounts and certificates of deposit (CDs). Customers can also use Bank of America for financing through various cash-back credit cards, personal loans and home and auto loans.
- Competitive rates
- 100% online application
- Discounts and perks for current customers
- Online and in-person loan specialists
- Best rates available only to Preferred Rewards members
- No rate check without a hard credit inquiry
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Rates
Bank of America generally publishes starting mortgage rates for conventional loans on its website daily. For rates based on your individual situation, you can apply for preapproval on the company’s website or contact a loan officer for a customized quote.
Over the past several years, Bank of America’s average rate on home purchase loans has been consistently lower than the national average. In 2021 according to Home Mortgage Disclosure Act data, its average rate of 2.59% was nearly half a percentage point lower than the national average of 3.07%.
Bank of America average home purchase rate vs. national average
Year | Difference from national average |
---|---|
2021 | -0.48% |
2020 | -0.22% |
2019 | -0.57% |
Mortgage rates change frequently and vary based on your loan term, credit history and mortgage type. Also, keep in mind the differences between an interest rate and an annual percentage rate (APR):
- An interest rate is the cost of borrowing, expressed as an annual percentage of the total amount borrowed. It doesn’t include additional fees, like origination fees or discount points.
- An APR includes these charges, so it tends to better reflect the total cost of the loan.
With mortgage rates rising in 2022, adjustable-rate mortgages (ARMs) are becoming more popular among borrowers. This is because ARMs typically have lower starting rates than fixed-rate mortgages. An ARM might make sense if you plan to sell your home (or refinance) before the rate resets.
Application process
Bank of America offers an online application that lets you begin the mortgage process from anywhere. You can start the pre-qualification process by answering a few questions and authorizing a credit check. Be prepared to provide information about your income and assets; Bank of America uses these details to estimate how much you can borrow.
Once you’re pre-qualified, you can move forward with preapproval. For this, you need to upload financial documentation (like W-2s and bank statements) to Bank of America’s online Home Loan Navigator tool. Once the lender has all the necessary documents, you should receive a preapproval decision within 10 business days.
Bank of America Mortgage application features
Features | Availability |
---|---|
Online application | |
Mobile document upload | |
Physical branches | 37 states |
Publishes minimum rate on website | |
Rate lock | Varies by state (45 days for purchase; 60 days for refinance) |
Pre-qualification (no hard credit pull) | X |
Certified approval letter |
Loan types
Bank of America offers a variety of mortgage products online, including conventional loans and government-backed loans (like FHA and VA loans). You can also refinance your existing home loan with Bank of America. The company offers flexible loan terms, including 15-year, 20-year and 30-year fixed-rate options. It also offers ARM loans.
In 2021, Bank of America ended up closing on around 58% of the home mortgage applications it received. A little more than 14% of applications were denied, and 2% of applicants had their preapproval denied.
Loan applications for home purchases only by year
2021 | 2020 | 2019 | |
---|---|---|---|
Home purchase applications | 79,480 | 79,812 | 112,411 |
Home purchase loans closed | 45,756 | 47,302 | 68,703 |
Home purchase applications denied | 11,476 | 11,161 | 12,615 |
Home purchase preapprovals denied | 1,650 | 1,258 | 1,630 |
Refinancing
In 2021, a majority of the mortgages Bank of America originated were for refinancing and cash-out refinances, while a bit over one-quarter were purchase loans. This isn’t unusual for 2021; 35.7% of reported U.S. mortgage loans were used for home purchases last year, while 37.9% were used for refinancing and 19.9% were for cash-out refinancing, according to 2021 Home Mortgage Disclosure Act (HMDA) data.
Refinancing may be the right decision for you if rates have gone down or you want to tap into your home equity.
Home purchase vs. refinance loans by year
2021 | 2020 | 2019 | |
---|---|---|---|
Home purchase loans | 27.68% | 26.51% | 33.09% |
Refinance loans | 43.25% | 42.93% | 28.48% |
Cash-out refinance | 12.29% | 11.63% | 12.06% |
HELOC and home equity loans
If you’re already a homeowner, you might be looking to cash in on the equity you’ve built in your current home with a second mortgage. You might consider taking out a HELOC from Bank of America. Bank of America home equity loans have no application fees, no closing costs and no annual fee. It takes about 15 minutes to apply online, according to the company.
Requirements
Both conventional and government-backed loans have their own sets of requirements to determine eligibility and how much you can borrow. Conventional loans typically require a higher credit score and down payment than you need for a government-backed mortgage.
Bank of America doesn’t disclose many of its loan requirements. However, most lenders require a credit score of 620 to be eligible for a conventional loan. FHA loans require a credit score of at least 500 to 580, and jumbo loans typically require higher credit scores — at least 680. The company does state that a conventional loan may require a 3% down payment, while VA loans have no down payment requirements.
With respect to debt-to-income ratio, most lenders look for a ratio of 36% or lower for conventional loans. Although the company doesn’t disclose a maximum DTI ratio on VA loans, the Department of Veterans Affairs sets 41% as a benchmark.
Bank of America does not currently offer USDA loans. For more information on USDA loans, read our guide for selecting the best USDA-approved lenders.
National mortgage requirements by type
Min. credit score | Min. down payment | Compare with other lenders | |
---|---|---|---|
Conventional | Typically 620 | Typically 3% | Mortgage lenders |
FHA | 500 | 3.5% with 580 credit score | FHA lenders |
VA | Set by lender (often 580) | 0% | VA lenders |
Cost and fees
Bank of America charges an origination fee, but this fee can vary. You can expect to pay between 0.5% and 1% of the loan amount in origination charges as part of your closing costs. In general, you should plan to spend between 3% and 5% of your loan amount in closing costs on top of your down payment.
The company offers discounts on origination charges for certain customers. For example, members of the Preferred Rewards program may qualify for a discounted origination fee, depending on their program tier. Discounts range from $200 to $600.
FAQ
How does Bank of America Mortgage work?
To pre-qualify for a Bank of America mortgage, visit its website and fill out the pre-qualification application to see how much you’re eligible to borrow. If you’re already pre-qualified, complete the loan application to pursue a Bank of America mortgage. Along with other financial documents, you need to provide:
- Proof of income
- Tax returns
- Credit history
Is Bank of America Mortgage legit?
Bank of America Mortgage is a reputable lender that offers multiple types of mortgage loans, including refinance loans and HELOCs. If you’re searching for a lender with comprehensive online services and widespread branch locations, Bank of America Mortgage could be the right lender for you.
Where is Bank of America Mortgage available?
Bank of America mortgage loans are available in all 50 states. The company has over 4,000 across nearly 40 states.
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- 4,606,585 reviews on ConsumerAffairs are verified.
- We require contact information to ensure our reviewers are real.
- We use intelligent software that helps us maintain the integrity of reviews.
- Our moderators read all reviews to verify quality and helpfulness.
Sources
- NMLS Consumer Access, “ Bank of America .” Accessed July 19, 2022.
- Federal Financial Institutions Examination Council, “ HMDA Data Publication .” Accessed July 18, 2022.
