Bank of America Mortgage of March 2023

Types of home loans

Bank of America has a set of mortgage programs for both first-time homebuyers and refinance loan options. You can compare the programs and decide on the right mortgage to take according to your needs.

You can get conventional, FHA, VA, and jumbo loans. The loan amounts go up to $5 million, and the minimum down payment is from 0% to 5%.

The fixed-rate mortgage terms are available for 30, 20, and 15 years. Adjustable-rate Bank of America mortgage terms are available for 10 years and 6 months, 7 years and 6 months, and 5 years and 6 months.

Home equity

This home loan allows the borrowers to get the sums against their home equity and use their house as collateral.

The interest rate is variable. For the first 6 months, you will get a 6.24% variable APR, and after that, your interest rate will be an 8.65% variable APR.

For signing up for an automatic monthly payment option, you get an interest rate reduction of 0.25%. For initial withdrawal, when you open the account, you get a 0.10% interest rate reduction for each $10,000 and up to a maximum of 1.50%. Bank of America Preferred Rewards Program members can receive an interest rate reduction of up to 0.625%.

The home equity has no application fee, no closing costs, and no annual fee. There are no closing costs, only on the lines of credit of up to $1,000,000. You can also convert your variable balance rate to a fixed-rate loan.

Mortgage

When you take out a mortgage, you have three loan options. The interest rate and payments depend on whether the rate is changeable and for how long you take out a loan.

For a 30-year fixed-rate mortgage, you get an interest rate of 6.250% and an APR of 6.483%. For a 15-year fixed-rate mortgage, you get an interest rate of 5.5% and an APR of 5.899%. For 5 years and 6 months variable ARM, you get an interest rate of 5.75% and an APR of 6.64%.

ARMs can increase after the fixed-rate period. It will be 5 years for 5 years and 6 months mortgage, 7 years for a 7 years and 6 months mortgage, and 10 years for 10 years and 6 months mortgage.

For example, for a home purchase price of $250,000 and a down payment of $50,000, and ZIP code 95464 (ZIP code for Lake County, California), the monthly payment on a 30-year mortgage will be $1,231.

Mortgage refinance

Bank of America mortgage refinance program allows you to lower your monthly payment and pay back your mortgage faster.

The refinance rates are the same as for the mortgage for first-time homebuyers. There are options to refinance a fixed-rate loan, adjustable-rate mortgage, FHA loan, and VA loan.

For FHA refinance loan, you get no maximum income limits. There is a fixed-rate loan available. For VA refinance loans, you can also get a fix-rate loan available.

Low down payment mortgages

Bank of America has offers for borrowers with qualifying incomes.

• The Affordable Loan Solution has a requirement for a 3% down payment. The loan amount is usually up to $700,000. For home loans of up to $1,000,000, the down payment can be 5%.
• The Freddie Mac Home Possible mortgage requires mortgage insurance. The down payment can be either 3% or 5%.
• VA loans are guaranteed by the Department of Veterans Affairs and have no minimum down payment requirements. There are no income limits.
• FHA loans have a down payment requirement of 3.5% and mortgage insurance. These loans are good for borrowers who cannot qualify for a conventional loan.

Pros and cons

Pros

• The Bank of America N.A. is an Equal Housing Lender and a Member of FDIC. It cannot discriminate against applicants on any basis and ensures the deposits its customers make.
• You can apply for a doctor loan available for doctors, dentists, and other medical residents of the US. They must have a high income and make a 20% down payment.
• There are mortgage origination fee discounts for the applicants who sign up for the Preferred Rewards Program. Preferred Rewards members with a combined average daily balance of $20,000 for three months can get discounts from $200 to $600.

Cons

• Bank of America does not have USDA loans. They are ensured by the Department of Agriculture and allow borrowers with low to moderate income to purchase a house in rural areas.
• The customer discount is not available for all borrowers. The applicants must have at least $20,000 in combined balances to get a discount on the Bank of America Mortgage origination fee.
• Bank of America Mortgage is not available for self-employed applicants. You cannot prove your income with profit-and-loss statements or rental income.

The bank offers many variations of a loan for buying or refinancing a house. The terms of loans will be a great advantage for you if you have a good credit history and a high income.

Requirements for applicants

For your mortgage application to be approved, you need to have a minimum FICO score of 600 to 620.

VA loans and jumbo loans require you to have a higher credit score, while FHA loans may be issued for lower scores but with mortgage insurance.

The maximum debt-to-income ratio for applicants is 55%-50%. The DTI is the percentage of your income going towards debt coverage. If you have a higher DTI, you may have to contribute a larger down payment.

How to apply for a Bank of America mortgage?

You can apply for a mortgage with Bank of America from home. The application process can be completed online.

The Bank of America Digital Mortgage Experience allows you to pre-qualify, apply, sign the document electronically, track your loan, and refinance a mortgage via the mobile app.

While deciding what mortgage products are right for you, pay special attention to the mortgage rates, private mortgage insurance requirements, closing costs, and payment amounts.

To apply via the Bank of America website, follow these steps:

1. Access the main page of the Bank of America;
2. Click on the "Home Loans" button and choose if you want to apply for a mortgage, refinance, or home equity loan;
3. Click the "Apply Now" button to start the application process;
4. Choose if you want to purchase a house or refinance an existing mortgage;
5. Log into your Bank of America account if you have one or provide your personal details, like income, phone number, email, physical address (input ZIP code), SSN, and date of birth;
6. Provide your financial information and income details;
7. Answer additional questions on the property or your existing debts;
8. Provide the required documentation and submit the form.

The bank will review your application, verify the information you have submitted, pull your credit report from the credit bureaus, and decide if you are eligible for a loan. If you need a consultation on the mortgage rates, terms, and conditions, you can:

• Schedule an appointment from Mon-Frid 8 a.m.-10 p.m. ET, or on Sat 8 a.m-6:30 p.m. ET;
• Find the nearest location. They work Mon Fri 8 a.m. 10 p.m. ET, and on Sat 8 a.m.-6:30 p.m. ET;
• Call the bank Mon-Fri 8 a.m.-10 p.m. ET and on Sat 8 a.m.-6:30 p.m. ET.

How to pay off a home loan?

You have several methods of paying back your mortgage:

• Enroll in PayPlan using your checking or savings account. The plan will adjust the amount debited from your bank account for free. You can enroll in the PayPlan via Online Banking.
• With an eligible Bank of America account, you can make payments using the "Bill Pay" or the "Transfers" tab. These tools can help you to schedule automatic payments and adjust the amounts if your payment amounts change.
• MortgagePay via Web is an online tool for one-time mortgage payments. You can use your checking or savings account with Bank of America to pay for your new mortgage or the one you refinanced. You can enroll in the MortgagePay via Online Banking.

Payment assistance programs

If you struggle to pay to make monthly mortgage payments, you can receive payment assistance from Bank of America.

The payment assistance programs help borrowers to receive low down payment mortgages.

Our America's Home Grant program allows applicants to get a credit of up to $7,500 to use towards closing costs or buy down the interest rate. This funding is not required to be paid back.

Our Down Payment Grant program is a grant of up to 3% of the home's price. The maximum amount can be up to $10,000 and is intended for a down payment coverage. The funding does not need to be repaid.

For more help, you can use the Bank of America Down Payment Center and see what programs you are eligible for from the bank itself, state or local agencies, nonprofit organizations, and employers.