Bank of America, the second-largest bank in the country, is a well-liked choice for potential homeowners looking for a mortgage.
Bank of America provides a range of mortgage options in addition to credit cards, checking accounts, and savings accounts. Whether you’re searching for a jumbo loan to purchase your dream house or you’re a first-time home buyer, Bank of America probably offers a solution that might meet your requirements.
In general, applicants must have fair credit or better in order to be approved for a mortgage by the lender. However, BofA does provide low- to moderate-income borrowers alternatives, so it could be a viable option for people who don’t have a sizable enough down payment to be eligible for other mortgages.
- Existing customers may be eligible for discounts: Preferred Rewards program members of Bank of America may be eligible for waived mortgage origination costs or interest rate reductions.
- Mortgage alternatives for borrowers with low and moderate incomes: Low down payments and lenient credit standards are two benefits of Bank of America’s mortgage alternatives for those with lower incomes. Additionally, the bank provides down payment and closing cost assistance programs that might aid borrowers in purchasing homes.
- Applicants may pre-qualify and submit applications online: Bank of America offers consumers the option of completing the pre-qualification and application procedures totally online, unlike other lenders that insist you meet a mortgage counselor in person or talk to a representative over the phone.
- provides financing solutions made especially for health care workers: Mortgages from Bank of America are designed with medical professionals in mind. Benefits include a smaller down payment requirement and the potential to get approved for a loan before the start of your new work. When determining your eligibility for a loan, Bank of America may also eliminate part or all of your student loans from your overall debt.
- Limited knowledge of lender costs: It’s crucial to know what fees the lender charges while looking for a house loan. Even though Bank of America has a closing costs calculator on its website, the data it offers is ambiguous and does not outline the normal expenses.
- Bank of America provides a number of mortgage alternatives, but none of them include United States Department of Agriculture (USDA) loans, which need no down payment and may be utilized to purchase properties in rural regions. Additionally, the lender forbids borrowers from obtaining loans for home renovations or to buy and renovate a fixer-upper.
- does not provide alternative mortgages: Some mortgage lenders provide lending solutions for those who would have difficulty qualifying for conventional mortgages, such bank statement mortgages for self-employed borrowers. A borrower searching for an alternate mortgage must unfortunately deal with a different lender as Bank of America does not provide them.
Our selections for the finest mortgage lenders accessible right now include a wider range of lenders, some of which provide USDA loans.
Types of Mortgage Loans Offered by Bank of America
Mortgage alternatives at Bank of America are many. While the minimum credit score criteria for each form of loan are kept a secret by the lender, most loans call for a score of 620 or higher from the borrower. Following are the choices available to borrowers:
- Mortgages with fixed rates: Bank of America’s fixed-rate loans are typical mortgages with fixed interest rates that last the whole loan period.
- An adjustable-rate mortgage (ARM) allows for periodic rate changes over the loan’s term. They are most suitable for borrowers who seek a smaller initial monthly payment or who only want to use the property briefly. There are three ARM choices offered by Bank of America: 5-year/6-month, 7-year/6-month, and 10-year/6-month. The initial time during which the interest rate is fixed is indicated by the first number in these selections. The second figure indicates that the interest rate is then modified every six months.
- Mortgage via the Affordable Loan Solution: Homebuyers with modest incomes may utilize the Affordable Loan Solution program to put as little as 3% down on a house. Maximum loan amounts range from $647,200 with a 3% down payment to $970,800 in high-cost locations with a 5% down payment. Although it is necessary, mortgage insurance often has lower prices than traditional mortgages. A qualified agency may require first-time homeowners to attend a homebuyer education course.
- A jumbo mortgage is necessary if the house you intend to purchase needs a higher loan than the conventional loan maximum, which is now $647,200 in all states with the exception of Hawaii, Alaska, and certain other designated high-cost areas. You will need high to exceptional credit and a bigger down payment for jumbo mortgages since their qualifying standards are often tighter.
- Mortgages insured by the Federal Housing Administration (FHA) feature reduced down payments and credit score restrictions and are guaranteed by the government.
- Mortgage from the U.S. Department of Veterans Affairs (VA): Eligible former soldiers of the United States may be eligible for VA mortgages, which provide 100% financing. The qualifying requirements are more lenient than those for traditional loans, and qualified applicants may get a mortgage with no down payment.
- Doctor mortgages are available from Bank of America to licensed physicians, dentists, medical residents, fellows, and other healthcare professionals. For mortgages up to $1 million and $1.5 million, the down payment requirements are as low as 5% and 10%, respectively, and the lender may not consider your student debts when determining whether to approve your loan application. In contrast to other lenders that need recent pay stubs or other forms of evidence of work, residents and fellows are both eligible for loans and may close on a house 90 days prior to the start date of their employment.
Bank of America Features and Benefits
Bank of America offers the following additional benefits:
- Discounts based on prior relationships: If you have a Merrill investment account or are a current client of Bank of America, you may be eligible for the Preferred Rewards program. Your eligibility for perks varies according on your tier level and is determined by your account balances, but they often range from $200 to $600 in waived origination costs.
- America’s Home Grant: This initiative offers qualified borrowers a credit of up to $7,500 that may be used to closing expenses or an interest rate reduction.
- Moderate-income borrowers in certain locations may be eligible for the down payment grant. Bank of America offers borrowers via this program up to 3% of the house purchase price, or a maximum of $10,000, to be utilized as a down payment.
Visit the Down Payment Center at Bank of America: A database of government-run initiatives for low-income and first-time homeowners is kept up by Bank of America. To locate programs that provide help with closing costs or your down payment, check the Bank of America Down Payment Center.
How to Apply for a Bank of America Loan
The procedures below should be followed if you determine that Bank of America is the best mortgage lender for you or if you want to compare its rates to those of other lenders:
- Determining how to apply You may apply for a loan online or in person with Bank of America. Bank of America provides a full range of digital services. In fact, according to the bank, its website or mobile app was used to start 81% of its mortgage applications.
- assemble your documents: You will be required to show proof of your income, employment, assets, and other information when you apply. You may prepare by using the handy checklist of necessary papers provided by Bank of America.
- Pre-qualify for a loan: You may submit a pre-qualification request form online or in a nearby branch to get a pre-qualification letter. You don’t have to be a client of Bank of America to continue; but, logging in will speed up the process if you are already a customer.
- Identify a house: You may look for a property on your own, or you can utilize the Real Estate Center of Bank of America to find nearby properties and even connect with partner real estate brokers.
- Apply for a mortgage: When you’ve found the house of your dreams, you may submit a mortgage application as well as an offer. You’ll be required to provide your paperwork and provide permission for a credit check. If the lender accepts your application, they will work with you to determine a closing date.
For details, you may need to speak with an expert. You can check possible rates on Bank of America’s website, but not all borrowers will be able to use that feature. You may need to talk with a home loan consultant to receive those specifics, depending on your zip code, desired loan size, and down payment.
Bank of America doesn’t provide 24/7 service, unlike other lenders. However, you may get in touch with customer care by calling, chatting online, or going to a nearby location. To get specialized advice, you may also book an appointment online with a home loan counselor.
During the following business hours, dial (866) 467-6492:
- 8:00 a.m. to 10:00 p.m. EST, Monday through Friday.
- 8:00 a.m. until 6:30 p.m. EST on Saturday
Bank of America is generally a well-respected lender.
The bank was placed sixth out of 23 lenders in the J.D. Power 2021 U.S. Primary Mortgage Origination Satisfaction Study. Each lender was assessed based on their loan options, communication, loan closure, and application and approval processes.
Individual customer evaluations, however, are less favorable. Based on more than 1,300 reviews, Bank of America has a TrustScore of 1.3 out of 5. Not all unfavorable ratings of Bank of America are related to its mortgages since Trustpilot also covers reviews of its credit cards and bank accounts. Long wait times when calling customer assistance and poor communication, however, were frequent complaints.
It is not unexpected that Bank of America has had regulatory problems and legal proceedings in the past given that it is one of the biggest lenders in the nation. Notably:
- In order to address claims of discrimination against borrowers based on their family status and gender, Bank of America and the U.S. Department of Housing and Urban Development (HUD) reached an agreement in 2022.
- In a 2021 class action lawsuit, Bank of America agreed to pay $1.2 million to settle allegations that it took part in a Maryland mortgage kickback scam.
- The U.S. Securities and Exchange Commission (SEC) said in 2015 that Bank of America had reached a $335 million settlement to resolve allegations that it had defrauded shareholders and relied on an electronic mortgage registry.
These types of problems are common for an organization the size of Bank of America. However, before signing any deal, be sure you perform your own research on any lenders you are thinking about, maintain solid records, and read the tiny print.
Once you’ve obtained a mortgage, you may use Bank of America’s online site to manage your account, make payments, and monitor the status of your loan repayment. You may manage your mortgage using the company’s feature-rich mobile app.
For first-time homebuyers and those with modest incomes who could profit from its low down payment alternatives, Bank of America may be a decent lender. But not everyone may find the lender to be the ideal option.
Fairway Independent Mortgage Corporation is an additional choice to take into account. Fairway provides USDA loans for those wishing to purchase rural properties, unlike Bank of America. Borrowers may acquire a home and pay for renovations using Fairway’s renovation loans.
|Bank of America||Fairway Independent Mortgage Corporation|
|Types of Mortgages||Conventional FHA VA Jumbo Affordable Loan Solution Doctor loans||Conventional FHA VA USDA Jumbo Doctor loans Renovation|
|Average Time to Closing||Not disclosed||30–45 days|
|2021 J.D. Power Ranking||6/23||5/23|
Choosing a Mortgage Lender
It’s a good idea to shop around and evaluate loan possibilities and prices from many sources before choosing a mortgage provider. The following elements that may impact your overall loan cost should be taken into account when you weigh your options:
- Annual Percentage Rate (APR): The APR accounts for the mortgage’s interest rate, mortgage points, and broker costs.
- Loan Type: When getting a mortgage, you typically have the option of fixed or adjustable rates. Unlike adjustable-rate loans, which may fluctuate over time, fixed-rate loans have constant interest rates.
- Repayment Term: The repayment period typically lasts between 10 and 30 years. Higher monthly payments are associated with shorter loan periods, but you may be able to get a cheaper interest rate.
- Points: The costs you pay to the lender are known as points. So that you are aware of the true cost of the loan, request that the fees be reported in dollars rather than points.
- Down payment: For the majority of mortgages, you must contribute a portion of your savings toward the cost of the property. Down payments for certain types of mortgages may be as low as 3% or even 0%. But bear in mind that if you put down less than 20%, you’ll probably need to pay for private mortgage insurance (PMI).
The mortgage calculator on Investopedia will help you determine how various interest rates and loan conditions will impact your monthly payments and total payback.
Recognize the windows for credit inquiries. It is sense to compare mortgage rates from several lenders while looking for one. Although FICO scores do not reflect mortgage queries made within 30 days of generating the score, doing rate research won’t harm your chances of qualifying. Therefore, keep inquiries within a 30-day window to avoid harming your score. After then, all subsequent questions within a brief timeframe are combined to form one enquiry.Final Verdict
There are conflicting consumer opinions concerning Bank of America’s mortgage products. While some customers applaud the company’s computerized application procedure, others have expressed frustration with excessive wait times and unhelpful customer service agents.
However, independent consumer rating organizations like J.D. Power usually hold Bank of America in high esteem within the sector, and its digital mortgage experience makes it simple to apply for a mortgage from the comfort of your sofa.
In light of this, Bank of America is probably the best option for homebuyers who like to manage everything online or for those with low incomes who wish to benefit from the lender’s homebuyer assistance and Affordable Loan Solution programs.
How We Review Motgage Lenders
Investopedia is committed to provide customers objective, in-depth assessments of mortgage lenders. With the help of approximately 1,500 data points, we evaluated 45 mortgage lenders and learned the following:
- Customer satisfaction, online applications, perks and awards, etc.)
- functional aspects (state licensing coverage, number of loan officers, etc.)
- offered loan products (fixed-rate, FHA, USDA, etc.)
- Accessibility (days to closure, minimal debt-to-income ratio, etc) (days to closing, minimum debt-to-income ratio, etc.)
In order to find out which characteristics clients think are most important and how pleased they are with different lenders, we also polled 1,195 mortgage borrowers. To aid readers in making wise judgments regarding house loans, mortgage lenders were objectively appraised in the aforementioned areas.
Read more in our full mortgage lender review methodology.
You are looking for information, articles, knowledge about the topic Bank of America Mortgage Review 2022 on internet, you do not find the information you need! Here are the best content compiled and compiled by the achindutemple.org team, along with other related topics such as: Mortgage.