Bank of America Mortgage Pros and Cons
- Has a wide selection of loan products for just about anyone?
- Offers a discount for current Bank of America customers
- Offers both online and in-person services
- Can secure a home equity loan or HELOC
- Bank of America isn’t transparent with their fees
- It may take a while to get through underwriting
Bank of America Mortgage Overview
Bank of America is one of the most well-known banks in the country, so it’s no surprise that millions of people turn to them for their mortgage needs.
Like most large banks, Bank of America offers typical mortgage options (conventional and government-backed), but they also offer geographically specific loan options for low to moderate-income families who may not qualify for traditional loans.
What Types of Mortgages Does Bank of America Offer?
Bank of America offers standard mortgage options, including conventional, FHA, VA, and jumbo loans (loans higher than $548,250).
They offer applicants fixed-rate or adjustable-rate loans across a variety of terms ranging from 10 – 30 years.
They also offer home equity loans, HELOCs, and mortgage refinance options, giving mortgage applicants many choices to find the right mortgage.
They also offer specific loan programs that help with closing costs, down payment, and two loan options with down payment requirements of just 3%.
Bank of America Mortgage Rates and Terms
Like most banks, the mortgage rates vary on a day-to-day basis at Bank of America. They offer competitive interest rates compared to most national mortgage lenders.
They offer typical 10, 15, 20, and 30-year fixed terms and a variety of adjustable-rate terms. Something they offer that many banks don’t are ARM loans that adjust every 6 months rather than annually.
For example, they have 5/6, 7/6, and 10/6 ARM loans which offer a fixed rate for 5, 7, or 10 years and then adjust every 6 months. This is a longer fixed term than most annual ARMs, so it can be a more attractive option.
Bank of America Mortgage Fees
Bank of America doesn’t disclose their closing fees; however, they do advertise a $200 – $600 savings off the origination fee for existing Bank of America customers.
As is the case with any lender, always shop around for the lowest rates and closing fees. Don’t assume the rate you’re given is the best or that it doesn’t come at a cost.
Check for origination fees or discount points. Don’t be afraid to negotiate the fees to get the best option available.
How to Qualify for a Bank of America Mortgage
Like most lenders, Bank of America offers a wide selection of loans, each of which has different qualifying requirements. In general, aim for a credit score of at least 600 (higher is always better) and a debt-to-income ratio no higher than 43%.
Bank of America does have programs with more flexible guidelines if you have a higher DTI or a low credit score, but you’ll get the best rates and terms when you prove you can comfortably afford the loan and have a solid payment history on your other debts.
In addition to managing your credit score and debt-to-income ratio, you should try to have the following:
- Stable income and employment for the last 2 years
- Proof of assets for your down payment and closing costs
- Proof of reserves (money you don’t need for the down payment or closing costs)
- No recent delinquencies or public records
Bank of America Mortgage Features and Benefits
Transparent About Rates
You can see today’s rates for a variety of situations right on the Bank of America website. They don’t make you call to talk to a loan officer or apply for a mortgage before finding out the rates.
Low Down Payments
Bank of America offers a variety of loans, some of which have low down payment requirements. Even conventional loans require just 3% down for first-time homebuyers, while FHA loans require only 3%.
If you don’t qualify for either loan, Bank of America has a couple of their own programs that may help you buy a home with a low down payment.
You Can Prequalify
You can get pre-qualified or even pre-approved (pre-approved is better) online. You can complete the application online and submit your documentation digitally.
If you prefer to talk in person with a loan officer, Bank of America has 4,300 branches throughout the country.
How Does Bank of America Compare to Other Lenders?
#1. Bank of America Mortgage vs. Rocket Mortgage
Rocket Mortgage is a digital mortgage company. They don’t have physical branches like Bank of America, but they do offer competitive mortgage rates and fees, along with many programs to help you qualify for a mortgage.
Rocket Mortgage offers everything Bank of America does except HELOCs or home equity loans. But they have a unique program called YOURMortgage that allows borrowers to choose their term from 8 to 29 years so you can make the mortgage how you want it.
>> More: Rocket Mortgage Review
#2. Better Mortgage vs. Bank of America Mortgages
Better Mortgage is also an online lender that operates 24/7, giving you access to pre-qualifications and pre-approvals when you need them. Better Mortgage prides itself on its fast-closing process, claiming it can close most loans within 21 days.
Also, if you’re a current Chime customer, you can save $500 off your closing costs at Better Mortgage, or if you have an AMEX card, you may save as much as $6,000 on your next statement.
>> More: Better Mortgage Review
#3. Quicken Loans vs. Bank of America Mortgage
Quicken Loans is now Rocket Mortgage, but you can still apply for a mortgage through them. If you prefer to talk to a loan officer, you can call Quicken Loans and talk to someone. If you prefer to do things digitally, you’ll find yourself at Rocket Mortgage.
Either way, you’ll have a large selection of loan products to choose from, including traditional and non-traditional bank products except HELOCs or home equity loans.
Quicken Loans’ interest rates and fees are sometimes higher than Bank of America, though, so make sure you shop around.
>> More: Quicken Loans Mortgage Review
#4. LoanDepot vs. Bank of America Mortgage
LoanDepot is a cross between an online lender and an in-person lender. Most of the lending process is completed online, but you can visit one of their 200 branches throughout the country if you want in-person support.
LoanDepot offers a package deal to save you money. If you use a real estate agent, they matched you with and use all LoanDepot services, including homeowner’s insurance and title services, you’ll save up to $6,000 on your loan.
>> More: LoanDepot Mortgage Review
What Credit Score Do You Need for a Bank of America Mortgage?
Like any lender, Bank of America would prefer a higher credit score, but they have programs that allow scores as low as 600. The key to the lowest interest rates and fees is a high credit score, though, so working on your credit score as much as possible is in your best interest.
Is Bank of America a Good Choice for Mortgages?
Bank of America offers a wide selection of loans at affordable prices. They are a great option if you want in-person support or are already a Bank of America customer. They fund millions of mortgages a year and help borrowers who otherwise wouldn’t qualify for a mortgage secure one.
Does Bank of America Offer Mortgage Refinance?
Bank of America offers many refinance options if you already have a mortgage, including conventional, FHA, and VA refinances. If you have mortgage insurance and want to get out of it, or you built equity in your home and want to use it, Bank of America can help you secure the right loan.
>> More: How to Refinance Your Mortgage
Bottom Line: Bank of America Mortgage Review
Bank of America is a good online mortgage lender to have on your list when shopping around for the right mortgage.
Whether they offer the best rates or fees for your loan depends on your qualifying factors and the current rate environment, but they are worth including in your search for the right mortgage.