Bank of America: 2022 Home Equity Review


Bank of America is headquartered in Charlotte, North Carolina, and is the second largest bank in the United Stateshaving acquired Merrill Lynch in 2008.

Bank of America

This national lender offers home equity lines of credit, or HELOCs, in all 50 states and the District of Columbia. One of the biggest benefits of a HELOC from Bank of America is the ability to convert the loan into a fixed rate home loan. HELOCs typically have variable interest rates that rise and fall with changes in the economy and general interest rate trends. This means that currently, as interest rates continue to rise, the ability to lock in a fixed rate for HELOC is a particularly attractive option.

Bank of America: in brief

Types of loans offered

HELOC

APR range

From 7.40%

Loan amounts

$25,000 to $1 million

Credit score requirements

undisclosed

Repayment Terms

10-year draw period, 20-year payback

Average application time

As little as 15 minutes

What we like

Minimal to zero fees: There are no application fees or annual fees for a Bank of America home equity line of credit, or HELOC, and the bank also says it covers the closing costs of its home loans up to to $1 million.

Discounts: You can get discounts on your interest rate if you enroll in various programs with Bank of America. For example, a 0.25% rebate is available if you sign up for autopay before or during your HELOC application with an eligible Bank of America deposit account.

Fixed rate conversion: The option of converting a variable rate HELOC to a fixed rate loan is ideal in today’s rising interest environment. Not all lenders offer this type of HELOC, which makes Bank of America a good candidate to consider, given that the Federal Reserve is expected to raise interest rates once more before the end of the year.

What we don’t like

Preference for Bank of America customers: You are not eligible for all available discounts if you are not a Bank of America customer. However, customers enjoy additional discounts, such as receiving a discount of up to 0.375% on your interest rate depending on the type of account you have.

Early Closing Fee: Although one of the main advantages of a HELOC from Bank of America is the low fees, if you close your account within 36 months for any reason, you will be charged a fee of $450 and you will be required to repay the third-party fees for closing costs that the bank has paid on your behalf.

Higher rates for fixed loans: If you decide to convert your HELOC to a fixed rate loan, keep in mind that your new interest rate will be slightly higher than your original variable interest rate. So, although you don’t have to pay any fees to make the conversion, your interest rate will go up a bit. However, your rate may remain lower in the long term than what your variable rate might reach.

Home equity loan options

Bank of America offers mortgages and refinances as well as HELOCs, but currently does not have a home equity loan option. However, because the bank lets you convert HELOCs to fixed-rate loans, it still offers homeowners an equity option in their home with predictable monthly payments, which could be ideal in the near future, as experts s expect interest rates to rise amid persistent inflation and a possible recession.

Costs

One of the advantages of Bank of America is that there are little or no fees. You are not required to pay any application fees or closing costs, and there are no annual fees to maintain your HELOC account, which are common fees that other lenders may charge.

If you close your account within 36 months of opening, you must pay an early closing fee of $450, as well as refund any other third-party fees the bank paid on your behalf during the approval process. such as registration fees or taxes. If you live in Maryland, however, the fee is waived if your maximum line of credit is less than $25,000.

How to qualify

Since Bank of America does not disclose its minimum credit rating requirements, potential customers are advised to review their credit to ensure that their credit ratings are very good to exceptional in order to qualify for a low interest rate. Generally speaking, most lenders prefer a credit score of 700 or higher, but some lenders, like Bank of America, will accept a lower score around 600, but expect to pay higher interest rates. students.

You’ll need the standard documents to prove you have adequate, verifiable income, including your recent W-2 form, tax returns, and pay stubs. You will also need to provide documentation for your existing mortgage and whether or not you have current home insurance.

Begin

You can apply online, in person, or by phone for a HELOC with Bank of America. However, to close your loan, you will need to visit one of its brick-and-mortar locations in person. Once your loan is closed, you can manage all your documents through the process using the bank’s online portal.

Customer service

You can apply for a HELOC online and the process should only take 15 minutes, according to Bank of America. You can also make an appointment via their website. Most live phone support is available Monday through Friday, 8 a.m. to 9 p.m. ET, although some lines are also open Saturday and Sunday. Go to the website for more details.

Live phone support:

  • Speak to a Loan Specialist: 800-763-4820
  • New Property Equity Inquiries: 800-779-3894
  • Existing HELOC customers: 800-934-5626
  • If you cannot make a payment for any reason: 800-451-6362
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