With lots of mortgages to choose from, Bank of America remains one of the best mortgage lenders. Its mortgage rates are lower than average when compared to top mortgage lenders. This bank has a variety of multiple mortgages, such as fixed-rate mortgages, jumbo mortgages, variable-fixed mortgages, and the Affordable Loan Solution.
Although Bank of America’s interest rates aren’t favorable, they are still better when compared to top mortgage lenders. The borrowers can also apply online, in person, or by phone. If you need help with your down payments, then Bank of America is the right choice for you. They also give a detailed breakdown of the cost before applying for the mortgage.
Types Bank of America Mortgage Loan
Bank of America provides a wide array of home loan options, which include:
FHA Loan:
This is a Federal Housing Administration-insured loan, which is an excellent option if you have limited funds and income for a down payment.
Adjustable-Rate Mortgage
This mortgage has an interest rate that can fluctuate depending on the changes in the financial index that your mortgage is attached to. It usually starts with an initial interest rate that is lower than a fixed-rate mortgage; however, as soon as your introductory period ends, the rate can change. Your monthly payment might decrease or increase when this happens. The loan’s term will determine the number of times the interest rate can change as well as the highest level it can reach.
Fixed-rate Mortgage:
These types of home loans are very common because they are dependable and straightforward, and you are safeguarded from any increase in your monthly payments. This is because the loan has a set interest rate that doesn’t change throughout the loan; your principal and interest payments remain the same.
Affordable Loan Solution Mortgage:
This type of loan was launched by Bank of America in 2016 for low-income buyers. Bank of America also partnered with Freddie Mac and the Self-Help Ventures Fund for the program that enables buyers to pay as little as 3% in down payments.
You can’t have additional property if you have this type of loan, and you are subject to the maximum loan amount and income limits. Just like a FHA loan, mortgage insurance premiums are also required as upfront mortgage insurance premiums. Those premiums will be added to your monthly mortgage payment. This loan program is available for fixed-rate mortgages with 25- or 30-year terms.
VA Loans:
If you are either a current or former member of the United States Military or the National Guard, you might be qualified for this mortgage, which is backed by the government. VA loans also require little or no down payment.
Jumbo Loan:
If you want to take out a loan that is bigger than the loan limit in a country, then you will have a jumbo loan. In the United States, the loan limit is less than $726,200; however, in some areas, it increases to $1,089,300. This means that you can borrow up to this amount in those areas.
Doctor Loans:
This type of loan has flexible approval and is established for medical professionals.
The above-mentioned are the types of mortgages offered by Bank of America.
Is there a Loan Limit?
There is no loan minimum for Bank of America’s first mortgage. The maximum for a Bank of America mortgage is $5 million with a jumbo mortgage. You can apply for a bigger, custom-program mortgage if you are a client of Bank of America wealth management.
Bank of America Mortgage Rates
Bank of America mortgage rates are much lower when compared to other lenders. If you have an existing account with Bank of America, then you might also get good deals. If you are also a Preferred Rewards customer, then you can get $200 to $600 removed from your mortgage origination fee. On the Bank of America website, the interest rates for its fixed and adjustable-rate mortgage products, along with the yearly annual percentage rate, are displayed.
How To Get the Best Mortgage Rates for You
There are a few tips you can follow to get the best rate on your mortgage. With the best rate, you can save a few hundred dollars on your mortgage rates. If you want to get the best mortgage rate, then the tips listed above will guide you on how to get the best mortgage rate.
Requirements for Bank of America Mortgage
Bank of America has its requirements to be eligible for its mortgage. Some of the requirements include:
- Minimum credit score
- Although the minimum credit score requirement for Bank of America isn’t disclosed, Still, most lenders require:
- A minimum of 620 for a conventional loan.
- A minimum credit score of 580 is required for an FHA loan.
- A minimum of $580 for VA loans.
- A minimum of $680 for jumbo loans.
Debt-to-income Ratio
Bank of America also doesn’t disclose its maximum debt-to-income ratio. Usually, you will need a DTI below 50% to be approved for a mortgage. However, if your debt-to-income ratio is below 36%, you will have a higher chance of getting approved. If you are financially strong in other areas, like your down payment or credit score,
Minimum Down Payment
The minimum down payment varies by the type of loan and loan amount. The table below shows the minimum Bank of America down payment.
| Loan Type | Minimum Down Payment |
| Fixed-rate | 5% |
| ARM | 5% |
| Affordable Loan Solution | 3% |
| FHA | Not disclosed (usually 3.5%) |
| VA | 0% |
| Jumbo | 5% |
| Doctor | 3% on mortgages up to $850,000 5% on mortgages up to $1 million 10% on mortgages up to $1.5 million 15% on mortgages to $2 million |
Factors That Determine Your Mortgage Rate
The rate of your mortgage is determined by several factors, including your credit profile. Other factors include:
- Loan amount: Your mortgage rate can be impacted by the size of your loan.
- Economic factors: mortgage rates are impacted by factors such as inflation, the Federal Reserve, and investor appetite.
- Your credit and finances: if you have a good credit score, you will get a better interest rate. If you have more money for your down payment, you will get a lower rate.
- Loan structure: your mortgage rate varies if you are either getting a fixed-rate or adjustable-rate loan. It also depends on the term of the loan.
- Location of the property: the rates also vary based on the location where you are buying your property.
- The lender you work with: the lender sets rates depending on several factors, which include supply and demand.
Each lender has its own rules to determine your mortgage rates. You can shop around and compare mortgage rates to find the cheapest rate.
Bank of America Mortgage Pre-approval
If you are thinking of getting a mortgage from Bank of America, you can start by getting a preapproval. This shows the type of loan and interest rate you are eligible for and the amount you are qualified to borrow. A preapproval requires the lender to verify your information through documents. To get a mortgage preapproval, there are some documents you need to provide, and they include:
- The down payment amount and the desired mortgage amount.
- Bank account number or recent bank statements.
- Copies of pay stubs that show your recent 30 days of income.
- W-2 statement and signed tax returns from the last two years.
The lender will also perform a credit inquiry to ensure that you meet the minimum credit score requirements for the type of mortgage that you need. The borrowers also receive their official pre-approval letter within 10 days.
How To Apply for a Bank of America Mortgage
The application process for a mortgage with Bank of America is completely online. You can apply for, be prequalified for, or be preapproved for a mortgage online. There is also an option to do these things in person or over the phone. The prequalification takes an hour; however, it only gives you an idea of the amount you can borrow.
For the prequalification, you will need your home price, contact information, the type of property, and your Social Security number. It is very helpful when you are a new homeowner. It takes up to 10 business days to get pre-approval. This process involves a thorough examination of your finances.
For the loan application, you need a couple of financial documents: pay stubs, W-2s, federal tax returns, employment history, and your bank and asset statements. Self-employed borrowers will need year-to-date profit and loss statements. Applicants applying for a VA loan will need a certificate of eligibility. The buy-and-sell agreement for the home is also required.
Furthermore, borrowers can also submit and sign the entire document online. The online portal enables you to monitor each step of your mortgage process. You are also unable to lock in your rate until you have a house under contract. You must lock in your rate for a minimum of 10 days before closing.
Before you close the loan, the bank arranges a home appraisal to verify the property’s estimated market value. Once everything is checked and the home inspection is okay, you will need to secure homeowners insurance as the last step. The usual rate lock with Bank of America is 45 days for a purchase loan. If you want a fast preapproval, then you can ask your loan officer if they can grant your request.
How Much is the closing cost of a Bank of America Mortgage?
The closing costs of a mortgage are made up of all the fees associated with the loan, which include the lender’s charges, usually an origination fee that equals 1% of the loan principal. Its cost includes third-party fees such as title insurance and appraisal. The closing cost is usually between 2% and 5% of the loan amount. The closing cost for a Bank of America mortgage is up to $7,500.