What Is A Bank Of America Home Equity Loan
Bank of America is one of the largest banks in the United States and ranks as one of the top five home loan providers in the United States. If you already own a home, a home equity loan can be a great way to tap into the value stored in your property. Bank of America offers home equity loans in the form of a HELOC, or home equity line of credit. If youre considering borrowing against the equity built up in your home, read more to find out if Bank of America lines of credit could be a good fit for your needs.
State Employees Credit Union: Nmls#430055
National / regional
Why we like it
State Employees Credit Union may be a strong match for qualified North Carolina borrowers looking to tap a lot of their equity.
Long draw period of 15 years.
Borrowing limit of 90% CLTV.
National / regional
Why we like it
PenFed is a strong choice for borrowers who want to take advantage of a fixed-rate option from a credit union.
Borrow up to 80% CLTV.
National / regional
Why we like it
Alliant’s high borrowing limit makes it an ideal choice for borrowers who need to access a large amount of funds or who haven’t built up a lot of equity yet.
Borrowing limit up to 90% CLTV.
» MORE:Current HELOC rates
How To Apply For Bank Of America Home Equity Loans Or Helocs
There’s a multi-step process to apply for a Bank of America HELOC online. According to the bank’s website, it’s possible to complete the application in as little as 15 minutes.
The first step is providing personal information to Bank of America, including:
- Borrower’s first and last name
- Borrower’s Social Security number and date of birth
- Employment status and estimated annual income
- The property’s location and its use
- Use of loan proceeds
- Estimated property value
- Residence address
Existing Bank of America customers can log in to online banking to prefill some required fields. Name, date of birth, Social Security number, employment status, and income are also required for any co-borrowers listed on the application. Any co-owners of the property must be listed, even if they aren’t applying for the loan.
Bank of America also requires the year the property was purchased, the purchase price, and whether there is a loan currently in place. The bank collects demographic information, including asking questions about race and sex, but borrowers have the option not to answer.
Once all personal and property information has been entered, borrowers can select any discounts they’d like to take advantage of, including the autopay and initial draw discounts. After that, they’ll have the option to choose the local Bank of America branch they’d like to use for loan closing. Borrowers can then review all of the information on the application to make sure it’s correct before submitting it.
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How Does A Heloc Work
With a HELOC, youre given a line of credit thats available for a set time frame , usually up to 10 years. While most HELOCs have an interest-only draw period, you can make both interest and principal payments to pay off the line of credit faster.
When the line of credits draw period expires, you enter the repayment period, which can last up to 20 years. Youll pay back the outstanding balance that you borrowed, as well as any interest owed. A lender may allow you to renew the credit line.
Take Advantage Of The Value You’ve Been Building
Make the most of your home’s equity by taking advantage of the value you’ve been building. Our no closing costs option for homeowners with significant equity lets you borrow the resources you need, at rates & terms that make sense for your budget. We also offer home equity loans that allow you to use up to 100% of your home’s value.
- Learn more about our wide array of home equity options.
- Refinance your existing home equity loan at a lower rate.
- Use our financial calculators to determine your best deal.
- Rates are applicable to both primary and secondary residences.
Compare To These Lenders
Apply To Find Out If You Qualify
Like most large banks, Bank of America is tight-lipped about its HELOC eligibility requirements. Though it does say borrowers need a combined loan-to-value ratio of 80% or less. And the site suggests the best rates are reserved for Preferred Rewards customers who set up automatic payments from their Bank of America checking account and those who make large initial withdrawals of $60,000 or more.
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Bank Of America Expert And Consumer Ratings
We pulled expert and consumer ratings online to determine how good Bank of America home equity loans are and combined them to arrive at our star ratings. Overall, Bank of America scores a 3-star rating on average, based on our findings. The bank received the lowest ratings overall at Trustpilot and the Better Business Bureau based on consumer ratings and reports.
What Is Home Equity
Home equity is the difference between what you owe on your mortgage and the current appraised value. If your house was appraised at $300,000 and you owe $100,000, you have $200,000 in equity.
If you havent had your home appraised since you renovated it or property values have gone up in your area, it might be worthwhile to get an appraisal before you apply for equity financing. If your home has increased in value, youll have more equity to draw from and potentially a better chance of getting approved for a loan.
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Bank Of America: Nmls#399802
National / regional
Why we like it
Bank of America’s lack of annual fees and fixed-rate option makes it an ideal choice for borrowers who prioritize definitive long-term financial planning.
Borrowing limit up to 85% CLTV.
No annual fees.
National / regional
Why we like it
US Bank can be a good fit for borrowers interested in taking advantage of a fixed-rate option.
Loans with a CLTV over 70% may not qualify for the best rates.
Annual fees are up to $90.
Compare Interest Rates For Home Equity Loans Helocs And Cash
Use our tool to get personalized estimated rates from top lenders based on your location and financial details. Select whether youre looking for a Home Equity Loan, HELOC or Cash-Out Refinance.
If you selected a home equity loan or HELOC, enter your ZIP code, credit score and information about your current home to see your personalized rates.
In the Cash-Out Refinance tab, select Refinance and enter your ZIP code, credit score and other property details to see what you might qualify for.
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Qualification & Requirements For A Bank Of America Home Equity Loan
Bank of America generally allows borrowers to open a line of credit up to 85% of the homes value, also known as the loan-to-value. For example, if you have a home worth $250,000, the maximum you can borrow is $212,500 including both the mortgage and home equity line of credit.
If you already have an outstanding mortgage, subtract that to find your maximum line of credit. If you have a $250,000 home, your maximum loan-to-value would be the $212,500 calculated above.
Your credit score is also a major factor in getting a mortgage. Interest rates are usually calculated using the prime rate plus an added APR for your risk. Getting the best rates typically requires a score of around 740 or above.
According to Bankrate, you can qualify for less favorable rates with a credit score of 620 or above. If you dont know whats on your credit report, head to AnnualCreditReport.com to get free copies of your credit report from the three large credit bureaus, Equifax, Experian, and TransUnion.
The total loan amount, home equity, and your credit history come together to decide if you will be approved. If you dont know your credit score Credit Karma and Mint are both excellent resources. You can use the loan proceeds for anything you want. That can be a cash-out scenario, home improvement, or other real estate projects.
The bank will also look at your total debt-to-income ratio, which factors in other debts like credit cards and student loans that have a monthly payment.
How To Get Started
You can apply for a Bank of America HELOC using the banks online application. The whole process should take about 15 minutes. After answering the initial questions, you will be shown how to upload any required documents and how to check on the status of your loan application.
If you need assistance with the application, or if you have questions or want to discuss fixed-rate loan options, you can schedule an appointment with a branch lending specialist or speak to one over the phone or through an online chat. Youll also need to visit a financial center in order to close your HELOC.
For more information about Bank of Americas HELOC, visit the banks website or call 800-779-3894, Monday through Friday, 8 a.m. to 10 p.m. ET or Saturday from 8 a.m. to 6:30 p.m. ET. You can also schedule an appointment online to meet with a lending specialist at your local branch. In addition to information about its products and the online loan application, the Bank of America website features a wealth of information on tapping into your homes equity.
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Will Taking Out A Heloc Impact My Credit Score
Lenders will perform a credit check when you apply for a HELOC, just like for any credit product, and that will reduce your credit score temporarily. But if you make repayments on a timely basis, your credit score will recover quickly.
Its important to keep in mind that any HELOC is secured by your home, similar to a mortgage. That means failure to make timely repayments could put you in jeopardy of losing the property.
Bank Of America Customer Reviews
Bank of America has an overall above-average reputation for customer service, according to J.D. Powers 2021 customer satisfaction survey.
However, in 2021, the bank received 283 official complaints from mortgage customers. That was approximately one complaint for every 1,000 mortgage customers. Thats a higher number of complaints than many other big-name mortgage underwriters, but still fairly low overall.
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How To Qualify For A Home Equity Loan With Bank Of America
Bank of America does not disclose a minimum credit score requirement, but based on historical data, borrowers will likely need a credit score in the mid-600 range.
All loans are subject to approval, and your APR will depend on your credit score, loan amount, work history, monthly income and monthly debts, property value and location.
How Can You Use Home Equity
Your home may be your most valuable asset, and borrowing against your equity in it could free up cash for any of several purposes. You might use the money to:
- Finance a home-improvement project. Under the recent tax law, interest on a HELOC or HELOAN used to buy, build or substantially improve a home may be tax deductible. Consult your tax advisor.
- Consolidate what you owe on credit cards or other higher-rate debts into a single loan. Since your home is used as collateral for HELOCs and HELOANs, these loans may have lower interest rates than other kinds of loans.
- Cover emergency expenses. If youve used up the cash in your emergency fund, you could draw on a HELOC to pay for house repairs, medical bills or other unexpected costs.
- Help pay for education tuition and fees. Home equity line or home equity loan interest rates may be lower than rates on college loans.
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Are Heloc Rates Fixed
Like credit cards, HELOCs typically have variable interest rates, meaning the rate you initially receive may rise or fall during your draw and repayment periods. However, some lenders have begun offering options to convert all or part of your variable-rate HELOC into a fixed-rate HELOC, sometimes for an additional fee.
Bank Of America Helocs Cons
When considering a home equity line of credit, it’s important to weigh any possible downsides or disadvantages. Here are some of the drawbacks borrowers may encounter with a Bank of America home equity loan:
- While Bank of America HELOCs have low base rates, borrowers with lower credit scores may pay higher interest rates.
- Qualification. Bank of America doesn’t readily disclose the minimum credit score or income requirements needed to get a HELOC, making it difficult for borrowers to decide if completing an application is worth their time.
- Application. The application process can be confusing, as some sections are repetitive and ask the same questions multiple times.
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Does Bank Of America Offer Home Equity Loans Or Helocs
Yes and no: The Bank of America offers home equity lines of credit to qualified applicants. Borrowers can use revolving credit lines to consolidate high-interest debt or finance big-ticket purchases. You can think of a home equity loan as a credit card secured by your home.
Because HELOCs are secured loans, their interest rates are much lower than credit card rates. If you fail to repay a HELOC, your lender can foreclose and sell your home to get its money.
However, the Bank of America does not currently offer home equity loans. If you want to borrow a lump sum with a fixed interest rate from the Bank of America, youll need to choose a HELOC with a fixed rate or a cash-out refinance.
Bank of America is one of the largest banks in the US, with a history that dates back 240 years. The bank offers mortgages and home equity lines of credit in all 50 states and the District of Columbia. Bank of America serves approximately 67 million consumer and small business clients, with deposits totaling $1.4 trillion. It ranked 6th overall in JD Power’s 2021 US Primary Mortgage Origination Satisfaction Survey.
Low Competitive Home Equity Rates Plus:
No application fees, no closing costs and no annual fee
There’s no fee to apply, no closing costs and no annual fee. There’s also no fee to convert your variable-rate balance to a Fixed-Rate Loan Option.
Submitting your application takes about 15 minutes. When you’re done, we’ll show you how to check your application status and securely upload documents.
Convenient access to funds
You have the flexibility to decide when and how much to use through Online Banking, by phone, at our financial centers or with no-access-fee checks.
Mobile & Online Banking
Manage your account, make payments and transfer funds using our top-rated Mobile Banking app and Online Banking.
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Our Take On Bank Of Americas Heloc
Bank of America is best for borrowers looking for high-dollar home equity lines of credit . It offers loans up to $1 million or up to 80% of your homes value more than many other lenders. Customers of the bank can earn generous discounts on their interest rates.
But if youre looking for a low maximum APR, Bank of America isnt for you. Its lifetime interest rates are capped at 24%, well above the max rate from other banks.
Bank of Americas interest rate discounts
Earn interest rate discounts if youre a Bank of America customer, and sign up for automatic withdrawal payments from an eligible account. Additional discounts are based on whether youre enrolled in the Preferred Rewards program and how much you initially withdraw from the credit line.
Theres no fee to join or participate in Bank of Americas Preferred Rewards program. Your tier is based on your qualifying combined balances in your banking and investment accounts.
|Preferred Rewards program
|.05% interest rate discount on each $10,000 draw, up to .60% for withdrawing $60,000 or more.
Bank Of America Mortgage Refinance Rates
Bank of Americas mortgage refinance rates are generally average or slightly lower compared to other big lenders. However, your own refinance rate will vary depending on your credit score, what refinance loan option you use, and your current loan balance.
If youre considering a mortgage refinance with BofA, make sure you check rates from a couple other lenders, too, to find the best deal.
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Clients should contact their Merrill financial advisor for a personalized version.
You are invited to apply. Your receipt of this material does not mean you have been prequalified or pre-approved for any product or service we offer. This is not a commitment to lend you must submit additional information for review and approval.
Merrill Lynch, Pierce, Fenner & Smith Inc., does not make commitments for or fund loans. Bank of America, N.A., does not serve in a fiduciary capacity with respect to all products or services. Fiduciary standards or fiduciary duties do not apply, for example, when the Bank is offering or providing credit solutions, banking or custody services or referrals to other affiliates of the Bank.
1 The relative benefits of a loan for debt consolidation depend on your individual circumstances. For example, you may realize interest payment savings by making monthly payments toward the new, lower interest rate loan in an amount equal to or greater than what was previously paid toward the higher rate debt being consolidated.
HELOC funds may not be used to purchase, carry or trade securities or repay debt incurred to purchase, carry or trade securities.