Bank of America Mortgage Review 2022 – NerdWallet

Tap to learn how COVID-19 has affected mortgage shopping

The coronavirus pandemic introduced some new challenges to getting a mortgage. Many lenders facing high loan demand and staffing issues increased their fees, adjusted minimum required credit scores or temporarily suspended certain loan products. While some products and business practices have returned to pre-pandemic levels, you might still find delays and limited options. If you can’t pay your current home loan, refer to our mortgage assistance resource. For information on how to cope with financial stress during this pandemic, see NerdWallet’s financial guide to COVID-19.

Bank of America at a glance

Bank of America has many loan options, including geographically targeted programs that can be especially helpful for low- and moderate-income home buyers. Online convenience and relatively low rates and fees are also pluses for this lender.

Here’s a breakdown of Bank of America’s overall score:

  • Variety of loan types: 5 of 5 stars

  • Ease of application: 5 of 5 stars

  • Rates and fees: 3 of 5 stars

  • Rate transparency: 4 of 5 stars

It’s one of the largest banks in the world, but Bank of America doesn’t want to be known just for its mammoth size. Then again, being one of the biggest does have its advantages, especially in mortgage lending.

Bank of America aims to make getting a mortgage easier by providing multiple loan options, modern customer service and a step-by-step walk-through of the underwriting process.

Here’s how Bank of America’s offerings stack up.

Bank of America mortgage loan types

The lender based in Charlotte, North Carolina, offers a wide range of purchase and refinance loans, including 15-, 20- and 30-year fixed-rate loans and 30-year adjustable-rate mortgages with 5/6, 7/6 and 10/6 terms. With these adjustable-rate mortgages, interest rates can change every six months after the initial 5-, 7- or 10-year fixed-rate periods. It also issues jumbo loans up to $2.5 million and government-backed mortgage products such as FHA and VA loans.

Bank of America’s Community Homeownership Commitment is designed to make homeownership more affordable for first-time and low- to moderate-income home buyers in communities across the country. The program offers:

  • Up to $10,000 or 3% of the purchase price, whichever is less, in down payment assistance in select locations.

  • Up to $7,500 for nonrecurring closing expenses, like title insurance and recording fees, available in some parts of the country.

  • The Affordable Loan Solution mortgage with a minimum down payment of 3%.

Bank of America HELOC: The lender also offers a home equity line of credit, or HELOC. These first or second mortgages are a way for homeowners to access existing home equity without refinancing or selling their home. Funds obtained with a second mortgage can be used for expenses such as home improvements, education costs or debt consolidation. Bank of America’s HELOC features an introductory interest rate that resets higher after six months. The lender offers several options for HELOC rate discounts, including setting up automatic payments, making an initial withdrawal and being a Preferred Rewards client.

Bank of America mortgage ease of application

Bank of America’s digital interface allows you to apply, get prequalified or preapproved and lock in your interest rate online through its website or mobile app. If you’re already a banking customer, the digital application will auto-populate with your contact information and financial data, reducing the time it takes to apply. If you prefer to apply over the phone or in person at a Bank of America branch, those options exist, as well.

Bank of America’s Home Loan Navigator portal helps borrowers stay plugged in throughout the lending process. You can upload documents, download loan disclosures, track the progress of your loan and e-sign most required paperwork.

Bank of America mortgage rates and fees

If you’re already a Bank of America customer, you may qualify for a reduction of up to $600 in the mortgage lender origination fee.

One of the most important considerations when choosing a mortgage lender is understanding what the loan will cost. In order to provide consumers with a general sense of what a lender might charge, NerdWallet scores lenders on two factors regarding fees and mortgage rates, according to the most recently available Home Mortgage Disclosure Act data:

  • Bank of America earns 2 of 5 stars for average origination fee.

  • Bank of America earns 3 of 5 stars for offered mortgage rates compared with the best available rates on comparable loans.

Borrowers should consider the balance between lender fees and mortgage rates. While it’s not always the case, paying upfront fees can lower your mortgage interest rate. Some lenders will charge higher upfront fees to lower their advertised interest rate and make it more attractive. Some lenders just charge higher upfront fees.

You can decide whether to buy discount points — a fee paid with your closing costs — to reduce your mortgage rate.

Deciding whether to pay higher upfront fees is a matter of considering how long you plan to live in your home and how much cash you have to apply toward closing costs when you sign the loan paperwork.

Bank of America mortgage rate transparency

The lender’s website displays interest rates for several of its fixed- and adjustable-rate mortgage products, along with the annual percentage rate, any discount point assumptions and an estimated monthly payment. You can enter your purchase price, down payment and ZIP code to see more customized rates.