Bank of America Mortgage Review 2024

Publish date: 2024-07-30

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You might know Bank of America from its ubiquitous branch locations spread across the U.S., but the nation’s second-largest bank is also a strong contender in the digital loan space. It also provides financial assistance to cover some of the upfront costs of buying a home. Here’s what to know about Bank of America’s mortgage program and why it should make your list of lenders to check out.

Best for: Digital applicants and first-time homebuyers

Bank of America says most of its home loan applications come through its Digital Mortgage Experience, making it a good option if you want to apply for a mortgage online. Since the lender also has more than 3,900 branch locations in 38 states, you have options for in-person help if you prefer.

First-time homebuyers may also receive up to $17,500 in lender credits and down payment assistance, though you’ll need to meet program requirements, such as buying in a specific area or meeting income limits.

Best for availability

Bank of America

Fox Money rating

Min. Credit Score

620

Days to Close

4-6 weeks

Pros and cons

Available nationwide

Offers programs to assist with down payment and closing costs

Qualified existing members can receive fee discounts

Doesn't offer USDA loans

No renovation or home equity loans

Certain features only available to members

More details

Overview

Bank of America has a wide reach, serving customers on its website, mobile app, or in person at one of its many branches. It offers conventional, FHA, VA, and jumbo loans, and borrowers can get pre-approval in as soon as an hour.

Shows rates

Origination fee

Availability

All 50 states

Customer service

Live chat, email, phone

Mobile app

Online review score

1.3/5 Trustpilot score

Online prequalification

Min. down payment

Loan Type

Conventional

Yes

FHA

Yes

USDA

Jumbo

Yes

ARM

Methodology

To determine the best mortgage companies, Fox Money evaluated lenders based on several different categories: rates and fees, reputation, eligibility, efficiency, customer experience, and discounts and perks. We also looked at the types of loans offered by each lender for research purposes only, they did not factor into the overall score. We assigned a score out of five stars to each lender based on our findings.

Learn more about how Fox Money rates lenders by checking out Mortgage Lender Rating Methodology.

Bank of America: Pros and cons

Pros

Wide variety of home loans: The bank offers fixed- and adjustable-rate mortgages, along with conventional, jumbo, FHA, and VA loans. You can also find home equity loans and customized mortgage options.
First-time homebuyer loans and grants: Eligible borrowers may receive up to $7,500 in lender credits to cover closing costs and a grant of up to $10,000 that can be used toward the down payment.
Several application options: You may submit a mortgage application online, over the phone, or at one of the bank’s nationwide locations.
Origination fee discounts: Preferred Rewards members receive a discount on the origination fee, either a dollar amount up to $600 or a rate discount of 0.250%

Cons

Website lacking information: To get a list of fees and borrower requirements, you’ll need to speak with a loan specialist or submit a request online; the information isn’t readily available.
No USDA home loans: Bank of America doesn’t offer USDA loans, which allows buyers in rural areas to purchase a home with no down payment.
Long pre-approval process: The bank may take up to 10 business days to provide a mortgage pre-approval, versus a few hours with some other lenders.
Branches not in every state: Bank of America’s branches are spread across the District of Columbia and 38 states, leaving 12 states with no option to apply for a mortgage in person.

Before applying for a mortgage, it’s a good idea to review your finances. Here’s what to consider:

Credit score: Credit score requirements vary by lender and loan program. Generally, a higher credit score can help you qualify for a mortgage and get a good interest rate. Your credit score is calculated using the information in your credit reports, so go over them and make sure the information is correct. You can request copies from the reporting bureaus or you can get one from AnnualCreditReport.com.
Tax returns: When they verify your income, lenders will request transcripts of your tax returns from the IRS. If you haven’t submitted a return yet, now’s the time to file.
Income: Lenders will go over your recent pay stubs and the last few W-2 forms to check that your income is reliable. Gather documents that show side income, too, if you have it.
Debt: Monthly payments on existing debts, such as auto loans and credit cards, can make it harder to qualify for and afford a mortgage. Lenders will look at your debt-to-income ratio (DTI) to see how much of your pre-tax income goes toward debt payments each month. If you already have a high DTI, lenders will be hesitant to approve your mortgage application.

Tip:

A lower DTI is better, so paying down debts will help. Bank of America’s maximum DTI for some loans is 50%, but it will look at the big picture, too. Excelling in other categories (a high credit score, say) will boost your profile.

Here’s what to expect when you apply for a mortgage from Bank of America:

Gather documents: Be prepared to verify your identity, income, and assets. Lenders might request financial documents such as your two most recent W-2 forms, tax returns, bank statements, and any 1099s you received for the tax year.

Provide personal information: If you apply on Bank of America’s website, you’ll provide your name, address, phone number, and Social Security number. You can also submit your financial documents.

Get pre-approved: A loan officer will review your information and give you a pre-approval decision. This process may take up to 10 business days. If you’re pre-approved, you’ll get a letter showing the maximum amount you could borrow and the likely loan terms.

Make an offer and sign a purchase agreement: When you find the right home, work with a real estate agent to submit an offer, and include your pre-approval letter. It shows the seller you’re qualified to borrow the amount you’re offering. If the seller accepts your offer, you’ll sign a purchase agreement that details the transaction terms.

Apply and go through underwriting: When you submit your final application, Bank of America will review your information and purchase agreement, and may ask for additional documents.

Close on your loan: On closing day, you’ll bring a check for your down payment funds and closing costs, and sign the loan documents. The process can take a few hours, so make sure you review the paperwork carefully.

Bank of America’s website doesn’t disclose the bank’s minimum requirements to qualify for a home loan. You’ll need to speak with a loan specialist by phone or at a nearby branch to see if you qualify.

Here are the typical credit score, down payment, and DTI requirements for some common loan programs:

	Conventional	FHA	VA	Jumbo
Minimum credit score	620	500 or 580	Varies by lender, but typically 620	Usually 700
Maximum DTI	45%	50%	Varies by lender	Varies by lender
Minimum down payment	3%	3.5% with a 580 credit score; 10% with a 500 score	0%	10%

Bank of America does note that a credit score of at least 740 and a 20% down payment can increase your chances of qualifying for the best mortgage rates. You could still get a mortgage with a lower down payment, but you may need to pay for private mortgage insurance.

A refinance involves taking out a new loan that replaces your current mortgage. The new home mortgage may come with new terms, or it may allow you to use a different loan program. The process is similar to taking out a mortgage to buy a home. Here’s how to refinance with Bank of America:

Fill out a loan application: Provide your personal details and information about your current loan and the property. Bank of America will need to know your current loan balance and the estimated value of your home.

Submit financial documents: You’ll provide documents that verify your income, such as tax returns, 1099 forms, and W-2 forms.

Go through underwriting: Bank of America will review your finances, the property’s history, and its value before deciding whether to approve you.

Close on your new loan: Before signing your closing documents, compare your loan estimate against your closing statement to make sure you’re getting the terms you were expecting. Also, don’t be afraid to ask a real estate attorney or independent financial adviser to review the transaction details and documents with you.

Bank of America is licensed nationwide and has branch locations in 38 states and Washington, D.C. making it a good option if you want a lender with wide availability. It offers special programs for first-time homebuyers who qualify for down payment assistance and closing cost credits. While Bank of America has an array of common mortgage programs, it doesn’t offer USDA loans, which are designed for low- to moderate-income buyers in rural areas. Make sure you shop around with several lenders to get the best interest rates, terms, and loan programs.

Bank of America offers adjustable-rate mortgages, as well as conventional, jumbo, FHA, VA, and home equity loans. It also offers customized mortgage options, including the Affordable Loan Solution mortgage, which comes with down payment assistance.

Bank of America performs well in third-party reviews. For instance, it earned the No. 5 spot in J.D. Power’s 2023 U.S. Mortgage Origination Satisfaction Study with an above-average score of 747 out of a potential 1,000. But user reviews on Trustpilot are poor — Bank of America received a 1.3 out of 5 stars based on more than 2,000 reviews.

Bank of America doesn’t publicly share a list of fees it charges customers, but if you request a pre-approval letter, you’ll also receive a closing cost worksheet that lists the fees you may pay with the loan. Once you submit an application and receive the loan estimate, the fees typically can’t change.

The mortgage application process is quick and easy, and you have several options for submitting one. You can visit a financial center, work with a loan officer over the phone, or do most steps online.

Meet the contributor:

Kim Porter

Kim Porter is an expert in credit, mortgages, student loans, and debt management. She has been featured in U.S. News & World Report, Reviewed.com, Bankrate, Credit Karma, and more.

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Bank of America Mortgage Review 2024

Best for: Digital applicants and first-time homebuyers

Bank of America: Pros and cons