Get answers to your questions about the HELOC process Show
See Bank of America's website for full terms and disclosures. Does Bank of America Offer Home Equity Loans or HELOCs?Yes and no: The Bank of America offers home equity lines of credit (HELOCs) 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, you’ll 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 (HELOCs) 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. Bank of America Home Equity LoanAs mentioned, there is no direct Bank of America home equity loan option, only a Bank of America HELOC. You could create something similar to a fixed-rate home equity loan this way:
This might be worth doing because the Bank of America's HELOCs does not have any closing costs or conversion fees. it might be because HELOCs often have lower fees than home equity loans. Another alternative is a cash-out refinance. However, that will only be a viable option if you can lower the interest rate on your current loan. Cash-out refinancing allows borrowers to replace their existing mortgage with a new home loan while withdrawing some of their home equity in cash. Cash-out refinancing may be an appropriate option for tapping home equity if the new mortgage comes with better terms or the homeowner is looking to access a large amount of cash. Understand that a cash-out refi can be expensive because cash-out fees apply to the entire loan balance. If, for instance, you wanted to refinance a $200,000 mortgage and add $20,000 cash-out, the surcharge for cash-out would range from $550 to $7,150, depending on your credit. Comparing your Bank of America HELOC OffersWhen comparing home equity loans from other banks or lenders, it's helpful to consider the following:
The loan to value ratio or LTV is the current loan balance divided by the current appraised property value. To see how much you can borrow, multiply your home’s current value by the lender’s maximum LTV. If your home is worth $100,000 and the lender goes up to 90%, you’ll multiply $100,000 by .9 and get $90,000. Next, subtract your current mortgage balance. If you owe $70,000, you’ll subtract that from $90,000, giving you a maximum loan of $20,000. Home equity loans typically have fixed interest rates, making the monthly payments predictable. Maximum LTV, minimum credit score requirements, and debt-to-income thresholds vary by lender. Bank of America HELOCThe Bank of America HELOC is designed for eligible borrowers who want to use their home equity to consolidate debt, pay for home improvements, cover higher education expenses, or pay for any other significant purchase. Here are some of the necessary details to know about this loan option:
Bank of America HELOCs doesn't have application fees, closing costs, and annual fees. There's also no fee to convert a variable rate HELOC balance to a fixed-rate loan option. Additional debts, including credit cards, can also be rolled into the loan. The fixed-rate loan is essentially a backdoor way to get a home equity loan with Bank of America. How to Apply for Bank of America Home Equity Loans or HELOCsThere'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:
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. Once a HELOC offer is made to the borrower, they can decide whether to accept the terms or cancel the application. Remember that applying for a Bank of America HELOC does trigger a hard credit check, affecting credit scores. It may be helpful to use Bank of America's home equity line of credit calculator before applying to determine if pursuing a HELOC with the bank makes sense. Bank of America Expert and Consumer RatingsWe 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. Bank of America HELOCs ProsBank of America could work better for some borrowers than others. In terms of the advantages or benefits of getting a Bank of America HELOC, they include:
Bank of America HELOCS ConsWhen 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:
Alternatives to Bank of America Home Equity ProductsDon’t see what you want here? Other lenders offer home equity products that might be better for you. Remember to compare programs and pricing to get a good deal. How long does it take to get an equity line of credit?Applying for and obtaining a HELOC usually takes about two to six weeks. How long it takes to get a HELOC will depend on how quickly you, as the borrower, can supply the lender with the required information and documentation, in addition to the lender's underwriting and HELOC processing time.
What happens when a HELOC reaches maturity?A balloon home equity line of credit, your access to funds will end when you reach the maturity date, and you will need to pay your outstanding balance in full, in what is known as a balloon payment .
What credit score does Bank of America use for HELOC?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.
What is the difference between line of credit and equity?A home equity loan offers borrowers a lump sum with an interest rate that is fixed but tends to be higher. HELOCs, on the other hand, offer access to cash on an as-needed basis, but often come with an interest rate that can fluctuate.
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