Bank of America offers an array of conventional fixed-rate mortgages (at 15- and 30-year terms) and adjustable-rate mortgages (5/1, 7/1, and 10/1; the number before the slash refers to the fixed-rate term, after which the rate is adjustable annually). It also offers jumbo fixed- and adjustable-rate loans, as well as FHA and VA loans. Its Affordable Loan Solution mortgage allows first-time buyers in certain areas of the country (with some maximum income and loan limits, depending on the location) to put only 3 percent down without having to pay private mortgage insurance premiums.
Homeowners can refinance with traditional mortgages or cash-out refinances. BofA also offers fixed- and adjustable-rate home equity lines of credit.
Rates and Fees
Pay close attention to the rates listed on the BofA website, as they assume borrowers will purchase discount points – no rates are listed with zero points – making interest rates appear to be lower than other lenders’ advertised offers. Taking that into account, the bank’s interest rates are about the same as those of other large lenders, such as CitiMortgage, but its APRs are higher. BofA is one of the few lenders to offer a closing cost calculator, which lets you estimate the cost of points, origination fees, mortgage insurance, escrow payments for taxes and insurance, and all third-party fees (such as appraisal and title insurance). The estimate can be a scary number, but that’s better than being surprised on the day of closing.
Bank of America Preferred Rewards customers can get $200 to $600 off their loan origination fee, depending on the size of their accounts.
Bank of America has more Consumer Financial Protection Bureau complaints (as a percentage of its loan volume) against it than even Wells Fargo. Last year, BofA finished paying off its nearly $17 billion settlement for having sold mortgage-backed securities without disclosing the high risk of those mortgages just before the housing crisis. It continues to be the target of class action lawsuits from borrowers claiming the bank misled them about how to apply for mortgage modifications, sometimes allegedly destroying their applications for no reason, causing them to default and go into foreclosure.
With that in mind, you can still get a good deal with BofA. The company came in ninth in J.D. Power’s 2017 customer satisfaction survey, so it appears to be doing right by more-recent borrowers.
You can apply for a mortgage at one of the bank’s 4,500 branches, by phone or online with its new Digital Mortgage Experience. The BofA website is user-friendly, with loads of info for first-time homeowners. The Down Payment Center even helps lower-income applicants find local programs that offer financial assistance for purchasing a home.