How To Get A Mortgage Loan
Getting mortgage pre-approval before deciding on a property can be crucial to avoid looking at homes you cant afford. It will save you time and make the mortgage process more manageable.
Check our home affordability calculator to see if youll be able to afford a monthly mortgage payment.
To apply for a mortgage, you’ll need:
- Copies of your last two pay stubs
- A copy of your most recent tax return
- W-2 and/or 1099
- A state-issued photo ID, such as your passport or drivers license
- Statements of all your assets
- Bankruptcy discharge documents
- A recent
- Statements of any outstanding debts some lenders may require information about monthly credit card payments
- In some cases, lenders may require additional documentation, like a history of alimony payments and gift letters, so make sure to ask before applying.
Before applying for a mortgage, make sure to check your . Additionally, feel free to compare mortgage lenders. Even though lenders will pull your credit and it is considered a hard credit inquiry your score will not be affected if all the inquiries are done within 30 days. recognize this as shopping around for the best mortgage rate.
Lastly, check your debt-to-income ratio before applying, as well. Lenders prefer borrowers with a debt-to-income ratio lower than 36%, and many lenders will not even consider borrowers with a ratio higher than 43%.
Bank Of America Requirements
To qualify for a mortgage with Bank of America, youll need a minimum credit score of 620 for Conventional mortgage loans or 600 for FHA loans and a maximum debt-to-income ratio of 43%.
The down payment depends on the loan type, but you can put down as little as 3% through the Affordable Loan Solution program.
Documentation
Youll need to provide:
- Pay stubs from the past 30 days
- W-2s for the past two years
- Bank statements for all financial accounts, including investments, for the past two months
- Tax returns
- A copy of the signed purchase and sales agreement
- A profit/loss statement for the most recent quarter or year to date if youre self-employed
Bank Of America Reviews And Complaints
Bank of America has been accredited with the Better Business Bureau since 1949, boasting an A+ rating for its operations after closing over 6,000 customer complaints over the last three years.
However, it falls short in the customer service department, earning slightly over a one-star rating from 475 customer reviews. Its a similar story on Trustpilot, where the bank has a 1.3 rating based on 844 reviews as of August 2021. While customers praised the savvy online experience and diversity of mortgage products, many were frustrated with the service they received.
Its worth noting that these consumer reviews are for Bank of America as a whole and not for its mortgages specifically.
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What Kind Of Mortgage Can I Get With Bank Of America
Bank of America offers a variety of home loan options:
Fixed-rate mortgage: These home loans are the most common as they are straightforward and dependable, and youre protected from possible increases in your monthly payments. Because the loan has a set interest rate that doesnt change over the life of the loan, your principal and interest payments stay the same. Bank of Americas most popular fixed-rate loans have 15-year, 20-year or 30-year terms.
Adjustable-rate mortgage : This mortgage has an interest rate that may fluctuate depending on changes in a financial index that your mortgage is tied to. It typically starts with an initial interest rate thats lower than a fixed-rate mortgage but once your introductory period has ended, the rate can change. Your monthly payment may increase or decrease when that happens. The loans terms will dictate how many times the interest rate can change, as well as the highest level it can reach.
FHA loan: This is a Federal Housing Administration-insured loan which may be a good option if you have limited income and funds for a down payment or a lower credit score.
VA loans: If you are a current or former member of the U.S. military or National Guard , you may be eligible for this government-insured mortgage. VA loans have little or no down payment required.
Refinance: Bank of America offers refinance loans. Loan options include fixed-rate, ARM, FHA, VA and cash-out refinance loans.
Bank Of America Mortgage Mortgage Application Requirements
The bare minimum for a Bank of America mortgage is a credit score of 620, but that drops to 600 if youre applying for an FHA loan.
In general, it depends on the type of mortgage for which youd like to apply for some, you may need a higher credit score. Because Bank of America offers a wide array of options, qualifications vary drastically depending on what kind of home loan you want.
Of course, theyll also look at other factors, including your debt to income ratio and employment verification.
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Best Mortgage Lenders Of October 2021
Before buying a home or refinancing a mortgage, shop around to find the best mortgage lender for your circumstances.
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list ofour partnersandhere’s how we make money.
When you buy a home or refinance your mortgage, it’s a big financial decision, so it makes sense to find the best mortgage lender you can. To do that, shop for offers from at least three lenders.
Compare mortgage rates and other loan terms such as fees, time to close, the availability of online application and loan tracking, and customer service offerings. Taking the time to make an informed decision can save you thousands of dollars over the life of your loan.
To help you choose a mortgage lender, NerdWallet has picked some of the best out there in a variety of categories to help you get the home loan with the best mortgage rate, term and fees.
When you buy a home or refinance your mortgage, it’s a big financial decision, so it makes sense to find the best mortgage lender you can. To do that, shop for offers from at least three lenders.
To help you choose a mortgage lender, NerdWallet has picked some of the best out there in a variety of categories to help you get the home loan with the best mortgage rate, term and fees.
Bank Of America And Naca Expand Mortgage Program To $15 Billion To Help Low
Mortgage Program Proven to Significantly Reduce the Wealth Disparity Gap
Bank of America and the Neighborhood Assistance Corporation of America today announced the expansion of their national affordable homeownership mortgage program, with a goal of providing $15 billion in mortgages to low-to-moderate income homebuyers through May 2027. This partnership continues to be instrumental in helping to build wealth for those historically locked out of affordable homeownership, thus reducing the racial disparity gap.
For 25 years, the NACA/Bank of America Homeownership Program has provided mortgages for individuals and families. The mortgages come with no down payment, no closing costs , at a below market fixed rate. This partnership has provided affordable homeownership for more than 9,100 households over the last two years and over 42,000 mortgages through the program since 1996.
âExpanding this relationship enables Bank of America to provide more mortgages to families at a time of substantial need and opportunity in America,â said Andrew Plepler, global head of Environment, Social, and Governance at Bank of America. âWe are focused on helping stabilize neighborhoods, maximize homeownership opportunities for working people and families, and build generational wealth through homeownership.â
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Bank Of America Mortgage Process
Bank of Americas Digital Mortgage Experience lets the homebuyer use the companys website or mobile banking app to apply for a mortgage. If youre already a Bank of America customer, the app will pre-fill much of the application for you, and many clients get conditional approvals the same day.
Another perk for existing customers: If youre enrolled in Bank of Americas Preferred Rewards program, you can qualify for a $200 to $600 reduction in the origination fee the bank usually charges for purchase or refinance mortgages .
After submitting your application, Bank of Americas Home Loan Navigator app lets you track its status and see any outstanding to-dos needed to keep the application moving. Home Loan Navigator lets you sign and submit many loan documents online, and you can also choose to receive your disclosures digitally, so you dont have to deal with a mountain of paperwork.
Would You Qualify For A Mortgage From Bank Of America
Similar to many large banks that offer FHA loans, the lowest FICO credit score that’s generally accepted is 600. This isnt a hard and fast rule, as more than your credit score is considered during the process, but thats the general rule of thumb. Conventional mortgages will usually require at least a 620 FICO score.
In addition to credit score, youll need a solid work history, or proof of income as a freelancer or small business owner. Down payment savings are another consideration. You want to aim for 20% of the home purchase price. For example, if youre buying a $250,000 home, ideally, youd have $50,000 for the down payment. Obviously this isnt an option for every lender. FHA loans have lower down payment requirements and Bank of Americas Affordable Loan Solution® requires just 3%. With both those options, however, youll pay a monthly insurance premium and upfront insurance premium . This means a higher monthly payment. If youre apply for a conventional loan with less than 20% down payment, youll have to get private mortgage insurance . Like MIP, PMI is added to your monthly mortgage payment.
Your lender will also consider your debt-to-income ratio . DTI helps a lender determine if you can afford the projected monthly mortgage payments. In general, you want to aim for 36% or less. Bank of America doesnt stand behind a specific limit, but if you have more than around 44%, most lenders wont consider you for a loan.
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Bank Of America Transparency
Bank of America allows customers to easily view interest rates online based on a loan amount, down payment, and zip code. The banks intuitive website also has basic information about the mortgage loan process. However, getting a clear answer to anything not listed on the website proved to be challenging.
Although the bank provides an online calculator to estimate closing expenses for those purchasing a home, customers looking to refinance their home must call a lending specialist during regular operating hours to get a loan estimate. A lending specialist told us that this process requires a hard pull of your credit, as rates and fees can depend on your credit score.
The bank does not list the minimum credit scores needed for each loan program. We called the bank multiple times and received ranges from 620 to 660 for conventional loans. It was difficult to get minimum credit score requirements for loan programs other than conventional loans.
How Bank Of America Shines
If youre thinking about buying or refinancing a home, Bank of America could be a good choice if:
- Youre more comfortable doing business with an established, major bank
- Youd like the flexibility of applying online or working with a loan officer in person, over the phone, or by video conference
- Youre an existing B of A customer who would benefit from having much of your application pre-filled and potentially qualify for a discount on origination fees
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Bank Of Americas Financial Products
Bank of America doesn’t offer personal loans, but the bank does provide several other loan types that include both secured and unsecured options. It is one of the largest lenders in the country and is known for providing loans with competitive rates and terms.
Here are some of the credit and loan products Bank of America offers:
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
-
Variety of loan products: 4 of 5 stars
-
Online convenience: 5 of 5 stars
-
Rates and fees: 4.5 of 5 stars
-
Rate transparency: 5 of 5 stars
Its one of the largest banks in the world, but Bank of America doesnt 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 provides multiple loan options, high-tech customer service and a step-by-step walk-through of the underwriting process as it works to make getting a mortgage easier, says John Schleck, senior vice president of centralized and online sales.
Here’s how Bank of America’s mortgage offerings stack up.
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Is Bank Of America Trustworthy
The Better Business Bureau gives Bank of America an A+ in trustworthiness. A strong BBB grade indicates a company responds to customer complaints effectively and is transparent about business practices.
Bank of America ranks second in customer satisfaction in the JD Power 2020 Primary Mortgage Origination Satisfaction Survey, after Rocket Mortgage.
However, Bank of America does have some recent public scandals involving discrimination:
- The Department of Justice charged Bank of America for unfairly denying home loans to adults with disabilities, even though they qualified for loans. Bank of America paid around $300,000 total to people who were refused loans.
- The Department of Labor required Bank of America to pay $4.2 million to people who claimed the bank discriminated against women, Black, and Hispanic applicants in the hiring process.
If these issues bother you, you may prefer to use a different lender.
Bank Of America Mortgage Review 2021
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list ofour partnersandhere’s how we make money.
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Affordable Loan Solution Mortgage
This is a special mortgage specific to Bank of America and is aimed at helping people buy a home without saving up for a huge down payment. Youre only required to pay 3% down and the upside here is that you dont have to pay any mortgage insurance premium. That can save you both in upfront closing costs and in your monthly payments.
If youre a first-time homebuyer, you may be required to complete an education course before closing on your home loan. Additionally, depending on where you live, there may be income and loan amount limits. Bank of America also has two down payment assistance programs that offer up to $7,500 or $10,000 toward a buyers down payment and/or closing costs.
Mortgage Loan Products At Bank Of America
Like most big banks, Bank of America has a good portfolio of mortgage products from which you can choose:
- Fixed-rate mortgages As well as the standard 30-year fixed-rate mortgage, you can opt to borrow for 20 or 15 years
- Adjustable-rate mortgages Lets you fix your mortgage rate for the first five, seven, or ten years, after which it will float with the market
- FHA loans These loans backed by the Federal Housing Administration let you buy with a down payment as low as 3.5%, but they come with mortgage insurance payments every month
- VA loans Only active or former service members and their surviving spouses are eligible. Those that are can buy with $0 down and no mortgage insurance
- Jumbo loans When you want to borrow more than conforming mortgages allow
- Affordable Loan Solution mortgage This proprietary mortgage lets you buy with just 3% down payment and no mortgage insurance. However, there are caps on income and loan limits to qualify
Bank of Americas in-house loan, theAffordable Loan Solution mortgage, could be a good option if you have a low-to-moderateincome and minimal savings.
Getting a loan with such a low downpayment and no mortgage insurance is rare, except for those eligible for VAloans.
Some borrowers can use the USDA loan program to buy with no down payment, but theyll have to look elsewhere. Bank of America is not an authorized USDA lender.
Refinance loan options and home equityloans at BofA
Bank of America doesnot offer a fixed home equity loan.
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Compare Mortgage Rates From Multiple Lenders
Like any traditional bank or direct lender, Bank of America can only offer you its own products, which may not offer the best rates and terms you could qualify for. So before you decide if a Bank of America home loan is the right choice for you, make sure to compare options with other lenders.
Credible lets you compare personalized mortgage rates from multiple lenders who offer refinancing and purchase loans. If you qualify, Credible can provide a streamlined preapproval letter in just 3 minutes. Your data is never sold, so youre protected from spammers. If you find an option you like, Credibles digital platform automates much of the origination process.
Keep in mind that not all loan products are available through Credible.
Matt Carter is a Credible expert on student loans. Analysis pieces hes contributed to have been featured by CNBC, CNN Money, USA Today, The New York Times, The Wall Street Journal and The Washington Post.
