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Bank of America Mortgage Review: Top Lender for Affordable Mortgages

Review Updated
Kimberly Rotter, AFC®
Author: Kimberly Rotter, AFC®
Kimberly Rotter, AFC®
Kimberly Rotter, AFC®
Accredited Financial Counselor®

Kimberly is a career writer and editor with more than 30 years' experience. She's a bankruptcy survivor, small business owner, and homeschool parent. In addition to writing for The Motley Fool, she offers content strategy to financial technology startups, owns and manages a 350-writer content agency, and offers pro-bono financial counseling.

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Nathan Alderman
Fact Checked: Nathan Alderman
Nathan Alderman
Nathan Alderman
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Nathan Alderman has been a full-time Motley Fool employee since 2005, making errors his arch-enemies in a variety of roles including a six-year stint as the dedicated fact-checker for The Motley Fool's premium newsletter services. As Motley Fool Money's Compliance Lead, he makes sure that all the site's information is accurate and up to date, which ensures we always steer readers right and keeps various financial partners happy. A graduate of Northwestern University's Medill School of Journalism, Nathan spends his spare time volunteering for civic causes, writing and podcasting for fun, adoring his wife, and wrangling his two very large young children.

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Bank of America Mortgage might be for you if: You're a creditworthy first-time home buyer who is low on cash. Bank of America Mortgage is also a great option for current customers with significant balances at the bank or at Merrill Lynch, as that can lead to rate and fee discounts. Check out our detailed Bank of America Mortgage review to decide if Bank of America is the best mortgage lender for you.

Ratings Methodology
Bank of America Mortgage

Best for: First-time home buyers and diverse loan programs

Bank of America Mortgage

Rating image, 5.0 out of 5 stars.
5.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor

Bottom Line

Bank of America is one of the largest banks in the U.S., offering a wide variety of financial products in addition to its mortgages. Few lenders can match the lineup of loan products and terms. Bank of America offers a Preferred Rewards program for borrowers who have bank accounts at the bank and investment accounts at Merrill. Borrowers can qualify for an origination fee or interest rate reduction based on their eligible tier at the time of application.

Min. Credit Score

  • Undisclosed

Min. Down Payment 0% VA loans 3.5% FHA 3% Conventional loans, Affordable Loan Solution® mortgage, Freddie Mac Home Possible® mortgage 5% Other loans

  • 0%-3%

Key Features

  • Wide range of financial products
  • Preferred Rewards program
  • Ability to apply entirely online
  • Loans up to $2 million

Loan Types

  • Conventional
  • FHA
  • VA
  • Jumbo

Fixed Rate Terms

  • 30y, 20y, 15y

Adjustable Rate Terms

  • 10/6, 7/6, 5/6

Top Mortgage Lender

It's important to consider multiple mortgage lenders to find a good fit for you. We've listed one of our favorite lenders below so you can compare your options:

Lender Min. Down Payment Credit Score Next Steps
  • 0% - 3.5%
  • 580
Circle with letter I in it. 580 FHA 620 Conventional and VA 700 Jumbo
Apply Now for Better

Our mortgage rating methodology

At Motley Fool Money, mortgages are rated on a scale of one to five stars, with five stars meaning "best." We primarily focus on rates and fees, customer service, and loan versatility. This includes factors like application process, customer service channels available, and a variety of loan products.

See our full methodology here: Ratings Methodology

Full Bank of America Mortgage review

Bank of America offers the selection of home loans that you'd expect from a big national lender. It also specializes in low down payment home loans. Some borrowers will even qualify for free money toward their home purchase.

Pros

  • Low down payment mortgages
  • Down payment assistance
  • Competitive HELOC
  • Transparent mortgage rates

Cons

  • No USDA loan
  • No non-QM loans

Bank of America Mortgage mortgage rates

Bank of America Mortgage's mortgage rates trend about the same as the national average. Bank of America's mortgage interest rates are competitive. When they run a little higher than what other lenders charge, it may be because Bank of America's fees are lower.

The best way to compare mortgage rates is to apply with several lenders (on the same day, if possible) and get a loan estimate from each one. The loan estimate tells you the details of the loan you're being offered, including all the fees.

It should also tell you the APR. The APR is the cost of the loan over one year including the interest and fees, so on a mortgage, it's typically higher than the interest rate. By comparing APRs, you could figure out whether a lower rate is washed out by higher fees.

Bank of America Mortgage refinance rates

Bank of America Mortgage's refinance rates trend lower than the national average. When we checked, Bank of America's refinance interest rates were lower than the rates for purchase loans.

Bank of America Mortgage fees

Bank of America's fees are fair and in line with what other top mortgage lenders charge.

Bank of America doesn't charge you to apply, but there is an origination fee collected prior to loan closing. This fee varies depending on the state the property is located in, loan amount, property type product caps, and relationship discounts.

Most borrowers can also expect to pay closing costs, which can fluctuate based on the type of property and loan and the market. Bank of America does not charge application fees or closing costs for HELOCs under $1 million.

Ways to save money with a Bank of America Mortgage mortgage

Bank of America offers a few ways for borrowers to save money on their home loan, including grant programs and relationship rewards.

America's Home Grant® program

How to qualify: Buy a primary residence in certain locations. There are income limits and loan amount limits for this grant.

What you get: Qualified borrowers buying a primary residence in certain locations can receive a lender credit of up to $7,500. The grant can be used toward one-time closing costs (such as title insurance, recording fees, or mortgage discount points). This money does not have to be repaid.

Down Payment Grant program

How to qualify: Meet income limits, loan amount limits, and location restrictions. Also, you'll need to take a home buyer education course.

What you get: Qualified borrowers buying a primary residence can get up to 3% of their home's purchase price or up to $10,000 toward their down payment. This money doesn't have to be paid back.

If you qualify for both the Down Payment Grant and America's Home Grant programs, they can be combined to save you even more money.

Preferred Rewards program

How to qualify: Be a member of Bank of America's Preferred Rewards program. Some borrowers may be required to enroll in Bank of America's PayPlan before their closing date to receive the full benefit.

What you get: Members of Bank of America's Preferred Rewards program may be eligible for a reduction in their origination fee or interest rate for their purchase or refinance loan.

The amount of the reduction is determined by rewards tiers and ranges from $200 off the origination fee to a 0.375% interest rate reduction. Tiers are determined by your three-month combined average daily account balance.

Tier Gold Platinum Platinum Honors Diamond
Average Daily Balance Requirement $20,000 to <$50,000 $50,000 to <$100,000 $100,000 to <$1 million $1 million to <$10 million
Mortgage Benefit $200 off origination fee $400 off origination fee $600 off origination fee 0.250% off rate
Data source: Bank of America.

Bank of America Mortgage customer service

As a behemoth bank with tens of millions of account holders, Bank of America is all but guaranteed to have its share of both happy and unhappy customers.

What we found online about Bank of America Mortgage is that some customers felt they were treated poorly. These customers believe that other mortgage lenders are faster and cheaper than Bank of America.

We also found many customers who raved about Bank of America's loan officers and said they had a great experience. These folks found Bank of America to be patient, knowledgeable, and helpful.

Bank of America gets consistently high ratings in independent mortgage origination customer satisfaction studies.

How to apply for a mortgage with Bank of America Mortgage

The first step in applying for a mortgage with Bank of America is to get prequalified. You can start the process online by answering a few questions. Bank of America's website states that some borrowers can hear back about their prequalification status within an hour.

Pre-approval can take a little longer, but borrowers should expect to receive a pre-approval letter within 10 business days after submitting the required information.

When you're ready to apply, have the following documentation on hand:

  • Income information
  • Bank account numbers or bank statements
  • W-2 statements
  • Tax returns from the previous two years

You'll also need to meet Bank of America's minimum credit score requirement (it varies, depending on the loan). And you'll need cash for a down payment. VA borrowers don't need to make a down payment but may need to pay certain closing costs that can't be rolled into the loan.

To get a lender's best offer, you typically need to do two things:

  • Have an excellent credit score
  • Pay for mortgage discount points

Many people have less-than-perfect credit scores, and that's okay. Most mortgage lenders offer several different interest rates, depending on your score. You can ask the lender what score you'd need to get the next lowest interest rate. If your score is close to the cutoff, it might be worth it for you to postpone applying until you can bring it up.

Mortgage discount points are prepaid interest. You pay a fee up front, and the lender gives you a permanent discount on the interest rate for your loan. Each point usually costs 1% of your loan amount. The rate discount varies, but could be about one-eighth of a percent. If you're planning to have the mortgage for at least several years, you might be able to save by buying points.

Some lenders allow you to roll your mortgage discount points into your loan rather than paying for them in cash.

About Bank of America

Through mergers, Bank of America has roots going back 240 years. The Massachusetts Bank, opened in 1784, is Bank of America's oldest predecessor firm.

Another branch of Bank of America's history began in 1906, when a powerful earthquake struck San Francisco and damaged many of the large banks. A man named Amadeo Peter Giannini saved the gold and silver from his one-room bank, the Bank of Italy, by hiding it in crates under oranges to get past looters.

He soon set up a small bank on a North Beach wharf in San Francisco and offered handshake loans to struggling residents. Giannini's bank was eventually renamed Bank of America. By the time he died, Bank of America was the largest bank in the world.

Today, Bank of America is global. It has a strong presence online, with approximately 58 million online users. Bank of America's AI-powered assistant, Erica, is the banking industry's first widely accessible virtual financial assistant.

FAQs

  • Bank of America's mortgage interest rates tend to run about the same as the national average. Bank of America charges less for its lowest rate than some other lenders. (There is typically an upfront cost to get a lender's rock-bottom rate.) It's easy to check Bank of America mortgage rates, as they are published on the bank's website.

  • Yes. Bank of America offers many mortgage options that can help borrowers get into homes. It's a wonderful choice for low- and moderate-income borrowers, especially those who qualify for up to $17,500 in non-repayable grant funds and lender credits for the down payment and closing costs.

  • Yes. Bank of America's low rates make it an excellent choice for a refinance loan.

  • Because Bank of America doesn't disclose its minimum credit score requirement, the best way to find out if you qualify is to contact one of its lending specialists.

    Elsewhere, you can apply for an FHA loan with a 580 credit score and a 3.5% down payment (or a 500 credit score and a 10% down payment). Conventional loans typically require a credit score in the 620 to 640 range. Higher credit scores could help you qualify for lower interest rates.

  • Bank of America offers mortgage loan options to meet the needs of most borrowers. Choices include:

    • Fixed-rate mortgage
    • Adjustable-rate mortgage
    • Jumbo loan
    • FHA mortgage
    • VA mortgage
    • Refinance mortgage
    • Low down payment mortgage
    • Affordable Loan Solution® mortgage
    • Conventional mortgage
    • Doctor loan (physician loan program)