Bank of America HELOC at the glance
- Fixed rate or variable: Variable, but can be converted to fixed
- How can I withdraw funds? Checks and Visa Access card. In-person withdrawals or by phone. Online and mobile banking
- Origination fee: No
- Loan to-value ratio: Unknown
- Funding time: Uncertain
Bank of America is a well-respected bank that offers home equity loans (HELOCs), which allow you to access up to $1,000,000 of your home equity. Borrowers might be eligible for rate discounts and the possibility to convert to fixed-rate loans.
- Convert to fixed-rate loans
- There is no application fee, closing cost or annual fee
- Up to $1 Million in Home Equity
- To complete your online application, you must have a minimum of $25,000 HELOC
- To qualify for the best rates, you must have great credit.
- You may also find lower rates from other lenders
Four things you need to know about the Bank of America HELOC
These are just a few of the most important features of the Bank of America HELOC.
1. Rate discounts are available
Bank of America offers borrowers several options to lower their interest rates. This can help you save money over the life of your loan.
You get a 0.25% discount on setting up automatic monthly payment and a maximum 1.5% off when you make your first withdrawal after opening an account. There is a 0.1% reduction in your interest rate for every $10,000 that you withdraw.
Additional discounts are available for Bank of America Preferred Reward members. Platinum Honors Tier receives 0.125% off the interest rate, while Gold Tier receives a 0.125% discount.
The combined qualifying balances of Merrill and Bank of America investment accounts determine the Tiers. You must have an active checking account with a minimum daily balance of $20,000 for Bank of America Preferred Rewards Membership.
2. Convertible to a fixed loan
The majority of HELOCs have variable interest rates, but the Bank of America HELOC allows you to convert all or part of your HELOC into a fixed-rate loan. Fixed payments can help budgeting become easier. The rate you have locked in will not change during the term.
This can provide protection from rising interest rates. It is important to remember that Bank of America’s fixed rates are usually higher than the variable rates. You’ll pay higher interest upfront, but you can save money in the long-term by paying lower interest rates if rates rise.
Converting your loan is free and you can have as many fixed-rate loans as you like. This allows you to lock in rates over time. You must convert at most $5,000 each time for a maximum of 90% of your credit limit.
3. The approval requirements for each project are not disclosed
Some lenders have approval requirements that you can see before you apply. This makes it easier to know if your chances of qualifying. Bank of America does NOT disclose this information.
You will need to submit a completed application and supporting documentation to find out if you have been approved. You can still apply without any obligation or payment. You can also speak to a Bank of America loan specialist over the phone to get the approval requirements before you submit the application.
4. Online closing of your HELOC is not possible
You can submit the application online but you will need to speak with a Bank of America loan specialist to complete the process. After approval, you will need to close your HELOC in-person at one of Bank of America’s branches.
You can only apply for a HELOC of less $25,000 if you call Bank of America to start your application. Online applications are not possible.
For those who prefer an entirely online experience, these requirements may be too cumbersome.
Do you think it’s a good idea to get a HELOC?
A home equity credit line can offer many benefits. A HELOC may be an easy way to access your equity.
A HELOC, unlike a cash-out refinance, or a home equity loan allows you to only withdraw what you need, instead of having to pay interest on the lump-sum loan. Your HELOC can be used for any purpose, including home repairs or to pay off higher-rate debts.
There are potential drawbacks, however. HELOCs are known for having variable interest rates and variable payments. Bank of America’s HELOC allows conversion to a fixed interest rate with certain conditions. However, budgeting can be difficult when using a variable rate HELOC. HELOCs can also be used as collateral to your home, so you may lose your home if your payments are not made on time.
What is a Bank of America HELOC good at?
The Bank of America HELOC is a great option for homeowners with significant home equity who want to have access to a large line of credit. Bank of America Preferred Reward members will receive lower interest rates than the public. This could make it a great choice for existing Bank of America customers that qualify for these perks.
How to Apply for a Bank of America HELOC
Bank of America has an online application for HELOC amounts of more than $25,000 that you can fill out. For smaller HELOC amounts, however, you will need to contact the bank’s customer service department to get started.
- There are no minimum eligibility requirements that can be found online. Contact Bank of America’s customer service specialists for more information.
- Start your application online by filling out basic information. Next, upload any required documents. You can then check your status online. The process will be guided by a Bank of America representative. Once you have been approved, you will need to close your HELOC in-person at a Bank of America branch.
- Gather income documentation, employment documentation, and information about your mortgage balance and payments. Also provide estimated property values and your property tax amounts. You will also need to provide the HELOC amount and how you intend to use it.
Are you unsure if Bank of America is the right choice for you? These are some alternatives.
- Figure This new lender uses blockchain technology to provide a quick, 100% online application process, approval process, and funding within five days.
- Third Federal This bank’s “Fixer Upper Home Repair loan” is a great option for those who need to borrow a small amount. It has a fixed rate and does not have closing costs.