Hello everyone, if you are searching to know about a Home Equity Line of Credit (HELOC)? then you are at the right place to learn and gain full guidelines for the Bank Of AmerBank of America Home Equity Line of Credit (HELOC) Review. Here we explain in a step-by-step process so that you can understand to clear your doubts.
What is Bank of America HELOC
HELOCs are the sole home loans offered by Bank of America, in case anyone is interested. Due to potential interest rate reductions and comprehensive online services, these are still a good choice.
Since Bank of America’s founding in 1784, it has a long history of offering financial services. After merging with NationsBank in 1998, Bank of America became the first totally coast-to-coast bank in the nation.
Bank of America, which is widely available and provides a variety of financial products, such as home equity lines of credit, has a reputation for accessibility and is widely used (HELOC). HELOCs give you the flexibility to take out a variety of quantities of money at affordable rates while drawing on the equity you’ve established in your home.
Eligibility & Application: How To Get a Bank of America HELOC
Only borrowers who own their homes outright are eligible for home equity loans. You have $75,000 in equity if your house is worth $200,000 but your mortgage is only $125,000 right now. However, you won’t be qualified for a Bank of American HELOC if you only recently bought a property and have little to no equity in it.
The Bank of America HELOC application procedure is straightforward, and the majority of the stages can be completed online if you feel that you have enough equity to qualify. There is no pressure to accept the HELOC conditions if you don’t like them, and filling out an online application only takes approximately 15 minutes.
You can monitor the status of your application online. And if you’ve received pre-approval, a Bank of America expert will walk you through the next steps of the process step by step. You can instantly access your funds via online banking, phone, in-person at a Bank of America store, or by receiving a check in the mail. There are no application fees or closing costs involved.
Bank of America HELOC Rates & Fees
The HELOC rates and costs offered by Bank of America are in line with industry averages. For the first 12 months, the lender is offering an introductory APR of 3.74%; after that, the rate increases. To find out what you may expect to spend, it’s essential to seek a rate quote as the usual APR after the introductory period differs by state and is influenced by your credit score. Furthermore, if you set up autopay, you’ll receive a rate reduction of 0.25 percent.
Like with most HELOCs, your credit limit is 85% of the value of your home less any outstanding debt. Your probability of being accepted to borrow the entire amount permitted based on your loan-to-value ratio will increase if you have a good credit history and few other sources of debt. Additionally, Bank of America doesn’t really charge any application, closing, or yearly maintenance fees.
Benefits Of Bank Of America HELOC
Reviews of Bank of America’s HELOC benefits are generally favorable. The financial servicer places a high premium on accessibility by assigning clients to home equity specialists who can address their inquiries, help with applications, and speed up the borrowing procedure.
Bank of America also makes the following offers to new HELOC applicants:
- Calculators to determine home equity, projected property value, and repayment alternatives
- interest rate reductions when making the first withdrawal after starting an account
- Additional interest rate reductions are available to current Bank of America clients in the Preferred Rewards program. These reductions may reach a maximum of.375%.
- Easy-to-use mobile banking applications that provide you immediate access to your money
Bank of America also provides a Fixed Rate Loan Option if you’re worried about a variable interest rate’s unpredictability.
For a specified period of time, a fixed-rate loan guarantee that your rate won’t change. For people who have varying home equity lines of credit, Bank of America offers a rapid transfer service, making this option available. In addition, there are no transfer fees. Borrowers can safeguard themselves from rising interest rates by choosing a fixed-rate option, which also ensures that their monthly payments will be consistent.
Flexible Borrowing Capacity
With a Bank of America home equity line of credit, borrowers can benefit from revolving credit without the fees that frequently come with these loans. A HELOC works similarly to a credit card in that you can loan up to your credit limit and then more as you pay off your balance.
However, weigh the costs of making a $5,000 purchase with a credit card, where the interest rate may be in the teens or higher, vs borrowing the same $5,000 with a HELOC that has an introductory rate of 3.74%. It saves a lot of money on interest.
Compared to home equity loans, which give a fixed loan amount and no opportunity to borrow more in subsequent months, a HELOC’s rotating nature makes this choice more flexible. If the initial loan wasn’t enough to pay for expenses, this can entail taking out further loans in the future. HELOCs avoid this issue.
There are several discounts available on Bank of America HELOCs. They consist of:
- A 12-month introductory APR of 3.74%
- A 0.25 percent autopay discount
- Discounts on Preferred Rewards for current Bank of America customers range from.25% to.375% on interest rates on withdrawals made at account opening.
- Smart borrowers can drastically lower their HELOC borrowing expenses both upfront and over the long run by combining these reductions.
Bank of America provides extensive online support. Either phone a support expert directly or use live chat to communicate with one from within your computer. You can also ask for a callback if you don’t have time to stay on hold if the person answering the phone isn’t immediately available. Alternatively, you can arrange a meeting to address any issues you may have with a representative in person.
Customers can use a number of useful tools on the company’s website, such as a calculator to figure out how much they can borrow and how much they will have to pay back. These tools can be used to determine the HELOC cost as well as the worth of your home.
Downsides Of HELOC
Although Bank of America’s home equity lines of credit is frequently the best option for borrowers, there have been numerous concerns about these loans as well. Some borrowers expressed disbelief at the credit line they received or the fees they had to pay. Others remarked that compared to calling in, submitting an application online was far more convenient and accessible. For some people, this can be a deal-breaker.
Risk of Foreclosure
Foreclosure is always a possibility if you borrow money using your house as collateral. Your house serves as the collateral you give the bank for both home equity loans and lines of credit because they are both secured by it.
Your home could be forfeited if you are unable to make your HELOC payments since the bank will take the collateral as payment for your debt. Thus, Bank of America or any other lender’s home equity lines of credit should only be used by people who are confident in their ability to pay off the debt. A HELOC should never be used to fund careless expenditures.
No Home Equity Loans from Bank of America
Due to the institution’s limited selection, which excludes traditional home equity loans, those seeking flexibility in their home financing options may be dissatisfied with Bank of America.
Borrowers who wish to borrow money from Bank of America using their homes as collateral have no other option except to apply for home equity lines of credit. However, there is a possibility for borrowers to temporarily lock in their HELOC rate, which, by removing some of the volatility, mimics some of the advantages of a home equity loan.
Frequently Asked Questions [FAQs]
Is there a downside to a HELOC?
The drawback of a HELOC is that your house must serve as collateral. If you are unable to repay your HELOC according to the agreed-upon terms, you risk losing your house to foreclosure.
Is it smart to get a HELOC?
When you use a HELOC to raise your home’s value, it can be a wise investment. However, it can turn into another form of bad debt if you utilize it to cover expenses that you would not otherwise be able to cover with your present income and resources.
What happens to HELOC if the market crashes?
Your equity will also be impacted if the market changes and your home loses value in the assessment. When this occurs, your lender may impose a HELOC reduction so that the remaining equity determines your borrowing limit. A HELOC freeze will happen if you currently have negative equity.
Can you pay off your HELOC early?
It is possible to close a HELOC early. There normally aren’t any pre-payment penalties, and you can always make partial payments or your entire outstanding sum at any point over the term of your HELOC.
While it’s true that Bank of America only provides home equity lines of credit—not home equity loans—the financial institution does give borrowers a lot of advantages, including easily available customer assistance and a variety of useful online tools. Bank of America HELOCs will benefit current Bank of America Preferred Rewards customers the most because of interest rate reductions, although non-members can also obtain a loan at a fair rate.