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Friday 07/28/2017 Mortgage Rates

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Bank of America

Bank of America finance fixed-rate, adjustable rate, FHA and VA mortgages for homeowners looking to relocate or refinance. These mortgage plans have variations and combinations that are tailored to fit unique financial situations of borrowers. Below is a list of these programs in which you'll notice the interchange for more case-specific mortgages that help homeowners find the security, stability, and trust in their mortgage program.

Bank of America's Current Mortgage Rates
Loan Type Rate APR
30-Year Fixed-Rate Mortgage 3.375% 3.561%
5/1 Adjustable Rate Mortgage 2.500% 3.484%
 

Adjustable-Rate Mortgage

Customization is what makes ARMs (adjustable-rate mortgages) so popular with borrowers as it has many variations tailored to different budgets and financial goals. What distinguishes ARMs from FRMs is that interest rates are allowed to change according to the market index.

The hybrids available for ARMs are popular because they feature fixed interest rates for a set period of time - the adjustment period - before they gradually begin to adjust again. For example, in a 7/1 ARM, the "7" stands for the number of years of the adjustment period, whereas the "1" stands for how frequently (in years) the interest rate is meant to change after the adjustment period has passed.

It is important to know that in an environment with rising rates ARM interest rates will follow in the same direction. This may make it difficult for budgeting and home equity building. However, as you approach the beginning of each adjustment period, Bank of America will give you an estimate of the rates they expect will be put into effect.

Advantages:

  • Lower initial interest rates than that of FRMs.
  • Interest rates drop when others do.
  • Many hybrid ARMs to choose from with different adjustment periods to fit different financial goals.
  • Ideal for homeowners willing to refinance or relocate in a few years.
  • Available in interest-only jumbo loans.
  • Available in combination loans.

Fixed-Rate Mortgage

Perhaps the easiest to budget for, the FRM (fixed-rate mortgage) plan gives borrowers predictable interest rates, APR, and monthly payments for the entire duration of the loan. Bank of America features different loan terms for FRMs including the most popular ones: 15, 20, and 30-year FRMs. One of Bank of America's fixed-rate variations is the interest-only loan, which is a 30-year loan. It makes its due by allowing homeowners who have too many urgent needs to pay only for the interest charges over the course of the first ten years, after which they will need to pay interest plus the monthly payments for the next twenty years. Although the payments for the first ten years will be very low, homeowners risk "squeezing" the outstanding balance within the following 20-year term. The interest-only mortgage is available only for jumbo loans. 

Broadly speaking, the longer the loan term of a mortgage, the lower your monthly payments and the higher your interest rate will be. Choose the best loan term that's just right for you and take advantage of the fixed rates.

Advantages:

  • Easy to budget for.
  • Ideal for borrowers willing to live in the home at least until the end of the loan term.
  • Available in interest-only jumbo loans.
  • Available in combination loans.

FHA & VA Loans

Although they are not exclusive to first-time home buyers, FHA and VA loans are applicable to borrowers that are struggling to get a mortgage or recent graduates that could use a helping hand. The easy requirements of FHA and VA programs are due to the fact that the loans are insured by the government. Another reason is that applicants are required to pay protection money to the lenders - a mortgage insurance premium (PMI) to the FHA and a VA guaranty to the VA - just in case the borrower eventually defaults.

The down payment for the VA loan is none - so as to pay it off in the form of higher interest or larger closing costs - and exceedingly low - as low as 3.5% - for the FHA loan.

Advantages:

  • Complete financing.
  • Exceedingly low down payment requirements.
  • More lenient towards low-income borrowers and poor credit scorers.
  • Available in fixed rates.

Jumbo Loans

Jumbo loans offered by Bank of America can be anywhere between $417,000 and $721,050, depending on the state the borrower resides. They are referred to as "jumbo" loans because they exceed conforming high balance loan limits put forth by Fannie Mae and Freddie Mac. Because of this, they comprise of higher interest rates, more stringent underwriting, and larger down payments than conforming and FHA mortgages. 

Advantages:

  • Available in fixed and adjustable rates.
  • No need to take out more than one loan.
  • Interest rates are currently dropping for jumbo loans.

How to Apply for a Mortgage with Bank of America

As with any mortgage preapproval process, Bank of America will require the same documentation in hand to assess your creditworthiness, recent employment history, income details, debt, taxes and any other financial obligations to measure how much of a liability you will be.

The documentation needed:

  • W-2's for the last couple of years.
  • Proof of income.
  • Bank statements from all your accounts over the last two months.
  • Credit score.
  • Social Security number and driver's license.

To learn more about the mortgage approval process, click here.

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