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Published: Sep 06, 2023 15 min read
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In an effort to combat inflation over the past two years, the Federal Reserve has been raising benchmark interest rates at breakneck speeds. This has adversely affected interest rate-sensitive industries like mortgage lending. However, in a historical context, interest rates for mortgages are still comparatively low. In 1990, the 30-year mortgage rate was 10.13%, and in 1981, it reached as high as 16.64%. So despite mortgage refinancing slowing in the past year, it’s still an option for many Americans.

If you’re looking for one of the best mortgage refinance companies in the country, Bank of America offers several rate-and-term mortgage refinance programs, including fixed- and adjustable-rate refinance loans, FHA refinance loans, VA refinance loans and cash-out refinance loans. The country’s second largest bank by total assets, Bank of America offers the combination of enticing discounts for existing customers, an enormous network of physical locations and a strong line-up of mortgage refinance products.

Read on for our full review of Bank of America’s mortgage refinance programs to find out if the lender is the right fit for your needs.

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Best mortgage refinance loans for first-time homebuyers

Buying or refinancing a home for the first time is often an overwhelming experience filled with new terminology, unfamiliar processes and a lot of paperwork. Bank of America understands this, which is why the lender provides a detailed educational section on its website with tips for first-time homebuyers and loan calculators to help you determine how large of a mortgage or refinance loan you can afford. Inside the first-time homebuyer section, you’ll find guides explaining all of the terminology you need to know, overviews of the mortgage and refinance process and detailed descriptions of various loan options.

Bank of America's array of refinance products helps ensure that most first-time homebuyers can find a refinance loan that fits their needs. Refinancing is made especially attractive for first-time homebuyers who already have an existing Bank of America account, as the lender offers various discounts for customers that already have a relationship with the bank.

Bank of America mortgage refinance pros and cons

Pros
  • Expansive educational section for first-time homebuyers
  • Interest rate and origination fee discounts with Preferred Rewards program
  • Branches in many states
Cons
  • Doesn't offer USDA streamline refinance loans
  • FHA and VA refinancing only for customers with existing Bank of America loans
  • High combined account balance required for discounts

Pros explained

Expansive educational section for first-time homebuyers

Bank of America provides a vast educational section on its website for first-time homebuyers, including a video series, FAQs and guides with essential information on the mortgage and refinance process. The aim is to help potential buyers become more familiar with the process and more confident in their loan decisions. Resources like these can help you understand whether or not now is a good time to refinance your mortgage.

Interest rate and origination fee discounts with Preferred Rewards program

Through Bank of America's Preferred Rewards program, customers can receive up to 0.375% off their interest rate and up to $600 in origination fee discounts when they purchase a home or refinance through the bank. This is a great incentive for existing Bank of America customers who are looking to purchase or refinance their first home.

Branches available in many states

For customers who prefer to speak with someone in person, Bank of America has physical locations in 37 states and Washington, D.C. This makes it easy for you to ask questions and receive in-person advice about your loan options. If you don't live near a branch, Bank of America's online application process is still an easy and straightforward way to apply for financing.

Cons explained

Doesn't offer USDA streamline refinance loans

Bank of America doesn't offer USDA streamline refinances, making it difficult for those with a USDA loan to take advantage of lower rates available in the market.

FHA and VA refinancing only for customers with existing Bank of America loans

If you're looking to refinance either an FHA or VA loan with Bank of America, you must have an existing home loan with the bank in order to qualify.

High combined account balance required for discounts

Bank of America's Preferred Rewards program requires you to have a combined total balance of at least $20,000 in your Bank of America deposit accounts. While this introductory Gold tier may require a large minimum balance, higher tiers — like the Platinum, Platinum Honors, Diamond and Diamond Honors — provide better discounts but require bigger minimum combined account balances of $50,000, $100,000, $1 million and $10 million, respectively.

Bank of America mortgage refinance offerings

While it may be missing USDA streamline refinances, Bank of America offers a fairly comprehensive suite of mortgage refinance products to fit most borrowers. This includes fixed-rate and adjustable-rate refinance loans, cash-out refinance loans, and FHA refinance loans and VA refinance loans for those who already have an FHA or VA loan.

While exact minimum financial requirements aren't listed for these loans, most lenders require a FICO credit score of at least 620 and look for a debt-to-income (DTI) ratio of 36% or less. In addition to traditional credit score requirements, Bank of America also considers alternative credit data for some borrowers, such as utility and rent payment history. If you refinance with less than 20% equity in your home, you'll also need to factor in the costs of carrying mandatory private mortgage insurance.

The following section examines each of Bank of America's refinance products in more detail.

Fixed-rate refinance loans

Fixed-rate refinance loans provide borrowers with the same interest rate for the entire term of the loan. This means that your monthly payments will largely remain the same over the life of the loan, even if market rates fluctuate. Bank of America offers fixed-rate mortgage refinance loans in terms of 15, 20 and 30 years. This type of loan is ideal for those who are looking for a more stable payment and don't plan to move in the near future.

Adjustable-rate refinance loans

Adjustable-rate refinance loans feature an initial period with a low fixed interest rate followed by a period with a variable rate that changes at regular intervals. Bank of America offers adjustable-rate refinance loans in terms of five, seven and 10 years with six-month adjustable periods. This means you'll enjoy a fixed rate for the initial term, after which the rate may adjust every six months. This type of loan is ideal if you plan to move in the near future, expect your income to increase or want to take advantage of falling interest rates.

FHA refinance loans

All FHA loans are backed by the Federal Housing Administration and offer low down payments, flexible credit requirements and relaxed DTI ratios. Bank of America only offers FHA refinance loans to customers who already have a Bank of America home loan. There are no maximum income or earning limitations, and maximum loan amounts vary by county. FHA refinance loans are often used by those with less-than-perfect credit to get better loan terms and lower interest rates.

VA refinance loans

VA refinance loans are available exclusively to military personnel, veterans and eligible surviving spouses. These loans provide a flexible, low-cost way to refinance your current VA loan and take advantage of lower fixed interest rates or shorter loan terms. Similar to FHA loans, Bank of America only offers VA refinance loans to customers who already have a Bank of America home loan.

Cash-out refinance loans

Cash-out refinance loans are a common way for homeowners to access the equity in their home and use it for home improvement projects, debt consolidation or other financial needs. This type of loan pays off and replaces an existing mortgage loan with a new one that typically has a larger principal balance, different terms and a different interest rate. In exchange, the borrower receives a lump sum cash payment from the lender that represents a portion of the equity they had built up in the home — typically not exceeding 80% of the home equity. Bank of America's cash-out refinance loans are available as either fixed-rate or adjustable-rate loans and include closing costs that are similar to the original mortgage.

Bank of America mortgage refinance pricing

Bank of America states that closing fees — including loan origination fees, points and third-party fees — typically range between 3% and 5% of the loan amount. Both the closing fees and the sample interest rates provided on Bank of America's website are in line with industry averages. If you qualify for the Preferred Rewards program, discounts on both interest rates and closing costs may make refinancing with the bank a slightly more attractive option than with other lenders.

Bank of America mortgage refinance financial stability

Bank of America has received the following ratings from major credit rating agencies, reflecting its long-term financial stability:

  • A- with a stable outlook by S&P Global Ratings
  • AA- with a stable outlook by Fitch Ratings
  • A1 with a stable outlook by Moody's Investors Service

The company is also publicly traded with a market capitalization of $229.77 billion. Its revenue has increased from $96.98 billion in June 2022 to $149.14 billion in June 2023, and over the same period, saw net income of $28.24 billion, good for a 6.31% year-over-year increase. The bank also holds a very strong liquidity coverage ratio, which ensures it’s able to meet short-term obligations.

These credit ratings combined with its strong financial statements indicate that Bank of America has a healthy base of financial stability and is likely to retain its viability in the near future.

Bank of America mortgage refinance accessibility

Availability

Bank of America offers its mortgage refinance services both online and in-person with about 3,900 retail financial centers in 37 states. These loans are available in all 50 states and Washington, D.C.

Contact information

The company offers several ways for customers to get in contact, including in person, email, phone and live chat. The following are the phone contact details for Bank of America's mortgage customer support:

  • New mortgage applications: 1-800-270-5746 available Monday through Friday from 8 a.m. to 10 p.m. EST, and Saturday from 8 a.m. to 6:30 p.m. EST
  • Existing mortgages: 1-800-669-6607 available Monday through Friday from 8 a.m. to 9 p.m. EST

User experience

Bank of America's website is user-friendly and provides easy access to all the information you need to apply for a mortgage refinance loan. It offers a convenient online application process with quick pre-qualification, so you can see if you qualify without having to commit to the full process. The website also provides helpful resources such as mortgage calculators, home loan guides and a customer account portal that can be used to track the progress of applications and manage your monthly mortgage payments. Be sure to consult our mortgage refinance steps checklist if you're searching for more information about the process.

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Bank of America mortgage refinance customer satisfaction

Customer reviews specific to Bank of America's mortgage refinancing services are somewhat difficult to gauge as most consumer reviews pertain to the bank's overall services. With that said, the company is accredited by the Better Business Bureau (BBB) and maintains an A- rating with the organization. Furthermore, the company ranked above average on both J.D. Power's 2022 U.S. Mortgage Origination Satisfaction Study and 2022 U.S. Mortgage Servicer Satisfaction Study.

Bank of America mortgage refinance FAQs

Is Bank of America a good mortgage lender?

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Yes, Bank of America is a reputable mortgage lender that has been in service for over a century and has very strong financial wellbeing.

Does Bank of America do streamline refinance?

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Bank of America doesn't offer USDA streamline refinance but does have streamline refinance programs for its FHA and VA mortgage products.

Is Bank of America good for refinancing?

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Yes, Bank of America is a viable choice for refinancing your mortgage loan, offering several refinancing loan products and competitive rates.

How does refinancing a Bank of America mortgage work?

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Refinancing a Bank of America mortgage works much the same way as refinancing any other type of loan. The process involves gathering documents, submitting an application and working with a loan officer to determine what program or rate is right for you.

How we evaluated Bank of America mortgage refinance

In order to evaluate Bank of America's mortgage refinancing loans, we looked at numerous factors ranging from customer reviews and fees to loan terms and interest rates. The following are the most important criteria we considered:

  • Customer satisfaction: We surveyed online customer reviews and ratings from J.D. Power to determine how satisfied customers are with Bank of America's mortgage refinancing services.
  • Types of loans: We evaluated the range of refinance loan products Bank of America offers.
  • Fees and closing costs: We compared Bank of America's fees and closing costs to those of other lenders.
  • Interest rates: We examined Bank of America's current interest rates for its mortgage refinance products.
  • Accessibility: We considered whether there were any geographic limitations on Bank of America's mortgage services.
  • User experience: We assessed Bank of America's website to determine how easy it is for customers to learn about its mortgage refinancing options and apply.
  • Discounts: We researched discounts Bank of America offers for its mortgage refinance products.

Summary of Money's Bank of America mortgage refinance review

With a strong reputation and longstanding history in the mortgage industry, Bank of America has become a go-to lender for many borrowers considering mortgage refinancing and conventional loans. The company provides a strong selection of loan refinancing options with flexible terms and competitive rates that should suit most borrowers. Be mindful that the bank doesn't offer USDA refinancing and only offers FHA and VA loan refinancing to existing home loan customers. Bank of America is a particularly attractive choice for those that qualify for its Preferred Rewards program, which offers significant discounts on both loan fees and mortgage interest rates.

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