Can you deduct interest on a home equity loan if you use it to buy a second home?

One of the largest banks in the U.S. Bank of America is also one of the biggest mortgage lenders, with a reputation for stellar customer service and low rates. We love that, besides a well-developed digital presence, Bank of America has 3,700 locations nationwide, giving borrowers the choice of an online or in-person lending experience.
We also like that it offers various low-down-payment mortgage options and down payment assistance programs. Depending on where you live, you could qualify for up to $17,500 in down payment or closing cost grants.
Bank of America Home Mortgage Loans Learn More Annual Percentage Rate (APR) Apply online for personalized rates
Types of loans Conventional, FHA, VA, Affordable Loan Solution® mortgage, jumbo, medical professional, refinancing, HELOC
Terms Varies
Credit needed 620 for conventional, 580 for FHA, 680 for jumbo
Minimum down payment 3% with Affordable Loan Solution®
Terms apply.
Offers first-time homebuyer assistance? Yes — click here for details Pros Affordable Loan Solution® mortgage only requires 3% down
Up to $10,000 in down payment assistance for eligible borrowers
Up to $7,500 in closing cost grants in select markets
No annual fees or closing costs for HELOCs
Existing BoA customers eligible for discounted rates or fees Cons Lender fees not disclosed
No USDA loans, home equity loans or reverse mortgages Learn More View More
Pros and cons of a Bank of America mortgage
Pros Low average rates and fees
Several down payment assistance programs
3,700 branches nationwide
HELOCs available
Cons No USDA loans
No home equity loans
Does not disclose minimum credit score or income requirements
Bank of America types of mortgages
Bank of America offers conventional and government-backed loans in all 50 states. Fixed-rate: Borrowers keep the same rate for the life of their loan. Bank of America offers fixed-rate terms of 10, 15, 20 and 30 years.
Borrowers keep the same rate for the life of their loan. Bank of America offers fixed-rate terms of 10, 15, 20 and 30 years. Adjustable-rate: Bank of America offers adjustable-rate mortgages with a fixed rate for the first five, seven or ten years, fluctuating every six months thereafter.
Bank of America offers adjustable-rate mortgages with a fixed rate for the first five, seven or ten years, fluctuating every six months thereafter. FHA loans: Backed by the Federal Housing Administration (FHA), FHA loans only require 3.5% down for borrowers with a 580 FICO score or 10% for borrowers with a 500.
Backed by the Federal Housing Administration (FHA), FHA loans only require 3.5% down for borrowers with a 580 FICO score or 10% for borrowers with a 500. VA loans: Veterans and active-duty service members can apply for this lower-rate loan without a down payment or private mortgage insurance. Lenders typically require a 620 for a VA loan.
Veterans and active-duty service members can apply for this lower-rate loan without a down payment or private mortgage insurance. Lenders typically require a 620 for a VA loan. Jumbo loans: A jumbo loan exceeds the conforming limits set by the Federal Housing Finance Agency. BoA approves jumbo loans of up to $5 million.
A jumbo loan exceeds the conforming limits set by the Federal Housing Finance Agency. BoA approves jumbo loans of up to $5 million. Physician loans: Medical professionals can qualify for a low down payment mortgage, with student loan debt excluded from eligibility considerations. Residents and fellows can close 90 days before the start of their residency programs.
How do I qualify for a Bank of America mortgage?
Credit score : Undisclosed. Lenders typically require a 620 for conventional loans, although Bank of America does accept nontraditional forms of credit for conventional, FHA and VA loans.
: Undisclosed. Lenders typically require a 620 for conventional loans, although Bank of America does accept nontraditional forms of credit for conventional, FHA and VA loans. Down payment : 3% for Affordable Loan Solution mortgages, 5% for conventional loans, 10.01% for jumbo loans
: 3% for Affordable Loan Solution mortgages, 5% for conventional loans, 10.01% for jumbo loans Debt-to-income ratio: Undisclosed. Typically, lenders prefer borrowers to have a DTI ratio under 50%, and preferably 43% or less.
Benefits and discounts
Bank of America offers a variety of assistance for both first-time and repeat homebuyers. It does not generally release income requirements, however. Preferred Rewards Program Bank of America customers who meet balance requirements can get up to $600 off their origination fee or qualify for a rate reduction on a home loan or home equity line of credit. Down Payment Grant Borrowers in select areas can get up to 3% of their overall home cost as a grant, up to $10,000. The minimum loan-to-value must be at least 80% and income requirements apply, although BoA does not disclose them publicly. America’s Home Grant Qualified borrowers can get up to $7,500 in grants toward non-recurring closing costs or to buy down their mortgage rate, although a down payment of at least 20% is required. Eligible markets are listed on the Bank of America website. The Affordable Loan Solution First-time homebuyers who don’t exceed 100% of the area median income in certain minority-majority markets can be approved for a home loan with as little as 3% down with the Affordable Loan Solution. There is no minimum credit score requirement and the loan can be combined with down payment assistance.
Refinancing
Bank of America offers cash-out and rate-and-term refinancing as well as HELOCs. Credit score : Undisclosed. Lenders typically prefer a FICO score of at least 620.
: Undisclosed. Lenders typically prefer a FICO score of at least 620. Debt-to-income ratio : Undisclosed. Lenders typically require a DTI ratio under 50% and prefer 43% or lower.
: Undisclosed. Lenders typically require a DTI ratio under 50% and prefer 43% or lower. Home equity: 5% for conventional refinancing, 10.01% for jumbo
Customer service
Bank of America has one of the largest networks of branches nationwide, making it easy to work with a loan officer in your area. It also benefits from a well-tailored website that lists sample mortgage rates and offers both a closing cost calculator and an affordability calculator. The customer service line for mortgage clients has comparatively expansive hours: You can call 800-669-6607, Monday through Friday, from 8 a.m. to 10 p.m. ET and Saturday from 8 a.m. to 6:30 p.m. ET. BoA ranks highly for customer satisfaction on both J.D. Power’s 2024 mortgage origination and mortgage servicer surveys. It received an A from the Better Business Bureau, which did cite government actions against the business. In November 2023, Bank of America was required to pay $12 million in fines for falsifying lending information required under the Home Mortgage Disclosure Act. According to the Consumer Financial Protection Bureau, loan officers failed to ask applicants specific demographic questions and then reported that applicants had declined to respond.
How does Bank of America compare to other mortgage lenders?
Here’s how Bank of America stacks up to two leading mortgage providers.
Bank of America Chase Bank PNC Bank Loan types Conventional, jumbo, VA, FHA, physician loans Conventional, jumbo, VA, FHA, DreaMaker, Standard Agency loan Conventional, VA, FHA, USDA, jumbo, physician loan, HomeReady, Home Possible, construction, renovation, PNC Community Loan Credit score Undisclosed Conventional: 620 Jumbo: 680 620 Terms Fixed-rate: 10, 15, 20 and 30 years; ARM: 5/6, 7/6, 10/6 Fixed-rate: 15-year, 30-year Adjustable rate: ⅚, 7/6, 10/6 Fixed rate: 10, 15-, 20-, and 30-year; ARM: 7/6 and 10/6 Perk Some existing customers can get a $600 discount on origination fee or a rate discount on mortgage 21 days to close with guarantee of $5,000 Community loan allows certain homebuyers to put 3% down with no PMI Best for Down payment assistance In-person service Uncommon loan types
Bank of America vs. Chase Bank These two banking juggernauts are both highly rated for customer service, with thousands of branches nationwide, rate discounts for existing customers and above-average rankings on J.D. Power’s mortgage origination surveys.
Chase Bank Learn More Annual Percentage Rate (APR) Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans Conventional loans, FHA loans, VA loans, jumbo loans and proprietary low-down-payment DreaMaker℠ and Standard Agency mortgages.
Terms 10 – 30 years
Credit needed 620
Minimum down payment 3% for DreaMaker℠ or Standard Agency loan
Terms apply. Read our Chase mortgage review Pros Chase DreaMaker℠ loan only requires 3% down payment
Existing customers eligible for rate reduction
Above-average customer satisfaction scores
Closing timeline guarantee
Homebuyer grants of up to $7,500 Cons No USDA loans or HELOCs
No closing guarantee for refinancing
Chase homebuyer grant only available in select areas. Learn More View More
Chase’s clear credit score and DTI ratio requirements simplify the borrowing process, however, while Bank of America doesn’t make its limits readily available. BoA does accept alternative forms of credit and, overall, has lower average rates and fees. Read more: Chase Bank mortgage review If time is of the essence, BoA states that its mortgages take 30 to 60 days to close, while Chase guarantees closure within 21 days or eligible borrowers can receive up to $5,000. Bank of America vs. PNC Bank In another big bank matchup, Bank of America and PNC both have branches nationwide and well-developed digital platforms with sample rates.
PNC Bank Learn More Annual Percentage Rate (APR) Apply online for personalized rates
Types of loans Conventional, FHA, VA, USDA, physician loan, HomeReady and Home Possible, refinancing, HELOC
Terms Fixed: 10 – 30 years, ARM: 7/6 and 10/6
Credit needed 620 for conventional, 640 for USDA, 620 for FHA, 680 for jumbo,
Minimum down payment 3% for conventional, 3.5% for FHA, 0% for USDA or VA, 15% for jumbo loan
Terms apply. Read our PNC Bank mortgage review Pros Lower-than-average mortgage rates
Offers USDA loans
PNC Community Loan requires only 3% down and no PMI
$7,500 grant for down payment or closing cost Cons No home renovation or home equity loans
High credit score requirement for FHA mortgage
Ranked below average for customer satisfaction by J.D. Power Learn More View More
Bank of America was one of the top-rated lenders on both J.D. Power’s 2024 mortgage origination and mortgage servicing surveys, while PNC ranked several places lower for mortgage origination and below average for mortgage servicing — which involves post-closing duties like sending statements, collecting payments and managing escrow accounts. Read: PNC Bank mortgage review When it comes to loan variety, PNC offers USDA, HomeReady, renovation loans and others that Bank of America does not. Both banks have robust down payment assistance programs, but PNC’s largest is $10,000 for borrowers with a qualifying income in select areas, while BoA offers up to $17,500 in combined assistance for those who qualify.
How do I apply for a mortgage with Bank of America?
You can apply for a mortgage on the Bank of America website or with a loan officer at one of its 3,700 branches nationwide. You can also begin the process on the phone by calling 866-466-0979. To prequalify, you’ll need proof of ID, income and employment, as well as bank statements and details on your assets and debts. You’ll also need to provide your Social Security number and allow the bank to run a credit check. When you find the home you want, you’ll let Bank of America know that you plan to proceed. The bank will start the underwriting process, which will include an appraisal on the home and a title search.
Is Bank of America right for me?
Bank of America’s low rates, well-established reputation and widespread availability make it an attractive lender, especially for borrowers looking for help with a down payment or other assistance. Existing customers will also like being eligible for rate reductions or money off their origination fees. But while it has a variety of loan options, Bank of America doesn’t offer USDA loans, reverse mortgages or home equity loans.
In addition, its lack of transparency about credit scores and other requirements may frustrate some potential borrowers.
Bank of America mortgage FAQ How long does it take to close on a Bank of America mortgage? It can take 30 to 60 days to close on a Bank of America mortgage, with an average of 45 days — which is in line with the industry average. Your specific closing timeline will depend on several factors, though, including the type of loan, your credit history, when the appraisal and inspection can be scheduled and if the title search turns up any irregularities. Does Bank of America offer reverse mortgages? No, Bank of America stopped offering reverse mortgages in 2011, in the wake of the Great Recession. At the time, it said it was exiting