Is mortgage refinancing right for me?
Common goals of refinancing your home loan are to help make your monthly mortgage payments more affordable by refinancing to a lower interest rate or switching from an adjustable-rate into a fixed-rate1 loan.
You may be eligible for traditional refinancing if:
- You're current on your home loan payments
- You have at least 5% equity for most loans, or at least 2.25% if you have a Bank of America FHA mortgage.2 (Please note that the amount can vary depending upon your circumstances.) Keep in mind that you will likely have to pay mortgage insurance each month if you refinance a sum greater than 80% of your home’s appraised value.
You'll also need to meet other criteria such as credit, loan-to-value and debt-to-income ratio requirements. Please ask for details.
If you think you're not eligible for a traditional refinance but have been current on your home loan payments for at least the past six months, you may still qualify for mortgage refinancing through the Home Affordable Refinance Program.
1If you are refinancing to lower your monthly payment or change from a variable rate to a fixed-rate loan, you should carefully consider the potential increase in the total number of monthly payments and/or the total interest charges paid over the full term of the new refinance loan – especially for borrowers who currently have loans with terms less than 30 years.
2Monthly Mortgage Insurance Premiums (MIP) and Upfront Mortgage Insurance Premiums (UFMIP) apply. Maximum loan amounts vary by county. Bank of America offers FHA refinance loans to existing Bank of America home loan customers only.
Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice.
Now that I'm in the process, what's next?
Call to request a traditional refinance.
Before you call, to save time, gather some financial information that we'll be asking you for. Please have handy the following for everyone listed on your home loan:
- Pay stubs or, if self-employed, quarterly or year-to-date profit/loss statement
- Bank statements for all checking and savings accounts
- Tax return
During the call, we'll discuss your situation, pull a credit report for all applicants and tell you about key deadlines.
I’ve submitted my financial information and received my welcome package.
After the call, we'll send you a welcome package containing:
- A copy of your completed loan application
- A Loan Estimate that spells out the settlement costs associated with the loan
Important: Once you receive your welcome package, review your completed loan application to make sure that everything is correct. You should also compare the proposed loan terms to your current loan. If the proposed payments aren't an improvement over what you pay now, and you're not refinancing to lock in a fixed rate, refinancing may not be right for you.
If you qualify, we'll call you to let you know that you‘ve received conditional approval. We may ask you to send us additional information if it's needed. To avoid any delays, please provide any additional information we request as soon as possible.
We'll also order a home appraisal to determine your home’s market value.
If you’re experiencing a financial hardship, you may qualify for more affordable payments with a loan modification.
I’m awaiting final approval.
We'll begin reviewing and verifying your information. We'll need to:
- Review the property appraisal along with your credit history and overall financial situation to make a decision whether to approve your loan request.
The review process may take approximately 75 days from your initial call. We'll contact you regularly during this time to update you on your status. You can also check the status of your application online at any time.
Important: Be sure to continue making your normal mortgage payments until you sign the loan documents and your refinance takes effect.
My refinance has been approved.
If your loan is approved, you’ll receive a phone call from us to schedule the closing. This will be a similar process to the one you went through when you purchased your home.
At the closing, you and any co-borrowers will need to:
- Sign a full set of loan documents
- Pay for closing costs, unless some or all of the costs are financed into the loan amount