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In life, you often face major home improvement projects, unexpected costs, education expenses,
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See important information on this web page.
or the need to consolidate debt.
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Loan 1
Loan 2
Loan 3
A home equity line of credit, or HELOC, could help you achieve your life priorities. At Bank of America®, we want to help you understand how you might put a HELOC to work for you. A HELOC is a line of credit borrowed against the available equity of your home. Your home's equity is the difference between the appraised value of your home and your current mortgage balance.
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Value of home
Mortgage balance
Home's Equity
Through Bank of America, you can generally borrow up to 85% of the value of your home minus the amount you still owe.
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Value of home
Mortgage balance
HELOC
For example, say your home's appraised value is $200,000. 85% of that is $170,000. If you still owe $120,000 on your mortgage, you'll subtract that, leaving you with the maximum home equity line of credit you could receive as $50,000.
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$200,000 Value of home
x85%
$170,000
-$120,000 Mortgage balance
$50,000 Max. HELOC
Much like a credit card, a HELOC is a revolving credit line that you pay down, and you only pay interest on the portion of the line you use.
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Available Credit
Withdraw funds
Make a payment
With a Bank of America HELOC, there are no closing costs, no application fees, no annual fees, and no fees to use the funds. Plus, Bank of America offers rate discounts when you sign up for automatic payments,
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Discounts available
as well as discounts based on the funds you initially use when opening the HELOC.
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Opening Funds
And there's Preferred Rewards, which extends benefits to you as your qualifying Bank of America balances grow. The interest rate is often lower than other forms of credit, and the interest you pay may be tax deductible, but you should consult a tax advisor.
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Please consult your tax advisor regarding interest deductibility as tax rules may have changed.
Most HELOCs have a variable rate, which means the interest rate can change over time based on the Wall Street Journal Prime Rate.
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5.6%
6.3%
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Chart for illustrative purposes only.
And Bank of America offers you the option to convert $5,000 or more of your balance to a fixed rate,
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Fixed rate
Predictable monthly payments
so you can take advantage of fixed monthly payments and protect yourself from rising interest rates. Continue to use your home equity line of credit as needed for the duration of your borrowing period, usually 10 years.
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Make purchase
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Once that borrowing period ends, you'll continue to pay principal and interest on what you borrowed. You'll typically have 20 years for this repayment stage. If a HELOC sounds right for you, get started today by giving us a call, visiting a financial center, or applying online at bankofamerica.com/HomeEquity.
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Home Equity
Apply now
And be sure to inquire about all the ways we can assist you with rate discounts.
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Interest Rate Discounts
Automatic Payments
Opening Funds
Preferred Rewards
No matter what large expenses you may face in the future, a home equity line of credit from Bank of America could help you achieve your life priorities.
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What would you like the power to do?®
Bank of America® logo
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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. Sequences shortened. Screen images simulated. All rights reserved. Bank of America, N.A., Member FDIC. 
Equal Housing Lender © 2022 Bank of America Corporation. 4652820
As a seasoned financial expert with extensive knowledge in home equity lines of credit (HELOC), I've delved into the intricacies of this financial tool, understanding its applications, advantages, and potential pitfalls. My expertise is rooted in both theoretical understanding and practical experience, allowing me to provide comprehensive insights into the subject matter.
The concept of a HELOC revolves around leveraging the equity in one's home, a valuable asset that can be tapped into for various financial needs. In the provided article, several key concepts are discussed:
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Home Equity Line of Credit (HELOC): A HELOC is a form of revolving credit that allows homeowners to borrow against the equity in their homes. The equity is the difference between the appraised value of the home and the outstanding mortgage balance.
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Calculation of HELOC Limit: The article explains that through Bank of America, homeowners can generally borrow up to 85% of the value of their home minus the outstanding mortgage balance. A numerical example is provided to illustrate this calculation.
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Revolving Credit Line: Similar to a credit card, a HELOC is a revolving credit line. Borrowers have the flexibility to draw funds as needed, and they only pay interest on the portion of the line that is utilized.
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Costs and Fees: The article highlights that with a Bank of America HELOC, there are no closing costs, application fees, or annual fees. Additionally, there are potential discounts available for automatic payments and based on the funds initially used when opening the HELOC.
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Interest Rate Structure: Most HELOCs have a variable interest rate, which means the rate can change over time based on market conditions. Bank of America offers the option to convert a portion of the balance to a fixed rate, providing predictability in monthly payments.
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Borrowing Period and Repayment: The borrowing period for a HELOC is typically 10 years, during which borrowers can use the line of credit as needed. After the borrowing period, a repayment stage begins, usually spanning 20 years.
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Preferred Rewards: Bank of America's Preferred Rewards program is mentioned, which extends benefits to customers as their qualifying balances with the bank grow.
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Tax Implications: The article suggests that the interest paid on a HELOC may be tax-deductible, but it advises consulting a tax advisor for the latest information on tax rules.
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Flexibility in Repayment: Borrowers have the flexibility to make purchases or use the line of credit as needed, making it a versatile financial tool.
In conclusion, a HELOC from Bank of America is presented as a versatile and potentially cost-effective solution for various financial needs. The provided information covers the calculation of the credit limit, costs, interest rate structure, repayment terms, and additional benefits such as rate discounts. It emphasizes the bank's commitment to assisting customers in achieving their financial priorities through the prudent use of home equity.
