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Closing the loan
Closing costs include all the expenses incurred by you in obtaining your equity loan. In this section, you can learn what these charges are and any options you may have regarding payment for them.

Fees Collected at Application
Closing Costs (Costs vs. "No Out of Pocket Costs")

Fees collected at application
Bank of America, like most lenders, will need to collect two or three fees (defined below and state dependent) from you at the time of application. Fees are for services supplied by third parties. Many lenders normally require these fees.
Application Fee
Dependent upon your state, this fee covers the cost of processing your application.
Appraisal Fee
This is a payment for an opinion on the value of your property. A report is prepared by a professional appraiser to explain the determination of the fair market value.
Many lenders use the tax-assessed value of a home to determine your home's value. Since this typically results in a lower value, Bank of America uses an appraisal so you can make full use of all your equity.
Credit Report Fee
Covers the cost of the credit report used to help determine your creditworthiness. These reports are obtained from credit agencies and evaluate your capacity to pay debts or history of paying debts.

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Closing costs
(costs vs. "no out of pocket costs")
Home equity lines of credit have some of the same closing costs as your original home loan.
You have 3 choices on how to handle these costs:
  Bring a check to closing (just like you probably did when you purchased your home)
  Deduct the closing costs from the cash proceeds of your loan or line of credit
  Cover lender and third-party closing costs through acceptance of a slightly higher rate for your loan or line of credit

Which option is best for you? That depends on your goals for utilizing your equity and the amount of cash you have available for closing costs.

To determine what method of paying closing costs is best for your goals, see Closing cost payment options.

Other typical line of credit costs
In addition to the upfront costs of a home equity line of credit, you may have annual fees and/or early termination fees for the first 5 or 10 years of the loan. You may also have minimum draw requirements that require you to use a certain amount of the credit line immediately and keep that amount outstanding for a set period. At Bank of America, we have special programs for customers with excellent credit* that do not include annual fees and give you rates as low as the prime rate. Additionally, we do not require that you open a checking or savings account (and incur the associated fees for the life of the loan). Many banks require you open such an account in conjunction with approval for (or to get a good rate on) an equity loan.

See HELOC Terms Summary for important terms on our most popular home equity lines.

*The Excellent Credit program requirements are tougher. Examples of disqualifying factors may include:
Late payments
Balances on accounts too high
(e.g., credit cards are all at the limit)
Credit history too short (<2yrs)
Too many accounts with balances

If you apply, we will order your credit report (and any co-applicants) to confirm excellent credit history and timely account payment, particularly for the past 12 months.

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