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Financing a home renovation


Making a house your home can be exciting but may also mean taking on potentially costly renovations. The good news is that there are a range of funding options that can help finance a home renovation, from savings to flexible borrowing solutions.  While using cash on hand, or even selling investments or other assets, may be a good way to meet the cost of some important expenses, those may not always be the best solution for your situation. Consider borrowing against your assets to fund major expenses such as a business acquisition or a down payment on a commercial real estate property. Prudent use of credit can help enhance and further strengthen your balance sheet.


Loan options to consider

Borrowing to cover renovation expenses can help you preserve cash and avoid disrupting your financial strategies. There are multiple ways to borrow, two potential choices we'd like to bring to your attention include Home Equity Lines of Credit (HELOC) and Loan Management Accounts® (LMA® account) a demand line of credit from Bank of America, N.A. Both offer purchasing flexibility, up to your available credit limit, and generally favorable interest rates. Your Merrill Advisor can discuss the range of funding options that may be available to you, including these two types of loans, to determine which one may be a good fit for your cash flow needs, time horizon, risk tolerance and other important factors. 

Bank of America® Home Equity Line of Credit (HELOC)

Bank of America® Loan Management Account®
(LMA® account)

  • Allows you to borrow against the available equity in your home, using the home as collateral.
  • Provides a revolving credit line with on-demand access to cash (up to your available credit limit).
  • Special rate discounts available.2, 3
  • No fee to apply, no closing costs (on lines of credit up to $1,000,000) and no annual fee.
  • Access funds online, by phone, at Bank of America financial centers or with no-access-fee checks.
  • There is no prepayment penalty for paying down the loan faster than the payback period.
  • Allows you to borrow against accounts of eligible investments, using the assets as collateral.1
  • Access credit through variable or fixed-rate advances and standby letters of credit.
  • Flexible terms and repayment options, subject to required collateral maintenance requirements.
  • No application or annual fees.
  • Access funds through no-access-fee checks, free Fedwire or checking account transfers.
  • Funds can generally be accessed within one day of approval.

Learn more

Your Merrill Advisor can help evaluate your home renovation financing options and choose the best fit. Note that securities-based financing involves special risks and is not for everyone.


Risks of Borrowing


Securities-based financing involves special risks. You should review the LMA Loan Agreement and related documents and disclosures carefully and consult with your own independent tax and legal advisors before borrowing.


  • A decline in the value of your collateral assets may require you to provide additional funds or securities to avoid a collateral maintenance call. You can lose more funds than are held in the collateral account. The LMA account is a full-recourse loan and you will be liable for any deficiency.
  • The Bank can force the sale or other liquidation of any securities or other investment property in the collateral account and, unless otherwise required by law, can do so without first contacting you.
  • You are not entitled to choose which securities in the collateral account are liquidated or sold.
  • The Bank can change its collateral maintenance requirement at any time without notice to you.
  • You are not entitled to an extension of time to satisfy the Bank’s collateral maintenance requirement.
  • There may be adverse tax or other consequences to you if securities are sold or otherwise liquidated by the Bank.
  • The LMA account is an uncommitted facility, although loans to individuals and trusts may be committed in an amount not to exceed $100,000. The Bank may demand full or partial repayment at any time and any commitment may be immediately terminated.
  • For fixed-rate advances and term loans, principal payments made in advance of the end of the applicable fixed-rate period, whether voluntarily or involuntarily, (due to demand or liquidation by the Bank,) may be subject to a substantial breakage fee as determined by the Bank.
  • Some restrictions on the use of LMA account proceeds may apply under the terms of the loan documents and applicable laws and regulations.



  • Interest rate risk – As a variable-rate loan, interest rates and payments can change. Clients should carefully consider these risks before borrowing.
  • Potential repayment volatility – For clients who opt for an initial interest-only period, at the end of this period, they will still owe the original amount borrowed, and the monthly payment will increase significantly and may result in “payment shock” – even if interest rates stay the same. If clients want to make interest-only payments, the advisor should discuss what the payments will be after the end of the interest-only period.

1 The Loan Management Account (LMA account) is a demand line of credit provided by Bank of America, N.A., Member FDIC. Equal Opportunity Lender. The LMA account requires a brokerage account at Merrill Lynch, Pierce, Fenner & Smith Incorporated and sufficient eligible collateral to support a minimum credit facility size of $100,000. All securities are subject to credit approval and Bank of America, N.A. may change its collateral maintenance requirements at any time. Securities-based financing involves special risks and is not for everyone. When considering a securities-based loan, consideration should be given to individual requirements, portfolio composition and risk tolerance, as well as capital gains, portfolio performance expectations and investment time horizon. The securities or other assets in any collateral account may be sold to meet a collateral call without notice to the client, the client is not entitled to an extension of time on the collateral call and the client is not entitled to choose which securities or other assets will be sold. The client can lose more funds than deposited in such collateral account. The LMA account is uncommitted and Bank of America, N.A. may demand full repayment at any time. A complete description of the loan terms can be found within the LMA account agreement. Clients should consult their own independent tax and legal advisors. Some restrictions may apply to purpose loans and not all managed accounts are eligible as collateral. All applications for LMA accounts are subject to approval by Bank of America, N.A.

2 Lower your interest rate when you set up automatic payments at account opening from your Bank of America checking or savings account; by drawing and maintaining an initial qualifying balance for at least the first three billing cycles; and when you're enrolled in Bank of America's Preferred Rewards3 program at the time of application submission.

3 Home Equity Line of Credit (HELOC) interest rate discounts are offered to clients who are enrolled or are eligible to enroll in Preferred Rewards, based on their rewards tier at the submittal of home equity application (for co-borrowers, at least one applicant must be enrolled or eligible to enroll). Amount of discount (0.125% for Gold tier, 0.250% for Platinum tier, 0.375% for Platinum Honors tier, and 0.625% for Diamond tier and 0.750% for Diamond Honors tier) is based on the rewards tier at the submittal of home equity application and is not subject to adjustment after the application is submitted. For further details, refer to the Preferred Rewards section of the Personal Schedule of Fees. Benefit is non-transferable. Preferred Rewards home equity benefit can be combined with certain other home equity interest rate discounts.


For fixed-rate and term advances, principal payments made prior to the due date will be subject to a breakage fee.


Before taking out any mortgage or line of credit, borrowers should consult their tax advisor to understand the implications of each of their options.


Banking, mortgage and home equity products offered by Bank of America, N.A., and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation. Home Icon for Equal Housing LenderEqual Housing Lender. 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.



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