Fast pre-approval and no lender fees

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Ally Bank has grown in popularity as online banks without physical outposts have become more prominent over the years, primarily for their ability to pass on savings from no overhead costs to their customers.

While Ally Bank’s online high-yield savings account is one of its most popular online products, the lender also offers several mortgage options for those in the market to buy a home. Aside from signing the closing documents, which must be done in person at the direction of the lender, the rest of the home buying process is done online.

Select took a look at Ally Bank’s mortgage options, taking a closer look at factors like minimum down payments, terms and other benefits. Learn more about our methodology below.

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Ally Bank Mortgage Review

Allied bank

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed and adjustable rate mortgages included

  • Types of loans

    Conventional Loans, HomeReady Loan and Jumbo Loans

  • Terms

  • Credit needed

  • Minimum deposit

    3% if you continue with a HomeReady loan

Advantages

  • The Ally HomeReady loan allows a down payment of just under 3%
  • Pre-approval in just three minutes
  • Submission of the application in less than 15 minutes
  • Online support available
  • Existing Ally customers are eligible for a discount that applies to closing costs
  • Does not charge lender fees

The inconvenients

  • Does not offer FHA, USDA, VA or HELOCs loans
  • Mortgages are not available in Hawaii, Nevada, New Hampshire or New York

APR

The best way to determine the annual percentage rate, or APR, Ally Bank will likely offer to pre-qualify and submit your home loan application.

Although mortgage interest rates can fluctuate quite often, the rate you receive will depend heavily on your location, credit score, and credit history. Check each lender’s website to get a better idea of ​​the types of interest rates they charge, but keep in mind that they vary depending on your location and creditworthiness. In any case, it is important to provide the information necessary to verify your personalized rate.

Loan offers

While Ally Bank offers conventional loans and jumbo loans, other options such as VA loans, USDA loans and FHA loans are not available from this lender.

Ally Bank also offers the Fannie Mae HomeReady mortgage program, which would allow low-to-middle-income homebuyers to pay as little as 3% for a down payment, whether or not it’s their first time going through the process. . Applicants must also have a debt-to-equity ratio of no more than 50%, while their income must be at or below 80% of the region’s median income and at least one borrower must complete a homeowner’s education course.

Minimum deposit

Conventional loans usually have a minimum down payment of at least 5%. When it comes to jumbo loans, Ally Bank requires a down payment of at least 10%, which is pretty typical of most mortgage lenders. Remember that you will need to budget 2-5% of your loan amount to pay for the closing costs of a jumbo loan.

With the HomeReady mortgage program, homebuyers can put down as little as 3%.

Terms of office

Ally Bank offers 15, 20 and 30 year loans. You will also have the choice between fixed rate and adjustable rate mortgage terms.

Customer service

Home team experts are available through Ally Bank for homebuyers with questions or concerns. Applicants have the option of calling, emailing or texting the expert they are working with for personalized advice on how to complete your application and manage your documents online.

Advantages

It’s common for lenders to charge fees for different parts of the mortgage application process – these lender fees typically include application fees, origination fees, processing fees and underwriting fees – which can end by costing a significant amount of money.

Whereas Ally Bank does not charge any of these types of lender fees, be aware that you may still be charged an appraisal fee and registration fee, as well as additional fees for a title search and insurance.

Ally Bank also offers a fast pre-approval turnaround – according to the lender’s website, you can get pre-approved in as little as three minutes online. It will also get you a pre-approval letter from Ally Bank to give you an edge over homebuyers who haven’t yet been pre-approved while you’re house hunting.

At the end of the line

Ally Bank makes the mortgage application process a little less of a waiting game by offering pre-approval in as little as three minutes and having a mortgage process that’s done almost exclusively online – you won’t have to. to meet you in person to sign the closing documents.

Ally also lowers some of the common lender fees, which can help buyers save money. Since this lender only offers conventional loans, jumbo loans, and the HomeReady mortgage program, those interested in other loan options, such as a VA loan or FHA loan, might consider working with lenders. such as Chase Bank or PNC Bank instead.

Our methodology

To determine which mortgage lenders are the best, Select analyzed dozens of US mortgages offered by online and brick-and-mortar banks, including major credit unions, that come with fixed-rate APRs and flexible loan amounts and terms to meet a range of mortgage needs. funding.

When selecting and ranking the best mortgages, we focused on the following characteristics:

  • Fixed APR: Variable rates can go up and down over the life of your loan. With a fixed-rate APR, you fix an interest rate for the life of the loan, which means your monthly payment won’t vary, making it easier to plan your budget.
  • Types of loans offered: The most common types of mortgages are conventional loans, FHA loans, and VA loans. In addition to these loans, lenders may also offer USDA loans and jumbo loans. Having more options available means the lender is able to meet a wider range of applicant needs. We have also considered loans tailored to the needs of borrowers who plan to buy their second home or rental property.
  • Closing timeline: The lenders on our list are able to offer closing times that range from as little as two weeks after signing the home purchase agreement to up to 45 days after signing the agreement. Specific closing times have been noted for each lender.
  • Costs: Ongoing fees associated with mortgage applications include origination fees, application fees, underwriting fees, processing fees and administrative fees. We evaluate these fees in addition to other features when determining each lender’s overall offer. Although some lenders on this list do not charge this fee, we have noted all instances where a lender does.
  • Flexible minimum and maximum loan amounts/terms: Each mortgage lender offers a variety of financing options that you can customize to suit your monthly budget and how long you need to pay off your loan.
  • No prepayment penalties: The mortgage lenders on our list do not charge borrowers for loan prepayment.
  • Simplified application process: We looked at whether lenders offered a convenient and fast online application process and/or an in-person procedure at local branches.
  • Customer service: Every mortgage lender on our list offers customer service by phone, email or secure online messaging. We have also opted for lenders that have a resource center or online advice center to help you learn about the personal loan process and your finances.
  • Minimum deposit: Although minimum down payment amounts depend on the type of loan requested by the borrower, we have noted lenders who offer additional specialty loans with a lower minimum down payment.

After reviewing the features above, we’ve sorted our recommendations based on overall funding needs, fast closing times, lower interest rates, and flexible terms.

Note that advertised rates and fee structures for mortgages are subject to fluctuation in accordance with the Federal Reserve rate. However, once you have accepted your mortgage contract, a fixed rate APR will ensure that your interest rate and monthly payment will remain constant for the life of the loan, unless you choose to refinance your mortgage. at a later date for a potentially lower APR. Your APR, monthly payment, and loan amount depend on your credit history, creditworthiness, debt-to-equity ratio, and desired loan term. To take out a mortgage, lenders will do a credit check and ask for a full application, which may require proof of income, identity verification, proof of address and more.

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Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.