Ally mortgage review 2024 #CashNews.co

The Yahoo view: Ally Bank offers a high level of mortgage rate transparency and a wealth of online resources, but first-time buyers could struggle to find a loan that meets their needs.

Ally Bank sets itself apart as a mortgage lender with the clarity of its offerings: conventional and jumbo loans with fixed- and adjustable-rate options, plus one of the most comprehensive sets of resources for first-time buyers we’ve seen in the marketplace. Despite its remarkable mortgage rate transparency, two key areas could stand improving: its lack of government-backed mortgage options and loans that don’t require a gasp-inspiring 20% down payment.

Read more: The best mortgage lenders right now

Key benefits

• Skip the fees with Ally — no application, origination, process, or underwriting fees.

• Close fast. Ally boasts the ability to close loans up to 10 days faster than the industry average.

• Take the guesswork out of your mortgage with Ally’s clear disclosure of sample loan values, required down payment, and discount points.

Need to know

• Existing Ally customers could get a $500 discount on closing costs.

• Qualified buyers seeking a conventional (conforming or jumbo) mortgage could enjoy Ally’s One Day Mortgage™ — a process that takes you from application to a commitment to lend almost overnight.

• Qualified borrowers in Detroit; Philadelphia; and Charlotte, N.C., could be eligible for Ally’s Home Grant of up to $5,000 toward a down payment or closing costs.

Ally Bank home loan product offerings

Ally offers the following types of home loans:

• Conventional fixed-rate loans

• Conventional adjustable-rate loans

• Jumbo fixed-rate loans

• Jumbo adjustable-rate loans

• Rate-and-term refinancing

• Cash-out refinancing

• Second home

• Investment home loans

Ally does not offer the following types of home loans:

Dig deeper: How do investment property loans work?

Ally mortgages for first-time home buyers

Here’s the good news: Ally Bank has some attractive resources for first-time home buyers. The bad news? Even though they offer a 3% down loan designed for lower-income borrowers, you’ll need to pack a lunch because finding it will definitely take some effort.

First, let’s talk about the good. Ally stands out with its downright handsome (yes, we said it) landing page dedicated to first-time buyers. Honestly, it’s an absolute dream and comes complete with everything a new buyer could want: simple language that makes the path to homeownership feel like a possibility, plus a crisp set of navigational tools we wish every lender would emulate. Here, you’ll find:

• A checklist that spells out common one-time and ongoing costs related to buying a home (love it)

• A click-friendly guide that takes you from preapproval to closing

• A set of articles designed to get first-time buyers the answers they need to feel confident about the process

Now, for the not-so-good: Loan options for first-time and lower-income borrowers without a 20% down payment are limited to Ally’s HomeReady loan backed by Fannie Mae — and finding it took our team some real digging.

What’s missing: Glaringly absent are some of the most popular, low-down-payment mortgage options for new buyers, such as FHA loans and VA loans. Does this annoy us? Yes, especially since inflation and home prices have made it harder for many to make the switch from renting to owning. Ally does, however, have some options for first-time and lower-income borrowers that we want to point out, along with a roadmap for how to find them.

What Ally offers: Ally has two options to help buyers who need a boost to get to the closing table — Fannie Mae’s HomeReady loan and its Ally Home Grant.

Ally’s HomeReady mortgage offers down payments as low as 3%, a blessing for those without a ton of cash in the bank. But here’s the downside to HomeReady loans: You’ll need a minimum 620 credit score, and income limits apply. To qualify for HomeReady, your household income can’t exceed 80% of the median area income in the area where you want to buy. To see if you meet income limits, you can use Fannie Mae’s Area Median Income lookup tool. If you’re a first-time buyer, you must also complete a homeownership education requirement.

Finding Ally’s HomeReady option is a whole production. First, you’ll have to visit its Home Grant page. Then, you’ll need to scroll down to mid-page to find a single reference to the HomeReady loan. It’s super weird that this loan can’t be found on its Home Purchase loans page, but we digress. Once you click on that single, tiny, random reference to HomeReady, you’ll get a pop-up window with some brief details and a phone number to call. That’s it? Sadly, that’s it.

First-time buyers could also benefit from Ally’s Home Grant worth up to $5,000 — applicable to closing costs or a down payment credit. But yes, there’s a catch: It’s only available to buyers in Charlotte, Detroit, and Philadelphia who meet income and home location criteria.

The bottom line? Ally doesn’t offer the most popular government-backed mortgages for first-time buyers. Those who meet income limits, however, could qualify for their one low-down-payment option through Fannie Mae. All in all, the best lenders for first-time buyers come to the table with more options than Ally.

Dig deeper: First-time buyer programs: Everything you need to know

Ally for home equity lending

Unfortunately, Ally Bank doesn’t offer home equity lines of credit (HELOCs) or home equity loans. Ally’s credit options are limited to credit cards.

Learn more: How do home equity lines of credit (HELOCs) work?

Ally mortgage loan rates 2024

Here’s the upshot: Ally’s mortgage rate transparency is astounding — and we don’t offer that praise lightly. In an industry where it’s not uncommon to find lender websites with no sample rates, Ally steps onto the scene with tons of rate information that’s easy to understand.

To find sample mortgage rates at Ally, head to “Mortgage” in the main navigation. Then, click “Mortgage Rates” under the “Tools” heading. Bam! You’re on Ally’s rates page for conventional mortgages. To find jumbo mortgage rates, you’ll click on the same “Mortgage” heading in the main navigation, but click “Jumbo Loans & Rates” under the “Explore” heading instead.

On the day we reviewed the website, Ally displayed sample rates for a $350,000 loan for a single-family, primary residence in Florida with a 20% down payment and excellent credit. But customizing rates for your area and personal finances was simple — just click “Customize your rate” and enter your zip code, credit score, home price, down payment amount, housing type, and whether it’s for your primary residence.

Ally displays rate information for both purchase and refinance loans and fixed and adjustable rate options. You can also see discount points, credits, and an estimated monthly payment. It shows you different discount point options for each term. Although Ally doesn’t show what your APR would be with zero discount points, on the day we checked, it showed a customized rate with as little as 0.019% of a point. This should give you a close idea of what you’d pay if you don’t buy any discount points at closing.

How Ally Bank scores on mortgage rates and loan costs

Yahoo Finance uses 2023 Home Mortgage Disclosure Act data made up of 10 million home loan applications to score mortgage lenders on issued interest rates and total mortgage loan costs. We score each lender on a scale of 1 (lowest) to 5 (highest).

For example, with mortgage rates a lender with a lower score charged a higher-than-median mortgage interest rate for loans issued in 2023. A higher score would indicate a lender granted lower-than-median home loan interest rates to borrowers in 2023.

With total home loan costs, a lower score would indicate that a lender charged higher-than-median total home loan costs in 2023. A high rating would mean a mortgage lender offered lower-than-median all-in home loan costs in 2023.

Ally home loan rates score: 4 out of 5 stars

Ally total loan costs score: 4 out of 5 stars

What this means: Ally offered a lower-than-median mortgage rate of 6.375% with a lower-than-median loan cost of $5,332.58 to borrowers in 2023.

Ally mortgage application

There’s no way to submit an online application for a mortgage with Ally. Instead, you’ll need to start with Ally’s preapproval process.

Ally mortgage preapproval

The easiest way to start Ally’s mortgage preapproval process is to head to its “Mortgage Rates” page. There, just below the big image up top, you’ll find two buttons on the right-hand side of the page that say “Purchase” and “Refinance.” Those buttons take you right into the preapproval application. Here’s the kicker: Ally’s preapproval process is managed by Better Mortgage, while Ally Bank remains your lender.

Once you get into the application, you’ll provide some basic information about your home search: type of residence, purchase timeline, and whether you’re a first-time buyer. You’ll need to enter your email and phone number (ew) to keep the preapproval process going. We opted out of the process here, because to go any further, we’d need to consent to being texted or called by Ally or “its authorized parties.” Nope.

While we don’t know what’s beyond this point, we’re assuming you’ll need to enter some personal information, including income and consent to some sort of credit check. We wish we had more information.

Dig deeper: Can you get a mortgage with good (but not great) credit? Absolutely.

As we mentioned, Ally offers an excellent set of home-buying tools. Buyers can parse an extensive article library to learn about different parts of the home purchase and refinance processes. Data lovers will find three mortgage calculators, available under “Tools” in the main “Mortgage” navigation, including:

Learn more: How much house can you afford? Use Yahoo’s home affordability calculator.

Ally Bank mortgage pros and cons

Pros

• Ally Bank scored a high rating (4) for its competitive interest rates.

• Ally mortgage also ranks highly (4) for offering lower-than-median loan costs, according to 2023 HMDA data.

• Ally has robust online resources, especially for first-time buyers.

• Ally Bank earns our highest rating (5) for Mortgage Rate Transparency. Its clear disclosure of rates, discount points, and monthly payments is the exception, not the industry norm.

Cons

• Ally Bank earned Yahoo Finance’s lowest rating (1) for Affordability due to its lack of mortgage options. It doesn’t offer FHA, VA, or USDA loans and doesn’t seem to offer other low-down-payment options.

• Although Ally has many impressive online tools, it only offers three calculators, earning it a 3 overall for Online Features. You can find lots of in-depth calculators on other lenders’ websites.

How Ally compares to other mortgage lenders

Ally Bank mortgages vs. Better Mortgage

It’s worth mentioning again that Ally’s preapproval application is powered by Better Mortgage. That could blur the lines between the two lenders, especially since both seem to offer a product called a One Day Mortgage. Both lenders also promise speedy closing timelines — Ally up to 10 days and Better up to 17 days faster than the industry average.

Neither buyer offers FHA or USDA loans. However, Better does offer VA loans, which is a step above Ally for those who qualify. One additional plus is that Better offers HELOCs, a plus for those looking to leverage their home equity.

Better Mortgage review

Ally Bank mortgages vs. Rocket Mortgage

We can sum up how Ally Bank and Rocket Mortgage compare in one concise statement: Rocket offers everything that Ally does, and a world more.

Rocket ranks well on our best FHA lenders list and offers a load of options for first-time buyers, including a 1% down payment mortgage option, 3% down conventional loans, and zero-down VA loans. Rocket also offers home equity loans compared to Ally’s lack of home equity lending options.

However, Ally does charge fewer loan costs than Rocket, according to 2023 HMDA data.

Rocket Mortgage review

Ally mortgage FAQs

Does Ally do home mortgages?

Ally Bank offers a limited selection of home mortgages, including traditional conforming and jumbo loan options. Both loan types are available as fixed- or adjustable-rate and come in a wide range of loan terms. Ally does not offer government-backed mortgages, like FHA, VA, or USDA loans.

Is Better Mortgage owned by Ally?

Better Mortgage is not owned by Ally Bank. While Ally uses Better’s digital capabilities to process preapprovals and speed along the closing process and the two companies are in a partnership, they do not share ownership.

What is the mortgage rate for Ally Bank?

Mortgage rates at Ally Bank vary based on several criteria, including loan type, credit score, and discount points or credits paid at closing. To obtain rate estimates based on your unique buying or refinancing situation, visit Ally’s “Mortgage Rates” page on its website and choose “Customize your rate.”

Methodology:

Yahoo Finance reviews and scores mortgage lenders with quintile scoring in five primary categories: 1) Interest rates. Using 2023 Home Mortgage Disclosure Act data comprised of 10 million home loan applications, we score mortgage lenders on issued mortgage rates below or above the annual median of reporting lenders. 2) Affordability. A measure of loan product availability and the willingness of a lender to offer government-backed loans, low down payments, down payment assistance, and consideration of nontraditional credit. 3) Loan costs. HMDA data is again analyzed, and lenders are rated based on total loan costs compared to the annual median. 4) Rate transparency. The ability of a website user to obtain a mortgage interest rate estimate. We score lenders based on whether rates are enhanced with discount points or high credit score requirements, disclaimers revealing rate assumptions, sample advertised rates, and whether adjustable or no discount point rate estimates are available. 5) Online features. An analysis of the educational material, calculators, and additional resources available to users.

Review of Nationwide Multistate Licensing System (NMLS) data on regulatory actions can trigger a penalty to the score of any lender with a consumer mortgage-related administrative or enforcement action within the past five years.

Advertisers or sponsorships do not influence ratings.

Editorial disclosure for mortgages:

The information in this article has not been reviewed or approved by any advertiser. The details on financial products, including interest rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the lender’s website for the most current information. This site doesn’t include all currently available offers.

This article was edited by Laura Grace Tarpley.