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Ally Home Mortgage Overview
Ally Home, the mortgage division of Ally Financial, is an online lender with a seamless digital mortgage process. Borrowers can get a mortgage pre-approval, upload documents, track the progress of a loan application, and electronically sign disclosures — all online or through an easy-to-use mobile app.
And because it’s a full-service online bank, Ally also offers checking and savings accounts, auto loans, investing products, personal loans, and more. For existing banking customers, getting a mortgage with Ally comes with the added benefit of keeping all your accounts with one bank.
The drawback: Ally’s mortgage menu and footprint are limited at the moment. Borrowers in 37 states and the District of Columbia can apply for a conventional, jumbo, or refinance mortgage, but if you’re looking for a government-backed loan such as an FHA or USDA loan, you’re out of luck.
Pros and Cons of Ally Home Mortgage
Pre-approval and applications online via mobile app
Customizable online rates
Ally customers get a $500 discount on closing costs
No government-backed mortgages such as FHA loans, VA loans, or USDA loans
No home equity loans or lines of credit
No service in Alaska, Connecticut, Hawaii, Maryland, Massachusetts, Minnesota, Nevada, New Hampshire, New York, North Carolina, Vermont, Virginia, or Wyoming
No physical locations
Ally Home Mortgage: Loan Types and Products
Here’s what mortgage types Ally Bank is offering right now:
Ally doesn’t offer U.S. Department of Agriculture mortgages (USDA loans), Federal Housing Administration mortgages (FHA loans), Department of Veterans Affairs mortgages (VA loans), reverse mortgages, renovations loans, and other niche products.
Ally offers jumbo loans that can stretch up to $4 million. Down payment requirements vary depending on the amount you’re borrowing.
And if you have an existing mortgage, you can swap it out with a rate-and-term refinance — potentially saving you money — or tap your home equity using a cash-out refinance.
With Ally, you’ll have a choice between a fixed-rate loan, where the rate never changes, and an adjustable-rate mortgage (ARM), in which the rate may change periodically. You can choose a fixed-rate term of 30, 20, or 15 years and ARM terms of 10/1, 7/1, and 5/1. With a 5/1 ARM, for example, you’d have the same interest rate for the first five years. After that, the rate may go up or down once a year for the remaining term, depending on the broader mortgage market.
Ally Home Mortgage Transparency
Ally Home’s website is easy to navigate and clearly lays out the homebuying process. It also comes with several calculators and guides to help you choose the best mortgage for your situation and figure out how much home you can afford.
Customers can get a customized rate quote online in minutes and even apply for a loan pre-approval. If borrowers have questions or need assistance, loan officers are available by phone call. Ally doesn’t maintain in-person branches as some other lenders do, so talking face-to-face is not an option.
Ally Home Mortgage: Rates and Fees
Ally Home advertises purchase and refinance rates for 15-, 20-, and 30-year mortgages plus a few ARM terms. The bank also clearly explains how much money you’d pay for discount points, which is an optional fee you can pay to lower your rate.
To qualify for a mortgage, you’ll need a credit score of at least 620 for conforming loans and 700 for jumbo loans. However, a higher score will likely help you get better mortgage rates.
While the industry average for closing on a mortgage loan is 58 days, Ally Home’s average is around 38 days this year on purchase loans, according to an Ally spokesperson. This can get you to the closing table quicker, which might sweeten the deal when you’re putting in a purchase offer.
You can lock in an interest rate online for up to 75 days for free and potentially extend the rate lock. Current Ally customers get $500 off closing costs, and borrowers never pay lender fees or prepayment penalties.
However, borrowers may pay out of pocket for:
Refinancing With Ally Home Mortgage
If you have an existing mortgage, you can refinance with Ally Home using these options:
- Cash-out refinance, which allows you to take out a mortgage for more than you owe, pay down your current mortgage, and keep the extra cash. You then repay the new, larger loan over time and can use the money for any type of expense.
- Rate-and-term refinance, in which you change the loan term, interest rate, or both. Homeowners usually do this to shave money off their monthly mortgage payments, get rid of private mortgage insurance, or accelerate their payoff timeline.
Plus, you’ll get a $500 discount if you’re refinancing an existing Ally mortgage.
Ally Home Mortgage Compared to Other Mortgage Lenders
|Ally Home Mortgage||Better Mortgage||Fairway Independent Mortgage Corp.|
|Minimum credit score||620 for conforming; 700 for jumbo||620 for conforming; 700 for jumbo||620 for conventional loans; 660 for jumbo loans; 600 for FHA loans; 600 for VA loans|
|Minimum down payment||3% for conventional; 5% for conforming; up to 20% for jumbo loans||3%||0% to 5%|
|Where does the lender operate?||37 states and Washington, D.C.||46 states and Washington, D.C.||All 50 states and Washington, D.C.|
|Major loan types||Conventional, jumbo, adjustable-rate, fixed-rate, refinance, cash-out refinance||Conventional, jumbo, FHA, adjustable-rate, fixed-rate, refinance, cash-out refinance||Conventional, jumbo, VA, FHA, USDA, various renovation loans, adjustable-rate, fixed-rate, refinance, cash-out refinance, reverse mortgages, home equity loans, home equity lines of credit|
How to Shop Around to Get the Best Mortgage Rate
Getting the best mortgage rate on your home loan is important because it can potentially save you thousands of dollars in interest over the life of the loan.
To find a good deal, start by gathering rate quotes from multiple lenders. According to a Freddie Mac survey, borrowers stand to save the most if they get at least five quotes. Then, compare the interest rate and closing costs. The rates might differ slightly, but an online mortgage calculator can help you figure out how much savings lie within that difference.
Take a look at one example: Let’s say you receive two mortgage rate quotes on a home worth $300,000 with a 20% down payment and 30-year term.
|Interest Rate||Monthly principal and interest payment||Interest saved|
With a 3.5% interest rate, the monthly principal and interest payment comes out to $1,077. But with a 3.25% interest rate, you save $33 a month on interest costs. That might not sound like much, but it adds up to $11,880 in savings over 30 years.
Ally Home could be a good option if you’re looking for a standard mortgage and prefer a totally digital application process. You’ll be able to get a pre-approval letter online or through the app in minutes, which can help you kick-start the home-shopping process. But as with any financial product, it’s always a smart idea to compare offers to make sure you’re getting the best deal.