About Ally Bank Mortgages
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Ally Bank Mortgages (NMLS #181005) is the mortgage lending subsidiary of Ally Financial, a digital financial services company originally founded in 1919 as GMAC. The company offers its direct-to-consumer mortgage loans through an online platform. In 2021, Ally Bank Mortgages originated over $10.4 billion in home loans.
- Doesn’t charge lender fees for loan originations
- Preapproval decisions within minutes
- 100% online application
- No government-backed mortgages (FHA, VA or USDA)
- Few physical branches
Ally Bank Mortgages offers conventional loans and jumbo loans at competitive rates. The company also offers programs to assist first-time homebuyers. You can apply online and receive preapproval in as little as three minutes.
Ally Bank Mortgages publishes its starting rates online for fixed-rate and adjustable-rate mortgages. For the past three years, the company had a fairly low home purchase rate compared with the national average — in 2021, its average rate was 0.2% lower than the national average.
Interest rates depend on several factors, including external factors (like economic conditions) and personal factors (like the borrower’s credit score and debt-to-income ratio). It’s possible that Ally Bank Mortgages was able to offer lower-than-average rates because its applicants had higher-than-average credit scores. For reference, the average credit score in 2021 was 714, according to data from Experian in September that year.
Ally Bank Mortgages offers both fixed-rate mortgages and adjustable-rate mortgages (ARMs). Fixed-rate mortgages carry terms of 15-, 20- or 30- years, and the company offers 5/6, 7/6 and 10/6 ARMs.
With an ARM, you’ll have a low introductory rate for a short period. Then the rate will reset and fluctuate annually or semiannually (depending on the ARM type). So, with a 5/6 ARM, your rate will remain the same for the first five years. After that, it will change every six months for the remainder of the loan term (usually 30 years).
Most borrowers choose fixed-rate mortgages because they offer predictable monthly payments. However, you may choose an ARM if your living situation could be temporary. For instance, you may have plans to sell your home and move to a different state in a few years. If so, getting a lower interest rate during the introductory period of an ARM could help you save money in interest over the short term.
Ally Bank Mortgages average home purchase rate vs. national average
|Year||Difference from national average|
You can start the application process by requesting a rate quote from the Ally Bank Mortgages website. You’ll enter information about the property you want to purchase (including property type and ZIP code). The company will also conduct a soft credit check, which won’t affect your credit score. This helps Ally Bank Mortgages assess how much you can afford.
From there, you should receive a rate quote via email. You can then complete a home loan application to provide more detailed information about your income and assets. The company will also conduct a hard credit check, which shows as an inquiry on your credit report.
Ally Bank Mortgages has partnered with Better Mortgage to offer a 100% online application process. You can upload the required financial documentation to the portal, and if you have questions about your application, home loan experts are available to assist by phone, text or email.
After you submit your application, you could receive a preapproval decision within three minutes. Once preapproved, you can print a customizable approval letter that you can submit when you make an offer.
Ally Bank Mortgages application features
|Mobile document upload|
|Physical branches||5 states|
|Publishes minimum rate on website|
|Rate lock||45 days|
|Pre-qualification (no hard credit pull)|
|Certified approval letter|
Ally Bank Mortgages originates conforming conventional loans (with fixed rates or adjustable rates) and jumbo loans. The company does not currently offer government-backed mortgages like VA, FHA or USDA loans.
Ally Bank Mortgages saw a sizable increase in the number of home purchase applications it received in 2021. In fact, applications more than doubled from the prior year.
In 2021, the company initiated 13,466 home purchase applications. Of those applications, zero preapprovals were denied. About 43% (5,734) of applications for home purchase loans closed, and about 14% (1,820) were denied.
The company’s denial rate is higher than the industry’s as a whole, which is around 8%, which could be a result of only offering conventional mortgage loans — government-backed loans tend to have less strict requirements. It pays to go through the preapproval process to ensure that you meet its requirements.
Loan applications for home purchases only by year
|Home purchase applications||13,466||6,426||4,651|
|Home purchase loans closed||5,734||3.254||2,653|
|Home purchase applications denied||1,820||894||703|
|Home purchase preapprovals denied||0||0||0|
For the past three years, the majority of loans Ally Bank Mortgages originated were for refinancing rather than home purchases. In 2021, about 70% of its loans were refinances and cash-out refinances combined. About 30% were home purchase loans.
Many lenders received more refinancing applications than usual over the past two years, with mortgage rates at record lows in 2020 and 2021. As a result, borrowers chose to refinance their existing mortgages to lock in those lower rates and save money.
Since the start of 2022, however, rates have been rising steadily, so fewer borrowers are expected to refinance this year. Refinancing could still make sense for you if you can lock in a significantly lower rate today than your existing mortgage rate — but remember that refinancing does come with closing costs, so you’ll want to ensure the potential savings can outweigh those costs.
Home purchase vs. refinance loans by year
|Home purchase loans||29.57%||30.44%||48.75%|
Ally Bank Mortgages does not specify its borrower requirements online. Most lenders require at least a 620 credit score to qualify for a conventional loan. Down payment requirements can vary by lender, but most require at least 3% (although 20% down helps avoid paying mortgage insurance premiums).
Jumbo loans typically have higher credit score minimums — at least 700. You may also need to offer a down payment of at least 20%, depending on the loan size and the lender.
|Min. credit score||Min. down payment||Compare with other lenders|
|Conventional||Typically 620||Typically 3%||Mortgage lenders|
Cost and fees
Unlike many other lenders, Ally Bank Mortgage doesn’t charge lender fees on new loans. That means you won’t pay a fee for the application, origination, processing or underwriting. Other lenders may charge an origination fee, which usually accounts for 0.5% to 1% of the loan amount.
Lender fees are part of the overall closing costs, which tend to add up to about 2% to 5% of the total loan amount. Most closing costs are third-party fees for services the buyer must pay for to get a mortgage and purchase the home. These can include home appraisal fees, title search charges, real estate transfer taxes and recording fees.
To better prepare for closing costs, Ally Bank Mortgages will provide you with a Loan Estimate that outlines all these costs and gives an approximate value for each of the fees. You should expect to receive a Loan Estimate within a few days of your preapproval. You’ll get actual Closing Disclosures three days before your closing, which itemizes all your closing costs.
Ally Bank Mortgages also offers the HomeReady Mortgage Program by Fannie Mae, which offers assistance with closing costs and down payments. The program allows funding from outside sources, such as community programs or grants. You can contact a loan advisor at Ally Bank Mortgages to see if you qualify.
- What is Ally Bank Mortgages?
Ally Bank Mortgages is an online mortgage lender that offers conventional and jumbo loans to borrowers in all 50 states. You can request a customized rate quote on the company’s website. You can also complete an application 100% online and receive a preapproval decision within minutes.
- Is Ally Bank Mortgages legit?
Ally Bank Mortgages is a legitimate mortgage lender that originated over $10.4 billion in home loans in 2021. The company eliminated lender fees in 2021 and has since seen a sizable increase in loan applications. You can apply for a mortgage loan online or by calling the company’s contact center.
- Where is Ally Bank Mortgages available?
Ally Bank Mortgages is available in all 50 states. The company currently operates branches in five states: California, Florida, North Carolina, Pennsylvania and Texas.
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