Ally Bank Mortgage Review 2024

Ally offers home purchase loans and mortgage refinancing options for primary residences, vacation homes, investment properties and modular homes. Interest rates are based on current mortgage rates and the housing market, as well as your credit score, property location, property type, loan amount, loan type, repayment term and loan-to-value (LTV) ratio.

Conventional Mortgages

Borrowers can choose from either fixed-rate or adjustable-rate conventional mortgages at Ally.

The lender also offers Fannie Mae’s HomeReady Mortgage program. Designed for first-time homebuyers, down payments start as low as 3%, and there may be opportunities to save on private mortgage insurance (PMI). This program requires at least one of the borrowers applying to complete an online homeownership education course.

Jumbo Loans

Jumbo loans are typically necessary for houses above $726,200. However, the threshold for a jumbo loan may be higher in some areas with more competitive real estate markets. Loans are available up to $4 million and can be used for primary homes, vacation homes and investment properties. Rates may be fixed or adjustable, and down payments start at 10.01%. Expect closing costs between 2% and 5% of the home purchase price.

Mortgage Refinancing

In addition to loans for purchasing homes, Ally offers fixed- and adjustable-rate mortgage refinancing. Similar to the mortgage application process, you can see if you qualify online in as few as 15 minutes.

Loan Servicing

Ally Bank underwrites Ally mortgages, and the bank may handle servicing the loans. To determine whether Ally will service your home loan or sell it to a third-party servicer, review the “Other Considerations” section of your loan estimate.

The company offers an online portal where current customers can manage their home loans using the Snapshot tool. The platform also lets borrowers view upcoming payments, sign up for automatic payments and monitor their payment progress. Snapshot is also available via Ally’s mobile app.

Customer Support

For new home loan applications, you can contact Ally via phone, Monday through Friday from 9 a.m. to 9 p.m. ET and Saturday from 10 a.m. to 4 p.m. ET. Current Ally mortgage customers can contact a separate customer support line Monday through Friday from 8:30 a.m. to 8 p.m. ET and Saturday from 8:30 a.m. to 1 p.m. ET.

Minimum borrower requirements are based mainly on criteria set forth by government-sponsored finance companies, like Fannie Mae and Freddie Mac, that package and sell mortgages. These are some general borrower requirements to be aware of when applying for an Ally mortgage.

Minimum Credit Score

Credit score requirements vary by mortgage type. Ally Bank states that borrowers must have a minimum credit score of 620 to qualify for a conventional mortgage or the HomeReady program. The bank said it requires a credit score of 680 to qualify for a jumbo mortgage loan.

Maximum Debt-to-Income Ratio

Your debt-to-income (DTI) ratio represents your gross monthly income compared to your total monthly debt payments. The higher your DTI, the more risk you pose to mortgage lenders. Ally says it typically accepts borrowers with DTI ratios of up to 43%. To qualify for the HomeReady mortgage, you must have a DTI of less than 50% and income equal to or less than 80% of the area median where the home is located.

Down Payment

Down payment requirements vary by loan type. Generally, you should expect to put down 20% of the home price, but this isn’t always necessary. For example, the HomeReady mortgage program only requires down payments as low as 3%. Ally requires a minimum 10% down payment for jumbo loans. The bank also offers a down payment calculator to help you identify how much cash you’ll need at closing.

Buying PMI may be necessary if you make a down payment of less than 20% of the home price. This can increase your overall cost of borrowing, so keep this in mind when agreeing to loan terms.

Ally doesn’t charge application, origination, processing or underwriting fees, helping the company stand out from most mortgage lenders. The most common fees charged by Ally’s competitors include origination, appraisal, underwriting and rate lock fees. You’ll still need to cover other closing costs, which often total between 2% and 5% of the purchase price.

Follow these steps to apply for an Ally mortgage:

1. Estimate your budget. Before shopping for homes, determine how much you can afford to pay for a property. Ally provides a home affordability calculator and a mortgage payment calculator so you can search for houses that fit your budget.
2. Get preapproved. Ally offers an online preapproval process that reportedly takes as little as three minutes and only involves a soft credit check, so your credit score won’t be affected. Plus, preapproval doesn’t require any fees or submitting documents. Complete the online application; if approved, you can access your preapproval letter within a few minutes.
3. Make an offer. With your preapproval letter, you can make an offer on the home you want to buy. Having preapproval can make your offer more competitive and simplify the mortgage process.
4. Complete an application. If your offer is accepted, begin the formal application process by completing a full application and uploading additional documentation for your loan officer. Documents you need will include recent pay stubs, employment records, bank statements and tax returns to complete your application. Ally is an online mortgage lender, so you can complete the entire process online—from document uploads to signing and submitting application materials.
5. Await loan underwriting. In addition to submitting documents during the initial application process, you may also need a letter of explanation for gaps in employment longer than 30 days, proof of other income and assets, landlord information, proof of student loan payments and evidence of judgments, liens and divorce/separation decrees. Watch closely for communications from your loan officer and provide additional information quickly to keep the underwriting process on schedule.
6. Close. Once your loan moves through underwriting and the loan is finalized, you can close on your new house. Closing is done in person and Ally will guide you through the process and let you know where to be and when. According to Ally, customers typically close on their mortgages in 40.3 days, up to 10 days faster than the April 2023 industry average of 53.1 days.

Getting turned down for a mortgage can happen for one of several reasons. For example, if you have a low credit score or thin credit history, the lender may consider you too much of a risk. Your application could also be denied if you have insufficient income or a high DTI. Sometimes, errors or missing information in the application can also lead to rejection. If you get turned down for a mortgage, contact the lender to find out why. Then, take steps to improve your application based on this information.

If your credit score is low, take steps to improve your score before reapplying. This may include disputing errors on your credit report, paying down existing debts or increasing your income. If your application was rejected due to errors, make the necessary corrections and reapply. Finally, consider buying a less expensive home, working with a different lender or waiting until you can make a larger down payment.

Ally Mortgage has a one- out of five-star rating with the Better Business Bureau (BBB) based on 13 customer reviews. Similarly, Ally Financial has a 1.2-star rating based on 424 reviews on Trustpilot—though many of these are related to other loan types.

Reviews mention a lack of communication throughout the underwriting process and issues making payments once a mortgage is approved.

Alternatives to Ally Bank

We graded Ally based on features that have a meaningful impact on the cost of a mortgage and a borrower’s experience, including interest rates, loan options, accessibility, closing time and customer service.

We award bonus points if a lender offers a specialty rate discount or mortgage product, a home equity product or maintains a fully online mortgage application process.

Our scoring method is broken down as follows:

• Interest rate. 20%
• Loan options. 20%
• Time to close. 20%
• Accessibility. 20%
• Customer service experience. 20%
• Bonus points. Up to 25 points

We chose to focus on these core elements to bring forward lenders that offer the most competitive rates while also providing a satisfactory customer experience accessible to borrowers of all financial backgrounds. We believe this scoring system best reflects consumers’ top priorities when comparison shopping for mortgage lenders.

To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Mortgage Lenders.