Ally offers conventional, jumbo and refinance mortgage loan options to qualified borrowers, with down payments on select loans as low as 3% for borrowers with a 620 minimum credit score. MoneyGeek’s Ally mortgage loan review breaks down what you need to know before financing your home with this lender.
MoneyGeek’s Take
Ally Mortgage Review
Updated: November 6, 2024
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At a Glance: Ally Mortgages
- Ally
- 620 for conventional loans; above 700 for jumbo loansMinimum Credit Score
- Conventional Loan: 3% for first-time homebuyers Fannie Mae’s HomeReady Mortgage program: 3% Jumbo Loan: 10% Minimum Down Payment
- Conventional, Jumbo, HomeReady and RefinancingLoan Products Offered
- 45 states and Washington, D.C. (excludes Hawaii, Massachusetts, New Hampshire, Nevada and Virginia)States of Operation
- Yes Online Application
Ally Financial dates back to 1919 when it was established as GMAC Bank and offered financing options to auto dealers. Ally began distributing its direct-to-consumer home loans in 2016. Today, Ally operates entirely online and has become one of the top 25 financial holding companies in the country, with 10.5 million customers.
Ally offers various purchase and refinancing mortgages with fixed- and adjustable-rate options. Individuals looking to finance high-value properties can take advantage of Ally’s jumbo loans. Alternatively, low- and mid-income buyers may opt for its HomeReady Mortgage program. Depending on the type of mortgage, the down payment can be as low as 3%.
Applying for a mortgage loan with Ally is also relatively easy. You can finish the process in minutes by filling out a form online. Approved borrowers can typically expect to close within a few weeks or months. That said, you can expect up to 10 days faster than the industry average.
Potential borrowers need at least a 620 credit score to qualify. Although the company performs a soft credit check at first, it will conduct a hard credit inquiry if you continue with your application.
Aside from mortgage products, Ally has other personal banking services that include investment, retirement, checking and savings banking, auto financing and personal loans.
Pros
- Convenient online application
- Pre-approval in minutes
- No application or processing fees
- No underwriting or origination fees
- Flexible down payment options as low as 3%
Cons
- Limited loan products
- $550 appraisal fee
- Minimum credit score requirements
Ally Financial dates back to 1919 when it was established as GMAC Bank and offered financing options to auto dealers. Ally began distributing its direct-to-consumer home loans in 2016. Today, Ally operates entirely online and has become one of the top 25 financial holding companies in the country, with 10.5 million customers.
Ally offers various purchase and refinancing mortgages with fixed- and adjustable-rate options. Individuals looking to finance high-value properties can take advantage of Ally’s jumbo loans. Alternatively, low- and mid-income buyers may opt for its HomeReady Mortgage program. Depending on the type of mortgage, the down payment can be as low as 3%.
Applying for a mortgage loan with Ally is also relatively easy. You can finish the process in minutes by filling out a form online. Approved borrowers can typically expect to close within a few weeks or months. That said, you can expect up to 10 days faster than the industry average.
Potential borrowers need at least a 620 credit score to qualify. Although the company performs a soft credit check at first, it will conduct a hard credit inquiry if you continue with your application.
Aside from mortgage products, Ally has other personal banking services that include investment, retirement, checking and savings banking, auto financing and personal loans.
Ally Mortgage Loan Types, Details and Requirements
Application requirements and terms vary depending on the lender. Different loan types also have different rates and features. MoneyGeek’s Ally mortgage review details the important features you need to know.
Mortgage Types Offered
- Conventional Loans
- HomeReady (low- to mid-income)
- Jumbo Loans
- Refinancing
It’s worth noting that Ally does not offer government-backed loans like FHA or USDA loans.
Mortgage Rates
Ally determines borrowers’ rates based on current mortgage rates and the housing market. The company also considers individualized factors like loan amount, mortgage type, mortgage term, credit score and property location. This means that interest rates will vary per person.
Additional Fees
Although Ally does not charge application, underwriting, processing or origination fees, there are other costs you need to note.
- Appraisal fee: Ally requires borrowers to complete an appraisal process that determines the property's current market value. The appraisal fee is $550. However, Ally will refund borrowers if the appraisal costs less and cover additional costs if $550 is not enough.
- Closing costs: Homebuyers pay closing costs, typically 2% to 5% of the purchase price.
Minimum Borrowing Requirements
For most mortgage products, Ally requires a 620 minimum credit score. However, if you are applying for jumbo loans, you need to have a credit score above 700.
In terms of down payment, Ally allows a 3% down payment for first-time buyers if they opt for the HomeReady Mortgage program. Individuals willing to pay extra for private mortgage insurance (PMI) may put down as little as 5% to secure a better mortgage APR. The minimum down payment for jumbo loans is 10%.
Ally Mortgage Application Requirements
Interested Ally mortgage loan applicants must provide personal information and documents that show proof of their financial situation, including:
- 1
Social Security number
- 2
Employment history
- 3
Most recent pay stubs
- 4
Bank, retirement and brokerage statements
- 5
Tax returns
Depending on the borrower, Ally may ask for additional documents. Possible additional documents include:
- 1
Letter of explanation for gaps in employment more than 30 days (if applicable)
- 2
Proof of other income or assets
- 3
Divorce settlement/separation agreement
- 4
Paid-in-full statements for all judgments/liens
- 5
Landlord information for verification of rent payments
- 6
Proof of student loan payments
Is Ally Right for You?
Finding the best mortgage lender for you depends on your individual needs and circumstances. MoneyGeek can help you determine if Ally aligns with what you want in a lender.
Who Ally Is Perfect For
Based on MoneyGeek’s Ally mortgage review, this lender is optimal for borrowers who value convenience. Ally clients can easily prequalify, apply and access various services through the company’s online tools and mobile application. You’ll only need to meet in person on closing day.
It’s also a good option for individuals who want a hassle-free process. Ally’s pre-approval process takes only three minutes, while the application takes about 15 minutes.
Those looking for a low-cost down payment may also consider Ally, which offers down payments as low as 3% to 5%.
Who Should Not Choose Ally
People looking for government-backed loans may not find Ally a good option as the company does not offer VA, FHA or USDA loans. You will also not find home equity loans or lines of credit at Ally.
If you have a credit score lower than 620, you likely will not qualify for an Ally mortgage.
Finally, if you’re more comfortable completing your application process in person, Ally may not be for you. It generally uses online and mobile applications for its mortgage products.
How to Apply for an Ally Mortgage Loan
Each mortgage lender has its own application process. MoneyGeek lists the necessary steps to apply for an Ally mortgage loan.
- 1
Prequalify
Find out if you qualify for pre-approval. Ally allows interested borrowers to check for pre-approved by completing an online form in as little as three minutes. Upon completion, you’ll receive a personalized quote (that will not affect your credit score) and a pre-approval letter you can use when buying a property.
- 2
Fill Out the Application Form
You can proceed with the application if you've already found a property and made an offer. Note that Ally requires borrowers to undergo an appraisal process and charges an appraisal fee of $550. If the actual appraisal costs less, Ally will refund you for the difference. If it costs more, the company will cover the remaining costs.
Having started the application, you’ll have to upload, sign and submit the necessary documents, including but not limited to:
- Most recent pay stubs
- Employment history
- Bank, retirement and brokerage statements
- Tax returns
- Social Security number
Depending on the borrower, there may be additional paperwork. You will also need to upload the signed purchase agreement and lock in your rate.
- 3
Wait for Approval
Ally’s underwriting team will review your documents and conduct credit checks. They will inform you if there are additional tasks to complete or documents to provide.
- 4
Review Loan Agreement
Once Ally approves your loan, it will send your loan agreement. Review the fees and rates stated in the loan agreement. Check the details and make sure you understand all the terms and conditions.
- 5
Sign Loan Agreement
If you’re satisfied with all the terms and conditions, you can sign the document. Although the entire process occurs online, you can seek guidance from an Ally representative by texting, calling or sending an email.
- 6
Closing
To confirm your loan, Ally will send you a Closing Disclosure. Review this document and prepare for the closing day, when you’ll meet with your real estate agent and the closing agent. This meeting is typically done in a lawyer’s office, office of the title company or an agreed-upon location.
During closing, you will have to pay the closing costs. This may vary per borrower but is typically 2% to 5%.
- 7
Make Payments
The last step is for you to make payments. Log in to your Ally home loan account online, select Payment and proceed. You can opt to make one-time monthly loan payments or set up autopay.
What to Do if You Are Rejected by Ally
Applying for a loan does not guarantee approval, and the lender may deny your application. Reasons for loan application denial include not meeting the minimum credit score, income or credit history requirements.
If Ally rejects you, reach out to a representative to determine why and see if it would be possible to modify the terms of your application before trying again with Ally or another lender. Try not to apply for another loan until you address why your application was denied in the first place.
You can also talk to your bank, a financial advisor or a loan officer for additional information and resources. It would also help to research other available options based on your needs. Doing these will increase your chances of getting approved in the future.
Frequently Asked Questions About Mortgages From Ally
MoneyGeek’s Ally mortgage loan review aims to give you the information you can use in your decision-making process. Below are some of the most commonly asked questions about Ally’s mortgage products.
What types of properties are eligible for Ally mortgage loans?
Ally mortgage loans apply to single-family homes, townhomes, condos and multi-family homes.
Who can apply for an Ally mortgage?
Anyone with a credit score of at least 620 can apply for an Ally mortgage loan based on Ally's qualification requirements.
What types of mortgage loans does Ally offer?
Ally offers conventional, jumbo, HomeReady and refinancing loans with fixed and adjustable rates.
Is there a borrowing limit for Ally mortgages?
Ally’s standard limit for a conventional mortgage loan is $647,200, but this can be higher in more competitive real estate markets. For jumbo loans, Ally offers loan amounts up to $4 million.
What is the minimum down payment Ally will accept?
Depending on the type of mortgage loan, borrowers can put down as low as 3% of the purchase fee. You will need at least a 10% down payment for a jumbo loan.
Does Ally require private mortgage insurance (PMI)?
Ally does not require private mortgage insurance (PMI). However, borrowers willing to pay extra for PMI with a 5% down payment usually get better rates.
Does Ally require a property appraisal?
Yes, Ally requires property appraisal and charges a $550 appraisal fee. However, if the appraisal process costs less than $550, Ally will refund the borrower in the amount of the difference. If it costs more, Ally will cover the additional amount.
About Christopher Boston
Christopher (Croix) Boston was the Head of Loans content at MoneyGeek, with over five years of experience researching higher education, mortgage and personal loans.
Boston has a bachelor's degree from the Seattle Pacific University. They pride themselves in using their skills and experience to create quality content that helps people save and spend efficiently.
sources
- Ally. "About Us." Accessed November 6, 2024.
- Ally. "First-Time Homebuyer." Accessed November 6, 2024.
- Ally. "Home Mortgages." Accessed November 6, 2024.
- Ally. "What Credit Score Do I Need to Buy a Home?." Accessed November 6, 2024.
- Ally. "What Documents Will I Need to Provide?." Accessed November 6, 2024.
- Ally. "What Is a Jumbo Loan?." Accessed November 6, 2024.