Ally Mortgage Review 2019
Ideal for home buyers and mortgage refinancers who want no-frills home loans and attentive customer service.
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The Bottom Line: Ally is an online bank with an array of conventional loan terms, although applying requires a phone call.
Pros & Cons
- Clear listings of interest rates and discount points.
- Borrowers are assigned a loan officer who is the main point of contact.
- Fee discount available for existing Ally customers.
- Wide array of fixed- and adjustable-rate loans.
- FHA, VA and USDA loans are unavailable.
- Borrowers may give some information online, but loan officers help borrowers complete applications over the phone.
- Does not offer home equity loans or lines of credit.
Ally Home is the mortgage-lending operation of Ally Financial, a brand that has been around since only 2010, but has a much longer history under another name.
Ally began life in 1919 as GMAC, a division of General Motors that financed car dealers. GMAC soon branched into auto financing for consumers. The financial institution grew over the decades, and eventually expanded into the mortgage business in the 1980s.
After the financial crash in 2008, GMAC adopted the Ally name and became an online-only bank. Ally Financial didn't offer mortgages for a few years, but in late 2016 it established the Ally Home Team.
The resulting mortgage-lending operation interacts with borrowers primarily over the phone and via email.
Ally mortgage products
Ally offers loans to buy homes and refinance mortgages. It doesn't offer home loans insured or guaranteed by the Federal Housing Administration (FHA), Department of Veterans Affairs (VA) or the Department of Agriculture (USDA). It plans to introduce FHA and VA loans in 2019, says Glenn Brunker, mortgage executive for Ally Home.
» MORE: What is an FHA loan?
Borrowers may choose mortgages with 30-, 25-, 20-, 15- and 10-year fixed-rate terms, as well as 10/1, 7/1 and 5/1 adjustable-rate mortgages.
For mortgages under the conforming limit (currently $484,350), Ally allows down payments as low as 3% under the Fannie Mae HomeReady program for low- to moderate-income borrowers. For jumbo loans, which exceed the conforming limit, the minimum down payment is 15%, Brunker says.
The minimum credit score for a conventional loan is 620 and the minimum credit score for a jumbo loan is 700.
» MORE: How to choose the best mortgage
Ally mortgage process
Applying for a mortgage with Ally involves talking with a loan officer on the phone.
You can start the process by calling Ally's toll-free number and talking to a loan officer. Alternatively, you can begin by answering a 12-question form on the bank's website; the final question asks for your phone number, and borrowers usually get a call from a loan officer within five minutes of submitting the form, Brunker says.
You and the loan officer can discuss various combinations of mortgage terms, interest rates and discount points — information that is available on the Ally website, too.
Brunker explains that this first conversation may result in a pre-qualification, the first step in learning how much a customer can borrow. Or the borrower can provide information to complete a formal loan application in this or a subsequent phone call.
Ally sends and receives required financial documents and disclosures securely through the DocuSign service. Borrowers may also elect to receive disclosures in the mail.
Ally mortgage rates and fees
Ally has a flat fee of $995 on conforming conventional loans, Brunker says. The bank offers a $500 discount on closing costs for customers who have had an Ally account for more than 30 days. The offer is available to customers of Ally Bank or Ally Invest and customers with Ally mortgages or auto loans or Ally Vehicle Protection.
Free rate locks are available for up to 75 days, and extended rate locks may be available for a fee. Ally's website lists combinations of interest rates and discount points, which are fees you may choose to pay to reduce your mortgage rate.
Ally customer service
Ally has no branches, so customers don't meet in person with loan officers. But callers aren't randomly connected to the next available agent. "Throughout the entire end-to-end process, the customer will actually engage with two people," Brunker says. They're a loan officer, who is the primary contact, and a loan processor.
Brunker says Ally informs borrowers whenever key milestones are reached, including when the loan is initially approved, when the bank receives the appraisal report, and when the final loan decision is made.
Although Ally intends eventually to offer the capability of applying for a loan completely online, it is committed to providing personal support from loan officers, Brunker says. He wants to avoid "forcing customers to go down a digital path exclusively."
Millennials are 58% of Ally's customer base, Brunker says, and they "actually want, in their homebuying journey, a person of trust. They understand that it's most likely the largest financial transaction in their life, and they want somebody to talk to."
The customer service phone lines are open 8 a.m. to 11 p.m. Eastern time Monday through Friday, and 10 a.m. to 4 p.m. Eastern on Saturday.
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