The bottom line: Ally Home offers online mortgage applications and loan tracking, with an emphasis on jumbo loans. But borrowers who want FHA or VA loans are out of luck.
Pros & Cons
Excels in online convenience, with document upload, loan tracking and e-signatures.
Offers good rate transparency; rate shoppers can see customized interest rates.
Limited variety of loan products: FHA, VA and USDA loans are unavailable.
Doesn't offer home equity loans and lines of credit.
Ally Home at a glance:
Ally has robust online tools for home buyers and people seeking to refinance who prefer to apply for a loan without a ton of guidance from a loan officer. About half of Ally’s home loans are jumbo mortgages.
Here's a breakdown of Ally Home's overall score:
Variety of loan types: 4 of 5 stars
Variety of loan products: 2 of 5 stars
Online convenience: 5 of 5 stars
Rates and fees: 4.5 of 5 stars
Rate transparency: 5 of 5 stars
Ally Home loan types and products
Ally Home is the mortgage-lending operation of Ally Financial. Ally began more than a century ago as GMAC, a division of General Motors that financed car dealers. It has shifted gears many times over the years, and is now an online-only bank.
Ally Home offers loans to buy homes and refinance mortgages. It offers jumbo loans (mortgages for large amounts) with down payments as low as 10%, without private mortgage insurance. It doesn't offer home loans insured or guaranteed by the Federal Housing Administration (FHA loans), Department of Veterans Affairs (VA loans) or the Department of Agriculture (USDA loans).
Borrowers may choose mortgages with 30-, 20- and 15-year fixed-rate terms, as well as 10/1, 7/1 and 5/1 adjustable-rate mortgages.
Ally Home allows down payments as low as 3% under the Fannie Mae HomeReady program for low- to moderate-income borrowers.
Jumbo loans without mortgage insurance are available for qualified borrowers who make down payments as low as 10% for loans up to $1.5 million, the company says. Ally Home allows down payments as low as 20% for jumbo loans up to $2 million. Ally Home may lend up to $4 million and considers exceptions "on an individual basis and reviewed with Ally Home's relationship expert," says mortgage executive Glenn Brunker.
He adds that about half of Ally Home's loans are jumbos and that the bank is experienced at "delivering against the unique needs of more affluent borrowers," who may have complex finances and nontraditional assets.
» MORE: How to choose the best mortgage
Ally Home online convenience
For most customers, Ally Home offers what it calls a "fully guided digital experience." Here's how that phrase is defined:
The digital experience refers to the ability to apply for a mortgage on Ally Home's website using a computer or mobile device. Customers may fill out the entire application online, securely upload documents, and electronically sign disclosures. Borrowers may opt for online verification of income and assets.
By "fully guided," Ally Home means two things. First, the online application is in a question-and-answer format. "It doesn't feel like an application," Brunker says. "It's more intuitive. It asks questions in commonly used language." Second, loan consultants are available to answer questions at any point in the process, according to Ally Home.
Customers start by clicking a button and indicating whether they want to buy a home or refinance an existing loan. Then, the Q&A format begins and the customer provides information about the property, income and assets. After that, the borrower is presented with mortgage options.
Ally Home operated its digital platform in more than 40 states as of February 2020 and plans to be in all 50 states later in the year. In the meantime, applications in the other states require talking with a loan officer on the phone, along with the secure online uploading of documents.
Brunker says Ally Home 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.
Ally Home mortgage rates and fees
One of the most important considerations when choosing a mortgage lender is understanding what the loan will cost. To provide consumers with a general sense of what a lender might charge, NerdWallet scores lenders on two factors regarding fees and mortgage rates:
A lender's average origination fee compared with the median of all lenders reporting under the Home Mortgage Disclosure Act. Ally earns 4 out of 5 stars on this factor.
A lender's offered mortgage rates compared with the best available on comparable loans. Ally earns 5 of 5 stars on this factor.
Borrowers should consider the balance between lender fees and mortgage rates. While it's not always the case, paying upfront fees can lower your mortgage interest rate. Some lenders will charge higher upfront fees to lower their advertised interest rate and make it more attractive. Some lenders just charge higher upfront fees.
You can decide to buy discount points — a fee paid with your closing costs — to reduce your mortgage rate.
Deciding whether you want to pay higher upfront fees is a matter of considering how long you plan to live in your home and how much cash you have to apply toward closing costs when you sign the loan paperwork.
Ally Home rate transparency
Ally Home's website allows you to shop rates that are customized according to your ZIP code, home value, loan balance or down payment, credit score range, property type (single-family, condo, townhouse or multifamily) and property use (primary home, second home, investment property).
The website displays results for loan type, interest rate, annual percentage rate, discount points or credits due at closing, and the estimated monthly principal-and-interest payments (excluding taxes and insurance). This summary doesn't itemize fees charged by Ally or third parties, which are common closing costs.
More from NerdWallet
NerdWallet's star ratings for mortgage lenders are awarded based on our evaluation of the products and services that lenders offer to consumers who are actively shopping for the best mortgage. The six key areas we evaluated include the loan types and loan products offered, online capabilities, online mortgage rate information, customer service and the number of complaints filed with the Consumer Financial Protection Bureau as a percentage of loans issued. We also awarded lenders up to one bonus star for a unique program or borrower focus that set them apart from other lenders. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.