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Alabama Mortgage and Refinance Rates
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Current mortgage rates in Alabama
As of Thursday, April 25, 2024, current interest rates in Alabama are 7.37% for a 30-year fixed mortgage and 6.77% for a 15-year fixed mortgage. Refinance rates are typically slightly higher than purchase rates.
Alabama rate trends
From the start of 2022 until the end of 2023, rates in Alabama followed a steep upward trajectory. However, rates appear to have peaked in the fall of 2023, and have since fallen. Many experts expect rates to gradually decrease throughout 2024.
Learn more: Latest mortgage rate forecast
National mortgage rates by loan type
| Product | Interest Rate | APR |
|---|---|---|
| 30-Year Fixed Rate | 7.30% | 7.35% |
| 15-Year Fixed Rate | 6.67% | 6.75% |
| 5-1 ARM | 6.53% | 7.78% |
| 30-Year Fixed Rate FHA | 7.14% | 7.19% |
| 30-Year Fixed Rate VA | 7.26% | 7.30% |
| 30-Year Fixed Rate Jumbo | 7.35% | 7.40% |
Rates as of Thursday, April 25, 2024 at 6:30 AM
Mortgage statistics in Alabama
Alabama has over 5.1 million residents and continues to grow, according to the U.S. Census Bureau. Here are some other Alabama mortgage and real estate statistics:
- Average home value (as of Feb. 2024): $216,564 (Zillow)
- Homeownership rate: 69.7% (U.S. Census Bureau)
- Average mortgage loan size in 2022: $112,410 (Home Mortgage Disclosure Act)
- Median days to pending sale (as of Feb. 2024): 24 (Zillow)
Mortgage options in Alabama
There’s a variety of mortgage options available to homebuyers in Alabama:
- Alabama conventional mortgages: To qualify for a conventional mortgage, you’ll need a minimum credit score of 620 and a debt-to-income (DTI) ratio no more than 45 percent. With a down payment of less than 20 percent, you’ll need to pay private mortgage insurance (PMI) premiums, as well.
- Alabama FHA loans: If your credit history disqualifies you from a conventional mortgage, you might be able to obtain a loan insured by the Federal Housing Administration (FHA). If you have a down payment of at least 3.5 percent, you could qualify for this type of loan with a credit score as low as 580.
- Alabama VA loans: If you’re a veteran or active-duty member of the military, you might qualify for a mortgage guaranteed by the Department of Veterans Affairs (VA). A VA loan doesn’t require a down payment or mortgage insurance, but you do need to pay a funding fee, which ranges from 1.25 percent to 3.3 percent.
- Alabama USDA loans: If you’re buying a rural property in Alabama, you might be eligible for a mortgage guaranteed by the U.S. Department of Agriculture (USDA). These loans don’t require a down payment, but you’ll need to purchase in a designated rural area and meet the area’s income limits.
Learn more: Types of home loans
First-time homebuyer programs in Alabama
Through the Alabama Housing Finance Authority (AHFA), there are several first-time homebuyer programs in Alabama, including:
- Step Up program: AHFA’s Step Up program provides 4 percent down payment assistance, up to $10,000, packaged as a conventional or FHA 30-year fixed-rate first mortgage along with a 10-year second mortgage. To qualify for, your income can’t exceed $159,200 and you’ll be required to complete a homebuyer education course. In addition, you must have a minimum credit score of 640 and a debt-to-income (DTI) ratio no higher than 45 percent.
- Affordable Income Subsidy Grant: AHFA’s Affordable Income Subsidy Grant helps with financing closing costs. To qualify for a 1 percent grant, your income must not exceed 50 percent of the area median income where you’re buying; for a half-percent grant, your income must not exceed 80 percent.
Learn more: Alabama first-time homebuyer loans and programs
How to find the best mortgage rate in Alabama
- Strengthen your credit score - Before looking for a lender and applying for a loan, review your credit history and take steps to improve your score, if needed.
- Determine your budget - Have a good understanding of how much house you can afford before you go shopping.
- Know your mortgage options - There are a few different types of mortgages.
- Compare rates and terms from several lenders - Rate-shop with at least three different lenders to get the best deal on rates, fees and terms.
- Get preapproved for a mortgage - Getting a mortgage preapproval is the only way to get accurate loan pricing for your specific situation. Plus, it will show seller’s you’re serious when you make an offer.
Lender compare
Compare mortgage lenders side by side
Mortgage rates and fees can vary widely across lenders. To help you find the right one for your needs, use this tool to compare lenders based on a variety of factors. Bankrate has reviewed and partners with these lenders, and the two lenders shown first have the highest combined Bankrate Score and customer ratings. You can use the drop downs to explore beyond these lenders and find the best option for you.
Garden State Home Loans
NMLS: 473163
|
State License: MB-473163
3.6
Bankrate scores are objectively determined by our editorial team. Our scoring formula weighs several factors consumers should consider when choosing financial products and services.
Homefinity
NMLS: 2289
|
State License: 4965
4.5
Bankrate scores are objectively determined by our editorial team. Our scoring formula weighs several factors consumers should consider when choosing financial products and services.
Additional Alabama mortgage resources
- Alabama loan limits by county: Learn the conforming loan limit for your city or town.
- Alabama mortgage lenders: Explore mortgage lenders in your state.
- Homeowners insurance in Alabama: Compare policies from a variety of providers.
Meet our Bankrate experts
Written by: Jeff Ostrowski, Principal Reporter, Mortgages
I cover mortgages and the housing market. Before joining Bankrate in 2020, I spent more than 20 years writing about real estate and the economy for the Palm Beach Post and the South Florida Business Journal. I’ve had a front-row seat for two housing booms and a housing bust. I’ve twice won gold awards from the National Association of Real Estate Editors, and since 2017 I’ve served on the nonprofit’s board of directors.
Edited by: Suzanne De Vita, Senior Editor, Home Lending
I’ve covered the housing market, mortgages and real estate for the past 12 years. At Bankrate, my areas of focus include first-time homebuyers and mortgage rate trends, and I’m especially interested in the housing needs of baby boomers. In the past, I’ve reported on market indicators like home sales and supply, as well as the real estate brokerage business. My work has been recognized by the National Association of Real Estate Editors.