Alabama Mortgage and Refinance Rates
As of Tuesday, June 22, 2021, current rates in Alabama are 3.20% for a 30-year fixed, 2.47% for a 15-year fixed, and 3.49% for a 5/1 adjustable-rate mortgage (ARM).
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Alabama mortgage overview
Median home values in Alabama are among the lowest compared to the national median, which helps potential first-time homebuyers who are ready to stop renting and purchase a home.
The Alabama Housing Finance Authority (AHFA) works with lenders to offer mortgages with lower fees and affordable interest rates. The state offers many first-time homebuyer programs that provide down payment or closing cost assistance, and also provides programs for current homeowners who are seeking to purchase another home in a different part of town, or buy a larger one.
First-time homebuyer programs in Alabama
Through the AHFA, there are several first-time homebuyer programs in Alabama.
Step Up program
The Step Up program provides 3 percent down payment assistance, secured by a 30-year fixed-rate first mortgage along with a 10-year second mortgage. The loans are serviced by ServiSolutions, a division of AHFA, which means homeowners only have to make one payment each month. To qualify for the down payment assistance program, borrowers are required to complete a homebuyer education course.
In addition, borrowers can purchase either a new or existing home in the state, but must have a minimum credit score of 640 and a debt-to-income ratio of 45 percent or lower.
For an FHA Step Up mortgage, the program is limited to those who have incomes of $97,300 or less, regardless of the size of the household.
For a Conventional Step Up mortgage (also known as HFA Advantage), those who earn 80 percent or less of the Area Median Income or $97,300, whichever is less, can qualify.
Affordable Income Subsidy Grant
The Affordable Income Subsidy Grant helps with financing closing costs, in addition to the down payment assistance through Step Up. Borrowers are eligible if their annual income is not over 8 percent of the Area Median Income or $97,300, whichever is less.
Borrowers can purchase either a new home or existing home, but must have a minimum credit score of 640 and a debt-to-income ratio of 45 percent or lower.
Alabama mortgage refinancing
With interest rates at record lows, Alabama borrowers may be interested in refinancing their mortgage into a new one with a lower rate. Use Bankrate’s mortgage refinance calculator to see how much you can save by lowering your rate.