Alabama Mortgage and Refinance Rates
On Tuesday, June 06, 2023, the national average 30-year fixed mortgage APR is 7.05%. The national average 30-year fixed refinance APR is 7.13%, according to Bankrate's latest survey of the nation's largest mortgage lenders.
Bankrate has offers for Alabama mortgage and refinance loans from top partners that are well below the national average. Compare, apply, and start saving today.
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About our Mortgage Rate Tables: The above mortgage loan information is provided to, or obtained by, Bankrate. Some lenders provide their mortgage loan terms to Bankrate for advertising purposes and Bankrate receives compensation from those advertisers (our "Advertisers"). Other lenders' terms are gathered by Bankrate through its own research of available mortgage loan terms and that information is displayed in our rate table for applicable criteria. In the above table, an Advertiser listing can be identified and distinguished from other listings because it includes a "Next" button that can be used to click-through to the Advertiser's own website or a phone number for the Advertiser.
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Loan Terms for Bankrate.com Customers: Advertisers may have different loan terms on their own website from those advertised through Bankrate.com. To receive the Bankrate.com rate, you must identify yourself to the Advertiser as a Bankrate.com customer. This will typically be done by phone so you should look for the Advertisers phone number when you click-through to their website. In addition, credit unions may require membership.
Loans Above $726,200 May Have Different Loan Terms: If you are seeking a loan for more than $726,200, lenders in certain locations may be able to provide terms that are different from those shown in the table above. You should confirm your terms with the lender for your requested loan amount.
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Current mortgage rates in Alabama
As of Tuesday, June 6, 2023, current interest rates in Alabama are 7.01% for a 30-year fixed mortgage and 6.32% for a 15-year fixed mortgage.
While mortgage rates have leveled off some since jumping in 2022, today’s higher rate environment still makes housing affordability a challenge for Alabama homebuyers, and refinances less desirable for homeowners. While mortgage rates are difficult to predict, many housing economists expect them to remain well above their historical lows for the foreseeable future.
Refinance rates in Alabama
Alabama borrowers who saw their home equity rise during the pandemic might be interested in refinancing their mortgage as a way to tap those funds. Check out Bankrate’s guide to cash-out refinancing to learn more.
How to find the best mortgage rate in Alabama for you
When shopping for a mortgage, compare at least three loan offers — research shows this exercise can save you thousands of dollars over the life of a loan.
Bankrate can help you find the best mortgage deal. Here are some basic steps to securing a loan on favorable terms:
Step 1: Strengthen your credit score
Step 2: Determine your budget
Step 3: Know your mortgage options
Step 4: Compare rates and terms from several lenders
Step 5: Get preapproved for a mortgage
Mortgage options in Alabama
If you’re looking to get a mortgage in Alabama, there are several options:
- 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. If you make 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 backed 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 starts at 2.15 percent for homebuyers.
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, secured by a conventional or FHA 30-year fixed-rate first mortgage along with a 10-year second mortgage. To qualify for the assistance program, your income can’t exceed $130,600 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, in addition to the down payment assistance through Step Up. To qualify for a 1 percent grant, your income must not exceed 50 percent of the area median income; for a half-percent grant, your income must not exceed 80 percent.