Ally Bank Mortgage Review 2023

How Bankrate scored Ally Bank

To create its Bankrate Score, Bankrate’s editorial team rated Ally Bank on a scale of one to five stars based on a variety of factors relating to the lender’s products and services. (Bankrate’s partners compensate us, but our opinions are our own, and partner relationships do not influence our reviews.). We derived its overall score by considering three basic factors.

• Affordability: Ally Bank’s mortgage rates aren’t as competitive compared to those of some other lenders, but it doesn’t charge loan fees.
• Availability: Qualified borrowers in all states can get a mortgage through Ally Bank. You won’t be able to get a government-insured loan here, however.
• Borrower experience: Some customers have shared less-than-stellar feedback about the bank online, but the complaints aren’t typically tied to mortgages, but rather banking services or auto loans.

• Methodology

  Bankrate's expert editorial team collects lender information through a variety of methods. We contact lenders directly, and we also turn to regulatory filings and to assessments by third parties. Our research takes into account three main factors – affordability, availability and borrower experience.

  Bankrate's reporters and editors have decades of experience covering the mortgage industry. They're skilled at gathering information through interviews and by scouring regulatory filings. Bankrate evaluates more than 85 lenders for factors relating to affordability, availability and customer experience, assigning each a Bankrate Score out of five stars. Here's how we assess each of the categories:

  • Affordability. Loan cost is a deciding factor for many borrowers. We look at two metrics: 1) a lender's lowest advertised annual percentage rate (APR) based on Bankrate's sample scenario, which assumes a 740 or higher credit score and a 20 percent down payment, among other factors and 2) established-customer discounts or incentive pricing, when applicable.
  • Availability. Another factor is how quickly your loan application will be approved, and how many loan programs the lender offers. So we evaluate approval and closing timelines and diversity of loan products.
  • Customer experience. Finally, we delve into what it's like to deal with the lender as a consumer. We look at the lender's application process and availability of customer service support. We also consider the results of J.D. Power's 2022 Mortgage Origination Satisfaction Survey.

  Bankrate's editorial team confirms the accuracy of data at the time of publication. Our team is dedicated to maintaining the timeliness of information – the mortgage industry is changing constantly, so we regularly revisit these reviews to update them.

  Bankrate's methodology page spells out our rating process in greater detail.

Affordability: 5/5

Loan cost is a deciding factor for many borrowers. The affordability nature of loans differ from lender to lender, so comparing costs is key. Ally Bank doesn’t charge lender fees, and it posts detailed rate information on its website, often updated throughout the day. The bank’s mortgage rates are right in line with Bankrate’s averages, so shop around — you might find you get a better deal elsewhere.

Availability: 5/5

Availability factors can make the overall mortgage-application process smoother or more challenging. Ally Bank only offers conventional loans, both conforming and non-conforming if you’re buying a higher-priced property. It doesn’t offer FHA, VA or USDA loans, which might be  limiting for some borrowers. The bank is licensed to lend mortgages in all states, but be sure to confirm it’s available in your area before you start the process for a preapproval.

Borrower experience: 4.5/5

Ally Bank has an A grade from the Better Business Bureau, but isn’t accredited by the organization, and its Trustpilot rating is “Bad” based on several hundred complaints (at the time of this review). However, its JD Power score is near the top of the pack of large loan originators. The bank doesn’t have brick-and-mortar locations, so if you’re looking to get a mortgage, you’ll do so online. The bank offers tips and educational articles about the mortgage-lending process on its website, and if you have the Ally Bank app, you can access your home loan easily on your phone. If you have questions about a mortgage, you can call the bank at 888-925-2559, Monday through Friday from 9 a.m. to 9 p.m. ET or Saturday, 10 a.m. to 4 p.m. ET.

How to apply for a mortgage with Ally Bank

You can apply for a purchase loan or a refinance on Ally’s website. The company’s process is similar to other online lenders. Here are some tips for streamlining the process:

Check your credit report. It’s important to check your credit report before your lender does, in case there are errors that could impact not only whether you get preapproved but also your ability to get the best mortgage rate. Knowing your credit score also helps you decide what type of loan to apply for. If your score is in the very low 600s, for instance, an FHA mortgage might be best for you, as its standards are more lenient than those for conventional loans.

Gather personal and financial documents. With any lender, you must supply documentation proving your income, assets and debts. These documents typically include:

• Pay stubs from at least the past 30 days
• W-2s from the past two years
• Proof of any other income sources (such as bonuses or commissions, child support or rental revenue)
• Account statements, including checking, CDs and retirement savings, from at least the past two months
• Documents detailing any loans you currently have
• Letters explaining any new loans you’ve taken out recently
• Letters from anyone giving you a gift to use for a down payment
• Explanation (signed and dated) of any deposits over $1,000 other than normal pay into accounts.
• Court records if you’re recently divorced or dealt with something like bankruptcy or foreclosure
• Contact info for your landlords if the lender wants to verify payment
• ID (such as a driver’s license or passport), so lenders can verify your identity and that you’re a U.S. citizen. Foreign nationals can get financing, but it’s much more complicated.

Those who are self-employed might also need to include additional information and undergo an income audit. This might include asking an accountant to verify your income is stable by speaking with customers; reviewing business records, like P&L statements; or taking other steps.

Provide details about the property. If it’s a purchase mortgage, you’ll need to supply the address of the home you’re buying and submit to an appraisal. If you’re refinancing, you may or may not need an appraisal.

Refinancing with Ally Bank

This lender refinances existing mortgages, and its refi process is similar to the purchase process. Before you start, think about your goals. Are you refinancing to adjust your current mortgage’s rate and term? Do you want to tap into home equity? Do you want to change loan programs, such as refinancing out of an FHA loan into a conventional mortgage? Once you’ve settled on those details, you can apply through the lender’s website.

Frequently asked questions about Ally Home Loans

What is Ally’s partnership with Better Mortgage?

Ally's fast preapprovals and rate locks are powered by its partnership with Better.com, a digital mortgage company. In 2019, Ally said it would turn to Ally to create “a new end-to-end digital experience for consumers looking for a mortgage loan from Ally.