Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. We may earn a commission from partner links on Newsweek, but commissions do not affect our editors’ opinions or evaluations.

Ally Mortgages Review 2024: This Lender May Be Your Homebuying Ally

John Egan

John is a freelance writer for Newsweek’s personal finance team. He has contributed personal finance articles to outlets such as Forbes Advisor, Investopedia, Bankrate, USA Today Blueprint, Capital One, Experian and NJ.com. John, based in Austin, Texas, is the author of The Stripped-Down Guide to Content Marketing.

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Reviewed By

Mariah Ackary

Mariah is a freelance contributor to Newsweek’s personal finance team. After putting herself through college, Mariah became interested in using personal finance to achieve financial freedom—whether that means paying down debt or using credit card points to take a dream vacation. She’s written and edited hundreds of articles about the topic and feels passionately about helping other millennial and Gen Z women live their best lives.

Her work has been featured in The New York Times, The TODAY Show, The Wall Street Journal, Business Insider and many more top media outlets.

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Promising quick loan approval and no lending fees, Ally is a consumer-friendly alternative for mortgage borrowers. However, Ally’s interest rates might not be the lowest you can find. And the lender offers no government-backed FHA, VA or USDA loans, which limits your mortgage options.

Our Methodology

Our research is designed to provide you with a comprehensive understanding of personal finance services and products that best suit your needs. To help you in the decision-making process, our expert contributors compare common preferences and potential pain points, such as affordability, accessibility, and credibility.

Ally

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Expert Take

For a homebuyer seeking a conventional mortgage loan — not an FHA, VA or USDA loan — Ally might be an appealing option. Money-conscious homebuyers may be drawn to Ally’s 15-, 20- or 30-year conventional mortgages, while buyers hunting for government-backed loans are out of luck.

Pros

No lending fees
Potential approval within 24 hours
Relatively short closing process (typically 10 days faster than the industry average)

Cons

Potentially higher interest rates than some competitors
No bank branches
No FHA, VA or USDA mortgages

Vault’s Viewpoint on Ally Home Mortgages

Despite the lack of government-backed mortgages, Ally shines when it comes to the absence of lending fees and the potentially speedy approval of mortgage applications. Mortgage lending fees typically account for 0.5% to 1% of the loan amount. Plus, Ally boasts that its mortgage closing period is typically 10 fewer days than the industry standard.

One drawback to making a home purchase with Ally is that it doesn’t offer the very lowest mortgage rates, although its rates are competitive. In addition, if you’re a fan of in-person customer service, Ally isn’t the best mortgage lender for you. The online bank doesn’t operate any branches.

About Ally Mortgages

Ally’s mortgage business is part of Charlotte, North Carolina-based Ally Financial, which is the largest all-digital bank in the nation. Measured by income, Ally’s home lending operation is smaller than its auto lending and corporate lending businesses. Nonetheless, it originated $1 billion in mortgage loans in 2023.

The table below highlights Ally’s mortgage offerings.

Minimum Credit Score	Typically 620 for a conventional loan 680 for a jumbo loan
Days to Close	28 to 42 days
Minimum Down Payment	3% for conventional loan backed by Fannie Mae’s HomeReady Mortgage program 5% for other conventional loans
Terms Offered	15, 20 or 30 years

Minimum Borrower Requirements

Before you get set on making a home purchase with Ally’s help, know that, like any mortgage lender, Ally has minimum requirements for borrowers.

One important requirement is a minimum credit score. Ally says it typically requires a minimum score of:

620 for a conventional loan
680 for a jumbo loan

Ally doesn’t offer certain types of mortgages, like FHA, VA or USDA loans.

The table below shows some of the other requirements for Ally mortgages.

Requirements for Ally mortgage borrowers

Debt-to-income ratio generally no higher than 36% for conventional loan

Verification of employment, income and credit

Documentation of debt

Evidence of assets like bank accounts and retirement accounts

Payment of closing costs (usually ranging from 2% to 5%)

Completion of home ownership education course for Fannie Mae’s HomeReady Mortgage program

Home appraisal

Purchase of private mortgage insurance until borrower reduces principal by 20%

How to Apply for an Ally Mortgage

To apply for an Ally mortgage, you’ll need to visit the lender’s website or call the lender at 855-256-2559 (9 a.m.-9 p.m. ET Monday-Friday, 10 a.m.-4 p.m. ET Saturday).

Because Ally is an online bank with no branches, you can’t apply for a mortgage in person.

Here are the documents and information that you’ll generally need to apply for a mortgage from Ally:

Proof of income, such as pay stubs, W-2 forms or 1099 forms
Two years worth of federal tax returns
Social Security number
Bank account statements
Retirement account statements
Brokerage account statements
Statements for monthly debts such as credit card bills, auto loans, personal loans and student loans
Proof of rent payments if you’re renting a place to live
Divorce decree if you’ve gotten a divorce
Verification of bankruptcy or foreclosure proceedings

How Does Ally Stack Up Against Its Competitors?

Of course, Ally isn’t the only option when you’re shopping for a mortgage. Here, we look at how Ally stacks up against two of its mortgage competitors, Rocket Mortgage and Wells Fargo.

Ally Mortgages vs. Rocket Mortgage

When comparing mortgage lenders, interest rates are a key consideration. As of April 2024, Rocket Mortgage’s interest rate for a 30-year, fixed-rate mortgage was slightly higher than Ally’s. On top of that, Rocket Mortgage charges lending fees, while Ally does not.

However, Rocket Mortgage beats Ally when it comes to certain mortgage types. While Ally doesn’t offer government-backed FHA, VA or USDA loans, Rocket Mortgage provides two of these (FHA and VA). In addition, you may qualify for a conventional mortgage at Rocket Mortgage with a lower minimum credit score (580) than at Ally (620).

Ally Mortgages vs. Wells Fargo

If you’re trying to save money on interest, Wells Fargo may be a better bet than Ally. As of April 2024, Wells Fargo’s interest rate for a 30-year, fixed-rate mortgage sat below Ally’s. Also, Wells Fargo bests Ally in terms of government-backed mortgages. Wells Fargo offers FHA and VA loans, while Ally provides neither.

But compared with Ally, Wells Fargo doesn’t have the best track record when it comes to handling mortgages. In 2022, the Consumer Financial Protection Bureau ordered Wells Fargo to pay $3.7 million for “widespread mismanagement” of mortgages, auto loans and bank accounts. Just one year earlier, the U.S. Office of the Comptroller of Currency slapped Wells Fargo with a $250 million penalty over “unsafe or unsound practices” in its mortgage business.

Another knock against Wells Fargo: The banking giant announced in 2023 that it was shrinking its mortgage business. One outcome of this decision is that Wells Fargo now focuses on extending mortgages only to customers who already have a relationship with the bank.

Frequently Asked Questions

Does Ally Use Better?

In 2019, Ally teamed up with Better.com to create a robust digital platform for mortgage lending. At the same time, Ally’s venture capital arm boosted its investment in Better.com. Ally says the Better.com platform enables preapproval of Ally mortgage applications in as little as three minutes.

Is Ally Bank at Risk of Failure?

There is no evidence that Ally is at risk of failure. Ally Bank is the country’s largest online-only bank, reporting assets totaling $196 billion as of December 2023. Deposits at Ally are insured by the Federal Deposit Insurance Corp. (FDIC) up to $250,000 per depositor for each category of account ownership.

What Is the Ally Bank Controversy?

In 2013, the Consumer Financial Protection Bureau and the U.S. Department of Justice ordered Ally Bank and its parent company, Ally Financial, to pay $80 million to tens of thousands of minority borrowers who were harmed by discriminatory pricing of auto loans. In addition, Ally was told to pay $18 million in financial penalties.

Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. We may earn a commission from partner links on Newsweek, but commissions do not affect our editors’ opinions or evaluations.