Ally Bank mortgage review: Speedy preapproval process and no lender fees

As an online-only bank, Ally Bank touts the speediness of its mortgage process: Borrowers can get preapproved in as little as three minutes and lock in their rate within 24 hours. Ally customers also close in an average of 35 days, a week less than the national average.

Unlike many lenders, Ally doesn't charge lender fees. But its rates are somewhat higher than the competition, which could swallow up any savings.

Ally doesn't issue VA, USDA or FHA loans, but if you have a small down payment, the Fannie Mae-backed HomeReady loan allows qualified lower-income borrowers to put down as little as 3%. 

• Loan types
• Rates and fees
• Refinancing
• Customer service
• Customer satisfaction
• Online experience
• How to apply for an Ally Bank loan
• How does Ally Bank compare?
• FAQs
• Bottom line

Ally issues mortgages in all 50 states and Washington, D.C, but it does not offer government-backed loans.

• Fixed-rate mortgages: With a fixed-rate mortgage, borrowers have the same rate for the duration of the loan term. Ally offers fixed-rate mortgages with terms of 15 years, 20 years and 30 years
• Adjustable-rate mortgages: ARMs start with a fixed rate and then become adjustable after a set amount of time. Ally customers can choose between a 5/6 ARM (fixed rate for five years and a variable rate every six months thereafter), 7/6 ARM (fixed rate for seven years and a variable rate every six months thereafter) or a 10/6 ARM (fixed rate for 10 years, variable every six months thereafter).
• HomeReady loan: Borrowers who make no more than 80% of the area median income, have a 620 credit score and a debt-to-income ratio of no more than 50% can put as little as 3% down. 
• Jumbo mortgage: Jumbo loans exceed the borrowing limits set by the Federal Housing Finance Agency. Ally offers jumbo loans for up to $4 million: Ally offers jumbo loans of up to $4 million: Borrowers need a 680 credit score, a debt-to-income ratio of no more than 40% and at least 20% down.

Ally offers a $5,000 home grant that can be put toward a down payment, closing costs or other fees for select properties in Philadelphia, Detroit, and Charlotte, North Carolina. Borrowers must make no more than 100% of the median income in the area where the property is located.

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• Lender fees: Ally does not charge lender fees on home loans
• Prepayment penalty: Ally does not charge prepayment penalties on home loans. 
• Rate lock fees: Ally will save your rate for up to 45 days for no fee. Applicants may be charged to extend their lock, however.
• Good faith deposit: Ally does not require a good faith deposit on home loans. 

Ally offers cash-out and rate-and-term refinancing, which doesn't tap into your home equity. It does offer home equity lines of credit.

• Credit score. You'll need a 620 to refinance a conventional loan with Ally, and a 680 for a jumbo loan.
• Debt-to-income ratio. Ally Bank requires borrowers to have a debt-to-income (DTI) ratio of no more than 45% or prove they have six months in savings. Ally's jumbo loans require a DTI of no greater than 49.99%.
• Home equity. Ally requires 3% equity to refinance at a lower rate or different terms and at least 20% for a cash-out refinance. For jumbo loans, homeowners need 20% for a rate-and-term refinance and at least 15% to get a cash-out refinance. 
• Home appraisal. An appraisal is generally necessary for most refinance applications, but applicants with conventional loans can receive a waiver. 

Ally doesn't have physical branches but says borrowers can apply online in as little as 15 minutes and get preapproved in 3 minutes.

New applicants can speak to a customer service representative by calling 855-256-2559, Monday through Friday from 9 a.m. to 9 p.m. ET and Saturday from 10 a.m. to 4 p.m. Existing customers can call 1-866-401-4742, Monday through Friday from 8:30 a.m. to 8 p.m. ET.

Ally received a 731 out of 1,000 on J.D. Power's 2022 U.S. Mortgage Origination Satisfaction Study, compared to an industry average of 716. It was not rated by the agency in 2023.

Ally received an A- rating from the Better Business Bureau.

Ally lists current mortgage rates on its website and includes easy-to-find information about the application process. There's also a mortgage affordability calculator, quizzes and a first-time homebuyer guide. 

Customers can get preapproved online within three minutes and upload and sign documents on the site, as well. There is a chat feature but it's only available for existing customers, not visitors with questions. 

You can apply for an Ally mortgage online or over the phone at 855-256-2559.

Before you apply, check your credit report and gather your financial documents.

Here's how Ally Bank's mortgage offerings compare to two major competitors.

Ally Bank vs. Rocket Mortgage

While Rocket Mortgage charges lender fees, which can equal up to 2% of the loan amount, its rates on a 30-year fixed mortgage are lower than Ally's. Rocket also issues FHA, USDA and VA loans, which Ally doesn't. 

Like Ally's HomeReady loan, Rocket's Rocket ONE+ mortgage is aimed at lower-income buyers who make 80% of the area median income. But it allows borrowers to put just 1% down, compared to 3% with Ally. It also comes with a down payment grant of up to 2% of the cost of the house and, unlike HomeReady, has no private mortgage insurance requirement. There is a $350,000 cap on a Rocket ONE+ mortgage, however.

Ally Bank vs. Wells Fargo

Wells Fargo's mortgage rates are more competitive than Ally's, and it has physical branches for customers who prefer an in-person experience. It does charge lenders fees, however, and has a higher credit score requirement for jumbo loans.

Wells Fargo's Dream. Plan. Home. loan is comparable to the HomeReady loan, allowing borrowers who earn 80% of the median income in their area to make a 3% down payment.

Ally has a $5,000 home grant that can be put toward a down payment, closing costs or other fees but it's only available in Philadelphia, Detroit, and Charlotte, North Carolina and only for borrowers who make 100% of the area median income. Wells Fargo's $10,000 down payment grant is twice as big, available in twice as many cities and to borrowers earning up to 120% of the median income.

Wells Fargo also has a $5,000 closing cost credit available for homebuyers in 18 states.

Ally's quick preapproval process and shorter closing time should appeal to borrowers who want to move quickly. But while it doesn't charge lender fees, its mortgage rates are on the higher side and it doesn't offer FHA, VA or USDA loans.

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