Ally Bank Mortgage Review 2019


Ally Bank Mortgage Review 2019 <

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Ally was among the first banks to conduct all their operations for both savings and lending, online.  However, they maintain the human touch in their interactions with those seeking to do business with them.  Rather than let customers struggle with completing the multi-page standard application, the borrower gives minimal basic information online and then requests a call from an Ally loan officer.  The officer completes the application by phone.

From the moment of that first call, the customer is assigned to a team that will guide them through the process, from origination through closing.  Taking a page from baseball, your team is called the “Ally Home Team” and the team of three assigned to you will be your point of contact from the beginning through the closing of your loan.

Ally offers a price match.  If you find better pricing at another lender, let them know. You have to send a complete Loan Estimate from the competing lender when you’re ready to lock in your rate. Ally will match their rate and points as long as it is for the same loan terms offered and dated within the past 5 business days.  This ensures that you will get a competitive rate.

Pros

  • Responsive customer service
  • Easy, quick process
  • State of the art technology
  • Custom made calculators section
  • Price match plan

Cons

  • Typically, don’t offer loans bad credit / unusual situations
  • No government loans (FHA, VA, USDA)
  • Lack of professionalism (customer service)

Ally Bank – a Brief History

Ally Bank began life as GMAC in 1919 , as a division of General motors.  During the 1920s through the 1970s, the company evolved and in the 1980s and 1990s, the company expanded into home mortgages.  In the 2000’s, GMAC Bank was formed and in 2009, it was transformed into Ally Bank, at which point, they adopted the streamlined lending processes it uses today.

How Does Ally Mortgage Work?

Ally Bank has been a strictly online lender since its inception in 2009.  It is a subsidiary of Ally Financial, located in Detroit, Michigan.  The bank itself is located in Sandy, Utah.  Its head office is its only branch.  The internet has made it possible for Ally Bank to conduct its savings and lending operations online, which allows for efficiencies that brick and mortar banks don’t enjoy.

Why is this important?

Because the savings that result from these efficiencies pass through to the consumer, in the form of lower interest rates for borrowers and higher interest rates for savers.

Ally’s Mortgage Products, Fees, and Conditions

Ally’s product line-up is standard – they do not try to be all things to all people, which improves their efficiency.  They are a conventional lender that funds conforming, agency (Fannie Mae and Freddie Mac) loans, as well as non-conforming (Jumbo) conventional loans, which are for loan amounts that exceed the conforming loan limits.

For all states, the maximum “true” conforming loan is $453,100.  In high-cost states, the maximum “high balance” conforming loan can reach $679,650.  This maximum varies from state-to-state and county-to-county. When a loan exceeds the high balance limit for the county in which the property is located, it is known as a non-conforming, or “jumbo” loan and the rules for qualifying are different than for conforming loans.  These options define Ally’s lending activity.

In practice, all of Ally’s loans work in the same way – you will choose between a conventional conforming or non-conforming loan (Jumbo), based on your purchase price.

Ally participates in Fannie Mae’s HomeReady program for first-time buyers.  Recognizing that many borrowers have sufficient income to qualify, but lack adequate down payment, Fannie Mae and Freddie Mac recently rolled out a lower down payment version of their programs, allowing for 3% (if true conforming) or 5% (if high-balance conforming) down.  The qualifying has become more flexible and the mortgage insurance cost reduced, as well.

Ally’s Mortgage Process

The application process is online and the website is “plain English” and easy to understand.  A prospective borrower can go step-by-step through several preliminary questions and use one or more of several calculators, including a home affordability calculator, a payment calculator and a refinance calculator.  There are also savings calculator that can show consumers how to reach their homeownership, retirement and other goals.

Once the prospective borrower has completed and reviewed the preliminary information, the process is simple and the site is organized so that the borrower can step from one stage through the next.  The five steps are:

1.    Get PreQualified

This shows the seller that you are serious.  The minimum of pre-qualification is required in nearly all real estate markets in the US.  Pre-qualification is where you provide the basic information about your income, down payment to your Ally Home Team.

They obtain your credit report and issue a letter that says that, based on the information provided, your loan will be approved, according to the guidelines.  This letter is provided to you and can be presented to the seller so that they feel comfortable that they can accept your offer.  Accepting your offer means the seller will hold any further marketing efforts until you close.

In the most active housing markets, where supply is a concern, the seller may require a “pre-approval”, in which you have submitted a complete file and an underwriter has approved it, subject to the title work and appraisal of the home.

2.   Submit Documents

This stage is self-explanatory.  There is a list of documentation that every borrower must provide to the lender, to prove creditworthiness.  A short list (for a first-time, salaried buyer with good credit) would include copies of paystubs, W-2 forms, bank statements and possibly two years’ tax returns.  For more complex situations, more documentation is required.

3.   Underwriting

This is the process where, when all the documentation has been submitted, an underwriter reviews and verifies the information contained in the documentation, checks the loan against all guidelines and issues a loan approval.

In a well-documented file, the approval will be subject only to the documentation that would be needed to fund the loan.

4.   Closing Day

The closing occurs when all the conditions have been satisfied, you have signed the closing papers, transmitted the down payment and closing costs and the transaction was recorded.

Congratulations!

5.   After you Close

Within the first 30 days of closing, you will receive a number of documents – your official closing statement, the original deed that evidences that you are the owner, title insurance or warranty, correspondence from Ally about where to make the payments and many offers to sell you things!

At each step, Ally tells you what your responsibilities are and what Ally’s responsibilities are.

Each loan is assigned to a dedicated team of three representatives – a licensed loan specialist and two processors.  The loan specialist takes the information, completing the application that you begin online.  The processors interface with the borrower to complete the documentation required for the file and have it approved.  Regular communications are promised and according to the reviews that can be found, the promise is honored by the team.

Ally’s Mortgage Pros & Cons

Ally enjoys a good reputation, as evidenced by many positive comments that their customers leave on various ratings sites, such as Zillow, Trulia and Bankrate.com.  Every consumer comment, whether positive or negative, receives a response from a Customer Service representative at Ally.   The comments are, by far, positive, across these sites, by a factor of more than three to one.

Advantages

  • The calculators for determining what you can afford, what your payment will be.
  • The site is easy to navigate and you have easy online access throughout the process.
  • You can access your account from any device.
  • Customer Service is very responsive.
  • The process is easy, if you have good credit, sufficient income and good credit.
  • You can also refinance your home with Ally. There is a refinance calculator to help you determine whether the savings justify the cost.
  • Ally’s process marries high tech with high touch by involving you with their responsive staff, while providing state of the art technology.
  • Ally’s price match guarantee is great for peace of mind – they will match any rate you find for the same type of loan within the previous five days (subject to other conditions). Few lenders offer this feature.

Disadvantages

  • Ally is not a “one size fits all” lender. They do not offer loans for those with bad credit, unusual situations, such as using one year of tax returns for self-employed borrowers, etc.
  • There are no government loans (FHA, VA, USDA), which would allow very low or no down payments and some less-than-perfect credit.
  • While you will always communicate with an “Ally Home Team” member, only the team leader, a licensed loan officer, is actually an Ally employee.
  • Processing and other clerical functions are outsourced to third-party vendors. There is nothing wrong with this – it is common in the industry.  However, if there is seamlessness in the process, this is where it will occur.

In Summary…

If you are a technically capable person, with good credit, stable income and cash saved for a down payment and closing costs, Ally is a great fit for you.  The company makes it easy to manage your experience in the online format, but also provides real people with whom you can connect regularly and who will help you manage the process if there are issues.

However, if you have any issues that would make qualifying for a standard conventional loan challenging, another lender would be your cup of tea.