Customers who still go to other institutions because they’re blissfully unaware that Ally Bank now offers this product are excused. The mortgage division was only introduced a few short months ago and the discovery of this product is a surprise even to us. Ally Bank is notorious for keeping things simple and with Ally Bank Mortgages, we expect no different. The division that takes care of the processing, is the Ally Bank Equal Housing Lender. This review takes a look at the new addition to the Ally Bank family tree. It measures it against some of the best mortgage products across the globe.
One of the best ratings given on a mortgage review was to Credit Agricole.
Ally Bank History
Ally Bank has a rich history that surprisingly did not start the same as many traditional banks which were take in deposits. In 1919 when it opened doors to the public, the bank was known as the finance wing of GM and went by the name GMAC. This division provided the general public with an integral service at the time, as funds were low due to the first World War and then in the next few years, the Great Depression.
During WWII, GM and GMAC were responsible for the provision of parts for the war machines and also to provide finance to the railroads back home. After the war, the focus was to improve the economic situation back home.
Throughout the decades that followed, the bank was tasked to provide their customers with a more holistic approach to products. A few new products made their way to the Ally Bank portfolio. In the 2000s, after the economic fallout, the bank decided to regroup and rebrand.
Today, the bank is known as one of the most successful online institutions and has a revolutionary product to its credit, the Online Savings. The bank is also instrumental in the cashless society movement.
The full review on Ally Bank is also available.
Important Things to Know About Mortgages
A few decades ago, it was compulsory for new homeowners to go for classes before they were approved finance. The classes included the legal implications of signing for a home loan and also the importance of money management. Budgeting was at the forefront of every financial decision and once potential homeowners finished these classes they were off to the estate agents, certificate in tow. Nowadays, the onus is on the customers to do their research before applying for finance.
Know Your Comfortable Instalment Limits
The rule of thumb is that a home loan installment shouldn’t be more than a third of take-home pay. That being said, it should also be in conjunction with other expenses and obligations. Consumers should never be left without disposable income once all their bills are paid, in order for them to afford emergency expenses as they arise.
Pay Instalments On Time
One of the fastest ways consumers find themselves in financial trouble is when they start paying bills late or not at all. Once an installment is missed or late, the consumer will always feel like they’re one step behind.
Ally Bank Mortgages Product Offerings
New Loan Option
Customers who wish to have access to a loan option that provides them with a variety of options, then this is an ideal choice. Furthermore, customers enjoy competitive interest rates.
- This loan type provides customers with access to special rate offers from time to time.
- Customers choose to receive their communication via phone or email.
- Furthermore, there is also the option to have online access to manage all their loan-related documents. This includes access from all devices.
- Also, customers have access to loan experts to help them from the start of the application to close.
- Customers enjoy regular updates and the goal is to meet the closing date.
- The entire process usually takes between 2-3 weeks.
- Fixed rate mortgage options include 10, 15, 20, 25, and 30-year options.
- There is also the option to go with an adjustable rate mortgage of 5/1, 7/1, and 10/1.
- Finally, customers have access to various calculators during and after the application period.
These loans are higher than the normal limits set in the various states. These loans offer slightly different conditions and the risk to the bank is also slightly elevated. Customers can expect to put down a down payment of at least 20%.
Customers who already have a loan and need to take up a better offer can apply for a refinance loan.
- There is the potential for customers to lower their monthly payments.
- Also, refinance allows customers to a fixed rate from a variable or the other way around.
- The loan option provides the opportunity to lower the term, which means customers have the opportunity to pay off your loan faster.
- Furthermore, customers who happen to have equity in their homes have the opportunity to take out cash for whatever reason they choose to.
- Finally, customers have access to loan specialists to help them through every step of the process.
What We Like About Ally Bank Mortgages
Like many of the other products offered by Ally Bank, the mortgage range is simple and to the point. Surprisingly for a bank that offers such incredible interest on their savings, it’s easy to assume that the interest rates on their credit products will be through the roof. This is not the case with these loans as the rates are still quite competitive.
There are two loan options that provide customers with ample opportunity to get the loan they need. The first is the regular loan where customers can choose the property within the finance period of their choice. The also have the option to go with fixed or variable options. For those who already have a mortgage, there is the choice to refinance the loan.
Customers have a number of choices when it comes to the variable rate terms and the fixed rate terms. There is also a long finance period of up to 30 years, which can bring the installments down substantially.
Furthermore, customers have the option to choose their mode of communication. They also have an online application that allows customers access to their mortgage documents on the go.
Finally, customers are not required to know everything about the finance before they start their application, as there is a team of specialists to take care of them throughout the entire process.
Ally Bank also has some great vehicle finance options and we recently did a review.
What We Don’t Like About Ally Bank Mortgages
We are aware that the bank offers simple options throughout their product range, however, a bit more variety will really open the playing field. Customers who wish to take on finance for an investment property may need to apply for finance at another institution. The sad truth is that this may not be the case, but it’s also not clearly communicated whether the option is available at Ally Bank.
Furthermore, the bank also doesn’t clearly state that it would finance building loans and what the options are if they do. This makes the loan options a little one dimensional and may cost the bank a few customers.
The only information we have on the down payment is that there is a 20% example. It is unclear whether all customers are required to put this down or whether it is purely for illustrative reasons.
Finally, the loan options on the variable side don’t have a straightforward variable option. Customers have to choose the 5/1, 7/1, or 10/1 option.
Critical Reviews Rating Ally Bank Mortgages – 7 of 10
Although this is not the Rolls-Royce of mortgage options across all the banks we’ve reviewed so far, these options are still fairly new and based on the Ally Bank customer base. With that in mind, we applaud the bank for its initiative to include this as part of their product range, which will allow them to secure a larger customer base in future.
The loan rates are very competitive and Ally Bank competes with leaders in the industry such as Wells Fargo. This allows them to command a bigger piece of the pie which will allow them to see further growth in the future. The refinance option is also ideal for those who wish to change the structure of their finance for whatever reason or even gain access to cash in their bond. This option is available to those who have equity in it.
We can’t help but feel a little concerned that the lack of variety will bite the bank in the future. This is because customers want to know that they have the option to expand their asset base. If the option is restricted to a built structure or a first property, the bank might lose out on future deals. Although there is no explicit information that these loans are not available, the bank also doesn’t make an effort to advertise it. With the pros and cons weighed up, we’re comfortable to give the bank this rating. It is a marvelous product, however, there is room for improvement on the range as a whole.
We also did a review on the mortgage options offered by Bank of America.