A diverse state complete with Southern charm, Alabama is a great place to call home. Whether you’re buying a home or refinancing your current abode, you want to work with a top-notch lender. Here’s our guide to the best Alabama mortgage lenders.
Best Mortgage Lenders in Alabama Right Now:
- Best for First Time Home Buyers: Regions
- Best for Self Employed Professionals: Luxury Mortgage
- Best Online Lender: Better.com
- Best for FHA Loans in Alabama: Quicken Loans®
- Best for VA Loans: Veterans United
The 5 Best Mortgage Companies in Alabama
Here are Benzinga’s picks for the best mortgage lenders in Alabama. We’re confident this list can help you choose the best lender for you.
1. Best for First Time Home Buyers: Regions
Headquartered in Birmingham, Regions has almost 200 branches located throughout Alabama. This makes it easy for first-time home buyers to get in-person assistance.
Regions offers home loans designed for first-time buyers. It also offers conventional, FHA and VA mortgages. It’s also an approved lender with Alabama’s home-buyer programs, which provide down payment assistance to qualified borrowers.
2. Best for Self Employed Professionals: Luxury Mortgage
Self-employed professionals sometimes have a tough time qualifying for a mortgage. Tax returns don’t always reflect their income due to business deductions and their income may be erratic. Luxury Mortgage understands that and offers a product for these professionals.
Luxury Mortgage’s bank statement qualifier home loan allows you to qualify based on the deposits you’ve received in your personal or business accounts. You can borrow up to 80% of the property value and you may qualify with a credit score of 580 or higher. Luxury Mortgage also offers FHA, conventional, jumbo and asset qualifier mortgages.
3. Best Online Lender: Better.com
A lot of lenders offer all or part of their mortgage process online.
What sets Better.com apart for Alabama residents is that it uses technology to improve the mortgage process.
You can get a loan estimate in minutes. Just follow every step of the mortgage process.
Better.com doesn’t charge any lender fees and offers fixed- and adjustable-rate conventional loans and jumbo loans.
4. Best for FHA Loans in Alabama: Quicken Loans®
Quicken Loans makes it easy to get an FHA loan from the comfort of your home. You can start the process by phone, chat or by using Rocket Mortgage® by Quicken Loans®, its online platform.
Loan experts will work with you to help you decide whether an FHA loan is right for you. If it is, you’ll receive award-winning customer support every step of the way. Quicken Loans also offers conventional, VA, jumbo and proprietary products. It also offers FHA refinances.
5. Best for VA Loans: Veterans United
Veterans United has been the top VA lender for 2 years running. It works closely with advisors from every branch of the military to ensure it provides excellent service to veterans and service members. Its representatives are available around the clock to assist you no matter where you’re stationed.
Veterans United offers VA purchase loans as well as VA loan refinances. It has stellar reviews from almost 200,000 homeowners who praise the expertise and the easy loan process they experienced with Veterans United.
Choosing the right mortgage can be a challenge. Let’s take a look at how mortgages are structured so you can make an informed decision about what’s best for you.
Mortgage types refer to whether a federal agency directly oversees your mortgage. Here are the most common types of mortgages.
- Conventional mortgages aren’t insured by a government agency. These loans may require a higher credit score than government-backed mortgages, but the requirements vary by lender.
- FHA loans are backed by the Federal Housing Administration and have low credit score requirements and a minimum down payment of 3.5%.
- VA loans are backed by the Department of Veterans Affairs and offers a loan program for current service members, veterans and some surviving spouses. VA loans typically don’t require a down payment and they have flexible credit requirements.
Your mortgage term refers to how your home loan is structured. Here are a few options you might see.
- 30-year fixed–rate mortgages are loans that lenders schedule your payments over 30 years, which means you have lower monthly payments than you would with a shorter mortgage term. The lender also offers a fixed interest rate, which means that the rate never changes. That means your monthly loan payments also won’t change.
- 15-year fixed-rate mortgages mean that your payments are designed to end after 15 years. This means you have higher monthly payments but you have the potential to own your home sooner. Your interest rate and monthly payments stay the same as long as you have that mortgage.
- 5/1 ARMs are a type of adjustable-rate mortgage. With this type of mortgage, the lender can change your interest rate. This means your monthly payment can also change. Most ARMs have a low introductory interest rate, which is why borrowers sometimes choose this type of mortgage. A 5/1 ARM has a fixed introductory rate for the first 5 years. After that, the lender can adjust the rate once per year.
Which Mortgage Lender is Best for You?
Which Alabama lender is best for you? Here are a few factors to consider.
- Availability: Do you want a loan officer you can meet with in person? Or would you rather handle everything via phone, email or chat? Look for a lender that’s available in a way that works for you.
- Service: Are lender representatives knowledgeable and professional? Do you feel valued? Does the lender respond promptly to your questions? Look for a lender that provides excellent service.
- Expertise: Is the lender experienced with the type of mortgage you need? For example, government-backed mortgages require extensive documentation. If a lender doesn’t handle these mortgages regularly, the process could take longer than it needs to. Look for a lender that regularly handles the type of mortgage you prefer.
Lender Credit Score Minimums in Alabama
Lenders use your credit history to decide whether to offer you a home loan and what rate to offer you. Your credit score provides a snapshot of your credit history. To qualify for a home loan, you need to have the minimum credit score required by your lender. Here are the minimums for several Alabama lenders.
|Lender||Minimum Credit Score Required|
Current Mortgage Rates in Alabama
Lenders change interest rates frequently. Sometimes they change them every day. Lenders change rates to reflect what’s happening in the world around us. If the economy is booming, mortgage rates will be higher. If the economy isn’t doing as well, lenders lower interest rates to encourage people to borrow money.
Here are the current rates for mortgages in Alabama.
|7/1 ARM (adjustable rate)||0%||0%|
|5/1 ARM (adjustable rate)||3%||3.117%|
Average Days to Close on a Loan
Mortgages take some time to process. The time from when you start the application to when you sign on the dotted line is called the closing process. You’ll need to schedule a home inspection and respond to requests for information from your lender.
After reviewing all your information, your lender will let you know whether you’ve been approved for the loan. The next step is scheduling your closing. This is a meeting where you sign your required documents and pay any funds that are due. You’ll receive your loan documents a few days before your meeting — review those documents carefully. Make sure you understand everything and ask questions.
Here’s how long it takes several Alabama lenders to close.
Which Lender is Right for You?
Choosing a mortgage is a tough decision. The right option depends on your financial situation, whether you have funds for a down payment and the type of home you’re planning to buy or refinance. A good lender can help you sort through your options and choose the mortgage that’s a match for you.