Thinking about settling down in the Heart of Dixie? Those who say yes should have many options. Alabama has just below 2.3 million housing units and a homeownership rate of 68%, according to the U.S. Census Bureau’s 2018 American Community Survey.
Alabama’s median housing value is $147,900, which is roughly 36% below the national median value of $229,700. Depending on where you look in Alabama, both higher and lower housing prices can be found.
U.S. News conducted an in-depth review of leading direct mortgage lenders. Research was based on program availability and customer satisfaction ratings. Because each consumer has different needs, the top finishers in several key areas were chosen.
U.S. News’ Best Alabama Mortgage Lenders
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Best for low-interest VA loans
Before You Apply
- Mortgage types: VA, Military Choice, conventional fixed rate, Homebuyers Choice, ARM
- Minimum FICO credit score: Not disclosed
- Maximum loan amount: $2 million
- Better Business Bureau rating: A+
Best Features
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Zero-down loans are available.
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Private mortgage insurance is not required for many loans.
Before You Apply
- Mortgage types: conventional, FHA, VA, USDA, ARM, Carrington Flexible Advantage, first-time buyers, refinancing
- Minimum FICO credit score: 500
- Maximum loan amount: $2.5 million
- Better Business Bureau rating: A+
Best Features
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Applicants with credit scores as low as 500 are accepted for some products.
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Conventional loans are offered with down payments as low as 3%.
Before You Apply
- Mortgage types: fixed rate, ARM, conventional, USDA/Rural Development, FHA, VA, jumbo, refinance, renovation, reverse mortgage
- Minimum FICO credit score: 580
- Maximum loan amount: undisclosed
- Better Business Bureau rating: A+
Best Features
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The selection of mortgages includes VA and USDA loans, which often have no down payment requirements.
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The company has an A+ customer service rating with the Better Business Bureau.
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Renovation loan options include the HomeStyle Renovation Loan, which combines the cost of remodeling and the mortgage into one loan.
Best for consumers with credit scores between poor and good
Before You Apply
- Mortgage types: conventional, fixed rate, ARM, FHA, refinance, VA, FHA Streamline Refinance, Refi Plus, VA Streamline Refinance
- Minimum FICO credit score: 620
- Maximum loan amount: Not disclosed
- Better Business Bureau rating: A+
Best Features
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Borrowers with fair credit may qualify.
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It features a simple online application process.
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VA loan borrowers aren’t charged lender fees.
Before You Apply
- Mortgage types: conventional, FHA, VA, USDA, ARM, refinancing, renovation, jumbo
- Minimum FICO credit score: 620
- Maximum loan amount: $2 million
- Better Business Bureau rating: A+
Best Features
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A broad range of mortgage products are offered.
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Special mortgage programs for first-time buyers and manufactured homebuyers are available.
Before You Apply
- Mortgage types: VA, VA jumbo, refinance
- Minimum FICO credit score: 640
- Maximum loan amount: $1.5 million
- Better Business Bureau rating: A+
Best online bank for customer service
Before You Apply
- Mortgage types: fixed rate, ARM, home equity loans, refinancing, HomeReady for first-time homebuyers
- Minimum FICO credit score: 620
- Maximum loan amount: $4 million
- Better Business Bureau rating: A+
Best Features
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A program is available for first-time homebuyers.
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Existing Ally customers can get a closing cost discount.
Before You Apply
- Mortgage types: fixed rate, Affordable Loan Solution, FHA, VA, ARM, home equity line of credit, fixed-rate refinancing, FHA refinancing, VA refinancing, cash-out refinancing, adjustable-rate refinancing, jumbo
- Minimum FICO credit score: Not disclosed
- Maximum loan amount: $2.5 million
- Better Business Bureau rating: A+
Best Features
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Bank of America has a wide variety of mortgage products.
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The lender offers origination fee discounts for qualifying Bank of America and Merrill Lynch clients.
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Home equity lines of credit have no annual, application or cash advance fees or closing costs.
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Bank of America offers a first-time homebuyer program.
Before You Apply
- Mortgage types: fixed rate, FHA, VA, USDA, ARM, home equity line of credit, refinancing, medical professional mortgage program, jumbo, PNC Community
- Minimum FICO credit score: Not disclosed
- Maximum loan amount: $5 million
- Better Business Bureau rating: A+
Best Features
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Multiple types of mortgages are available.
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Some mortgage options require no or low down payments.
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PNC supplies an online home ownership cost tool.
Before You Apply
- Mortgage types: Traditional, ARM, refinancing, home equity line of credit, Alliant Advantage Mortgage
- Minimum FICO credit score: 620
- Maximum loan amount: $2.5 million
- Better Business Bureau rating: A+
Best Features
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No-down-payment mortgages are available for first-time homebuyers with excellent credit.
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Mortgages are available to borrowers with FICO credit scores as low as 620.
What Are the Mortgage Rates in Alabama?
Home interest rates range from 2.25% to 4.13% in Alabama.
What Are Today’s Mortgage Rates?
Locking in a low mortgage rate today can save you thousands over the life of your loan. Compare your mortgage rate offers with national average trends.
Mortgage Calculator
Is your dream home within reach? U.S. News’ mortgage calculator will show you how much house you can afford.
What Are Some Alabama Homebuyer Programs?
Alabama Housing Finance Authority has three homebuyer assistance programs Alabama homebuyers can use to help purchase a home. They include down payment assistance loans, closing cost grants and federal income tax credits.
- Available to: Eligible Alabama homebuyers using HFA Advantage conventional or Federal Housing Administration loans.
- Income limits: Vary by loan type and potentially by county (see income limits).
- First-time homebuyers only? No.
- Benefits: Up to 3% down payment assistance in the form of a second mortgage with a 10-year term.
- Available to: Eligible Alabama homebuyers using HFA Advantage conventional loans.
- Income limits: Vary by county (see income limits).
- First-time homebuyers only? No.
- Benefits: A grant of up to 1% to help with closing costs.
- Available to: Eligible Alabama homebuyers.
- Income limits: Vary by area (see income limits).
- First-time homebuyers only? No.
- Benefits: A federal income tax credit that varies from 20% to 50% of the annual interest paid based on the loan amount.
View More Best Alabama Mortgage Lenders
Before You Apply
- Mortgage types: conventional, FHA, VA, USDA, ARM, refinancing, bond, renovation, Freddie Mac HomeOne, Freddie Mac Home Possible, Fannie Mae HomeReady
- Minimum FICO credit score: 620
- Maximum loan amount: $3 million
- Better Business Bureau rating: A
Best Features
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The first-time homebuyer program HomeOne can require a down payment of as little as 3% and borrowers may qualify with a minimum 620 credit score.
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Government-insured loans including Federal Housing Administration, Veterans Affairs, and United States Department of Agriculture programs are available.
Before You Apply
- Mortgage types: conventional, FHA, VA, USDA, jumbo, All in One Loan, 203K Renovation Loan, Fannie Mae HomeReady, Freddie Mac Home Possible, HomeFundIt, refinance
- Minimum FICO credit score: 620
- Maximum loan amount: $3 million
- Better Business Bureau rating: A+
Best Features
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Exclusive mortgage products include the HomeFundIt for crowdfunding a down payment.
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The lender has a national presence with regional fulfillment and local support.
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CMG Financial offers a mobile app.
Before You Apply
- Mortgage types: conventional, VA, ARM, FHA, USDA, jumbo, refinance, home equity
- Minimum FICO credit score: Not disclosed
- Maximum loan amount: $3 million
- Better Business Bureau rating: A+
Best Features
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Flagstar Bank provides a broad selection of mortgages and home equity loans.
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Some mortgages require no or a low down payment.
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Borrowers can apply for loans online.
Before You Apply
- Mortgage types: refinance, jumbo, hybrid ARM, fixed rate, HARP, VA, FHA, 203k loan
- Minimum FICO credit score: 620
- Maximum loan amount: $3 million
- Better Business Bureau rating: A+
Best Features
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LoanDepot mortgages have a lifetime guarantee, which means if you ever decide to refinance an existing LoanDepot loan, the company will waive the lender fees and reimburse appraisal fees.
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The company offers a variety of mortgage products.
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It’s licensed in all 50 states.
Best for digital customer care
Before You Apply
- Mortgage types: fixed rate, ARM, conventional, cash-out refinance, refinance, jumbo, FHA, VA, USDA, new construction, interest rate reduction refinance loan
- Minimum FICO credit score: 640
- Maximum loan amount: undisclosed
- Better Business Bureau rating: A+
Best Features
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Homebuyers can choose from a variety of mortgage products.
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Home loans are available nationwide.
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Down payment and closing cost assistance is available.
Before You Apply
- Mortgage types: conventional, jumbo, FHA, VA, USDA, HomeReady, High Balance/Super Conforming, Energy Efficient Mortgage, FHA
- Minimum FICO credit score: Not disclosed
- Maximum loan amount: $2 million
- Better Business Bureau rating: A+
Best Features
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Varied loan options are available.
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McGlone Mortgage Group offers mortgage calculators and other tools.
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Co-signers are allowed for most loans.
Best for conventional mortgage
Before You Apply
- Mortgage types: conventional, ARM, refinance, HELOC, jumbo, fixed rate
- Minimum FICO credit score: undisclosed
- Maximum loan amount: undisclosed
- Better Business Bureau rating: A+
Best Features
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Citizens Bank provides a homebuying service with rewards for borrowers in select states.
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Homebuyers can get an interest rate discount for qualifying automatic payments.
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Borrowers can apply online.
Before You Apply
- Mortgage types: conventional, FHA, VA, ARM, refinancing
- Minimum FICO credit score: 620
- Maximum loan amount: $765,600
- Better Business Bureau rating: A+
Best Features
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PennyMac accepts a 50% debt-to-income ratio for conventional loans in some instances.
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Online capabilities include a 24/7 access center and email status updates.
Before You Apply
- Mortgage types: ARM, cash-out refinance, conventional, FHA, HELOCs, jumbo, reverse, USDA and VA
- Minimum FICO credit score: 620
- Maximum loan amount: $3 million
- Better Business Bureau rating: A+
Best Features
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Provides multiple mortgage options, including low and no down-payment loans
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Offers fixed- or adjustable-rate mortgages
Advertising Disclosure: Some of the loan offers on this site are from companies
who are advertising clients of U.S. News. Advertising considerations may impact
where offers appear on the site but do not affect any editorial decisions,
such as which loan products we write about and how we evaluate them. This site
does not include all loan companies or all loan offers available in the marketplace.
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