Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our opinions or reviews. Learn how we make money.
Mortgage lenders in Alabama
Secure financing for your new home in the Yellowhammer State.
To find the best mortgage loan option in Alabama, thoroughly compare rates, terms and closing costs. But first see if you qualify for any government-backed programs.
Government-backed financing in Alabama
Keep an eye on interest rates, closing costs and the availability of government-backed products through FHA or USDA programs. These agencies may help you get stronger terms if you’re a first-time homebuyer or applying for an eligible rural or suburban home.
If you’re a first-time homebuyer, check out the Alabama Finance Housing Authority. The AFHA can help you with your down payment if your annual income is less than $97,300. It may also lend support with your closing costs or a credit certificate to reduce your federal taxes on the mortgage interest you pay every year.
Mortgage lenders for veterans in Alabama
If you’re a veteran, an active service member or an eligible spouse, look into the Veterans Affairs home loan program. The VA program lets you borrow directly from the US Department of Veterans Affairs, which typically offers stronger loan terms compared with private lenders. Note that select private lenders may offer VA-backed home loans with the same or better terms.
How to find the best lenders and rates in Alabama
Local credit unions in Alabama may offer stronger loan terms than your local bank if you’re already a member. Beyond the rate, factors that can affect how much you pay monthly and over the life of your loan include:
- Rates. You aren’t guaranteed the advertised rates. Preapproval is a way to get a more accurate idea of what you’re eligible for.
- Fees. Depending on the lender, you could end up paying more in application, maintenance, insurance, prepayment and other fees, not to mention PMI.
- Terms. A traditional 30-year mortgage offers lower payments over the long term, while a 15-year loan mortgage costs more up front but saves you significant interest over the life of your loan.
- Type. Fixed rates offer reliability that can keep a budget on track, while adjustable rates can be a way to keep interest at a minimum in the first few years of your loan.
- Discounts. Loan programs through the VA, USDA and Alabama Finance Housing Authority can help eligible homeowners save even more.
Closing costs in Alabama
Expect to pay closing costs of $2,653 after taxes on average for a home sale price of $100,000 to $200,000. This puts Alabama below the national average. For comparison, average closing costs in neighboring Florida are $5,585 for houses valued at $200,000 to $300,000.
To find the best mortgage lender in Alabama for your needs, start by comparing interest rates, down payment options, closing costs and whether a lender offers government or VA-backed home loans.
Look to a range mortgage lenders — including banks, credit unions and newer digital options — to narrow down the best fit for your long-term financial goals.
Frequently asked questions
Read more on this topic
Hometap equity partners review Access your equity through a partnership that shares in your home’s appreciation — or not — over 10 years.
How often can you refinance your home? You can refinance your mortgage as often as it makes sense.
What is a cash-out refinance and is it right for me? Find out how it works and if it makes sense for your current situation.
How to prepare for a mortgage refinance appraisal Removing clutter, repainting and updating fixtures can help increase your appraisal value.
Tips for refinancing a mortgage with bad credit You may still qualify for a mortgage refinance with damaged credit.
No-closing-cost refinance: Does it make sense? A no-closing-cost refinance has zero upfront fees, but may still cost you.
Mortgage rates in Hawaii Hawaii mortgage rates typically come in slightly below the national average.
Mortgage rates in New York Mortgage rates in New York generally fall below the national average and don’t vary much between loan types.
How the coronavirus may affect your mortgage Buyers and owners stand to gain as mortgage rates drop due to COVID-19. But longer waits.
HARP loan program alternatives in 2020 There are other government programs that can help you lower your interest rates and monthly payment to keep you from delinquency.
Ask an Expert