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9 best mortgage lenders in Alabama

Hoping to buy a home in the Heart of Dixie? Here’s a look at the best mortgage lenders in Alabama.

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From Mobile to Montgomery and from Birmingham to Tuscaloosa, Alabama is home to some of the best real estate in the Southeast. If you’re thinking about settling down in one of these cities — or elsewhere in the state — the best mortgage lenders in Alabama can help you purchase a home you’ll love.

Best Alabama mortgage lenders in 2020

Why we chose these lenders

The lenders featured on this list were selected based on their fees, loan amounts, interest rates, mortgage programs, minimum requirements and other factors. Our team also considered customer reviews from sites including Zillow, Trustpilot, WalletHub and the Better Business Bureau (BBB). Learn more about Finder’s rating methodology.

Best for online experience

Better.com

Better.com logo
Go to site
at Better.com's secure site
Read review
620
Min. credit score
3%
Min. down payment

Many of Alabama's best mortgage lenders have user-friendly websites that look great on screens of all sizes, but perhaps none of these lenders have a website as polished as Better Mortgage's. Whether you visit it from a smartphone, tablet or laptop, you're likely to find Better's website more intuitive than sites belonging to other lenders.

And in addition to its sleek online presence, Better also offers mortgage programs that don't require an origination fee. Plus, Better can price-match competitors if you happen to find a lower rate elsewhere.

  • Intuitive website. Better's site is user-friendly on screens of all sizes, and the online application process is more straightforward than applications on other lenders' websites.
  • Fewer fees. While other lenders on this list charge a fee for application and origination, Better does not.
  • Price-matching. If you find a lender that offers a lower rate, Better will either match the competitor's price or pay you $100.
  • Limited loan types. Currently, Better Mortgage doesn't offer government-backed VA or USDA loans.
  • No mobile app. Better doesn't have a mobile app like many other lenders on this list.
  • No physical branches. Better is an online-only lender, so it's impossible to meet with a loan officer in person.
Loan types Conventional, Jumbo, FHA, Refinance
Minimum credit score Refinance: 680
All other loans: 620
Minimum down payment 3%
States available Not available in: HI, MA, MN, NV, NH, VT, VA
Fees Better doesn’t charge origination fees, but you can expect to pay other third-party fees for appraisal, title services, recording changes, etc.

Best for refinancing

LoanDepot

LoanDepot logo
Finder Rating: 3 / 5

★★★★★

Go to site
at Loan Depot's secure site
Read review
620
Min. credit score
3.5%
Min. down payment
While many of Alabama's leading mortgage lenders primarily focus on helping you buy a home, several of them can also help you reduce your existing mortgage payment by refinancing. And among these lenders, LoanDepot is the best choice in the state. LoanDepot offers homeowners lifetime guarantees on refinanced mortgages, which means that after you refinance with this company once, it waives any future lender fees and reimburses you for any costs associated with appraisals.
  • No steering policy. LoanDepot's loan officers only offer impartial advice, so you don't have to worry about them misguiding you.
  • No penalty for prepayment. If you manage to pay off your mortgage ahead of schedule, you won't be forced to pay a penalty fee.
  • No charge for appraisal. LoanDepot's loan officers may be able to quickly assess the most appropriate loan for you without requiring an appraisal. This could save you hundreds of dollars.
  • Mandatory origination fee. Not all lenders in Alabama charge origination fees, but LoanDepot may charge as much as 5% for this.
  • Rates aren't available online. To determine your exact mortgage rate, you'll have to contact a loan officer.
  • Bad reviews. As of November 2020, LoanDepot has several reviews on Trustpilot that chide the company for poor customer service, slow loan processing times and uncommunicative representatives.
Loan types Conventional, Jumbo, FHA, VA, Home Equity, Refinance
Minimum credit score Conventional: 620
FHA: 580
VA: 620
Minimum down payment 3.5%
States available Available in all states
Fees LoanDepot doesn’t disclose this information on its website, so speak to your loan officer about additional home loan fees you might pay. Borrowers should expect an origination fee of 1% to 5%

Most popular lender

Rocket Mortgage

620
Min. credit score
3%
Min. down payment
Although the other mortgage lenders in Alabama each have a lot to offer, none can compete with Rocket Mortgage when it comes to popularity. This lender is the most common choice among Alabamans looking for home loans, and it's an excellent choice for borrowers with below-average credit scores. Rocket Mortgage's website lets you receive a conditional prequalification in about 10 minutes, and this lender won't charge you an extra fee if you pay off your loan before its deadline.
  • Bad credit is acceptable. Even if your credit score is as low as 580, Rocket Mortgage may still approve you for an FHA loan.
  • Flexible terms. This lender offers various loan terms, giving you more control over your monthly payments and the length of your loan.
  • No penalty for prepayment. Many other lenders in Alabama will charge you extra if you pay off your loan early, but Rocket Mortgage doesn't penalize borrowers for this.
  • Mandatory application fee. To process your home loan application, Rocket Mortgage will charge you somewhere between $400 and $750.
  • Some loans aren't available. Currently, Rocket Mortgage doesn't offer loan programs for construction or mobile homes.
  • No branches. As an Internet-based bank, Rocket Mortgage doesn't have any physical locations, so this lender might not be a match for you if you require face-to-face service.
Loan types Conventional, Jumbo, FHA, VA, Refinance
Minimum credit score Conventional: 620
FHA: 580
VA: 620
Jumbo: 700
Minimum down payment 3%
States available Available in all states
Fees Rocket Mortgage charges a one-time “good faith deposit” on its home loans, payable by credit or debit card. A $400 to $750 fee covers your credit report, a home appraisal and loan processing fees.

Your deposit is refundable after you close your loan with Rocket Mortgage. It’s subtracted from your closing costs, so you pay less overall for your mortgage.

0.5%–1% origination fee.

Best for low rates

Bank of America

620
Min. credit score
5%
Min. down payment

One of the country's largest financial institutions, Bank of America (BoA) was founded in 1998, although its history dates back to the early 1900s when it opened as the Bank of Italy in San Francisco. BoA is a major player in the US mortgage industry, although it doesn't have many physical branches in Alabama.

However, compared to most other lenders in the state, BoA's mortgage rates tend to be slightly lower, meaning you could save tens of thousands of dollars over the life of your loan. So if you're aiming to pay as little interest as possible, you should certainly consider BoA.

  • Great rates. Compared to other mortgage lenders in Alabama, Bank of America tends to offer lower interest rates.
  • Consideration beyond your credit report. Your credit score could make or break your odds of getting approved for a loan with some lenders, but BoA will also weigh your rent and utility bills.
  • Discounts for existing customers. You could save up to $600 on your loan's origination fee if you already have a Bank of America credit card, checking account or savings account.
  • Poor reviews. BoA is rated 1.3 out of 5 on TrustPilot, and its mortgage department only has a rating of 2.3 out of 5 on WalletHub, with most complaints revolving around customer service.
  • Previous fines. In the wake of the 2008 financial crisis, BoA was forced to pay $76 billion in fines due to misleading investors about their mortgages.
  • Few branches. Bank of America only has a handful of branches in Alabama, so it's not a great choice if face-to-face service is important to you.
Loan types Conventional, Jumbo, FHA, VA, Home Equity/HELOC, Refinance
Minimum credit score Conventional: 620
Minimum down payment 5%
States available Available in all states
Fees Expect fees to include origination, appraisal, title charges, closing fees and state taxes.

Ask your loan consultant for the specific fees associated with your pending loan, and keep an eye out for additional fees in your loan documentation.

Best regional lender

Regions Bank

620
Min. credit score
3.5%
Min. down payment
Headquartered in Birmingham, Regions Bank is the largest financial institution in Alabama, so it processes a significant amount of the state's mortgages. Regions Bank offers a variety of mortgage programs suitable for first-time and experienced borrowers, including programs for renovation and repair as well as construction-to-permanent homes. Additionally, Regions has a unique HomeBonus program that rewards you for using an approved real estate agent.
  • Tons of branches. Regions Bank has nearly 200 branches in 94 cities throughout the state.
  • Payment assistance. If you're ever struggling to make your monthly payment, Regions Bank has several programs to help you make ends meet.
  • HomeBonus program. If you use one of Region's in-network real estate agents, you could get between $350 and $6,500.
  • Mixed reviews. Regions Bank currently has a rating of 1.09 out of 5 on the BBB's website, though it's rated 4.5 out of 5 on Trustpilot. The most common complaints relate to issues with payment processing.
Loan types Conventional, FHA, VA, USDA, Home equity/HELOC, Refinance
Minimum credit score Conventional: 620
FHA: 580
Minimum down payment 3.5%
States available AL, AR, FL, GA, IA, IL, IN, KY, LA, MO, MS, NC, SC, TN, TX
Fees Regions Bank’s closing costs run between 3% and 6% of your mortgage and include fees for loan origination, appraisal, attorneys, title reports, deed recording, survey, deed recording and home inspection.

Best for first-time homebuyers

Trustmark National Bank

Trustmark National Bank logo
620
Min. credit score
3%
Min. down payment
Based in Jackson, Mississippi, Trustmark is a full-service bank founded in 1889, though it didn't expand to Alabama until 2013. Yet despite its relatively recent arrival in the state, Trustmark already has numerous branches throughout Alabama. This lender offers special programs for borrowers with low income and bad credit, but there are currently relatively few reviews for this lender, so it's tough to determine the quality of its service.
  • Advantage products. Trustmark's Home Advantage, Home Advantage PLUS and True Advantage loans helps put homeownership within reach for borrowers with low to moderate income.
  • Bad credit is OK. Trustmark may still approve you for a home loan even if your credit score is as low as 575.
  • Bank-owned properties. If you haven't yet found a home you'd like to buy, Trustmark owns foreclosed houses that might match what you're looking for.
  • Relatively few reviews. Trustmark currently has fewer than 100 customer reviews across several sites, and those reviews are mixed, making it hard to determine the quality of this bank's service.
Loan types Conventional, Jumbo, Refinance, FHA, VA, USDA
Minimum credit score 620 for Conventional, 575 for True Advantage loans
Minimum down payment 3%
States available Only available in: AL, FL, MS, TN, TX
Fees Charges unspecified closing costs and an origination fee.

Best for customer service

Guaranteed Rate

620
Min. credit score
3%
Min. down payment

Although many hopeful homeowners choose a mortgage lender based solely on whichever company offers the lowest rate, quality customer service is equally important. And compared to other mortgage lenders in Alabama, Guaranteed Rate offers perhaps the most exceptional customer service in the state.

Based on more than 11,000 reviews on Zillow, Guaranteed Rate has an incredible score of 4.96 out of 5. And aside from providing stellar support, this lender also offers some of the most attractive mortgage rates in Alabama.

  • Competitive rates. Guaranteed Rate offers some of the lowest interest rates in Alabama.
  • Transparent fees. Guaranteed Rate's website details the factors this lender considers when determining rates.
  • Well-reviewed. Reviews for Guaranteed Rate are generally positive, and many customer comments mention the helpfulness of the company's online representatives.
  • Must have decent credit. You need a credit score of at least 700 to qualify for Guaranteed Rate's best terms.
  • Chat support isn't available. Unlike some other leading lenders, Guaranteed Rate doesn't provide support via live chat.
  • Lackluster support at branches. According to recent customer reviews, Guaranteed Rate's offline support isn't as helpful as its online support.
Loan types Conventional, Jumbo, FHA, VA, USDA, Home Equity/HELOC, Refinance
Minimum credit score Conventional: 620
Other mortgages: As low as 580, depending on type
Minimum down payment 3%
States available Available in all states
Fees Appraisal, credit report, flood certification, state taxes and title insurance

Best for a wide range of credit scores

Fairway Independent

620
Min. credit score
3%
Min. down payment

Headquartered in Madison, Wisconsin and founded in 1996, Fairway Independent Mortgage Corporation is a fast-growing nationwide lender with more than 500 branches. Fairway Independent offers several types of mortgages, including some special home loan programs that aren't available from other lenders.

And even if your credit score isn't stellar, you can still get approved for a mortgage. In fact, for VA and FHA loans, Fairway Independent can approve Alabamans with credit scores as low as 580.

  • Occupation-based offers. Local educators, healthcare workers and other medical professionals may qualify for special mortgage programs through Fairway Independent.
  • Special mortgage programs. Aside from standard mortgages, Fairway Independent also offers reverse mortgages and renovation mortgages.
  • Low credit scores are acceptable. Even if your credit score is as low as 580, Fairway Independent might still approve you for an FHA or a VA loan.
  • Hard credit check. Even if you're not approved for a mortgage, applying for a loan with Fairway Independent will lower your FICO score because this lender conducts hard credit inquiries.
  • Unclear fees. You won't find many details about Fairway Independent's fees on the company's website.
  • Limited locations. Fairway Independent only has eight locations in Alabama, which might not be great if you want in-person service.
Loan types Conventional, Jumbo, FHA, VA, USDA, Refinance
Minimum credit score Conventional: 620
VA: 580
FHA: 580
Minimum down payment 3%
States available Available in all states
Fees No information available without applying

Best marketplace

LendingTree

LendingTree logo
Go to site
at LendingTree's secure site
Read review
620
Min. credit score
3%
Min. down payment

LendingTree is a mortgage marketplace — not a direct lender — that can quickly give you an overview of Alabama's leading lenders and the rates you could qualify for. Start by answering several questions on LendingTree's website, and they'll present you with a list of lenders and their corresponding terms.

Let LendingTree do the legwork of comparing your options to save you tons of time when shopping for a mortgage in Alabama. However, using the platform means you permit LendingTree to share your contact details with third parties, so be prepared to field some unwanted emails and phone calls.

  • Broad portfolio of lenders. LendingTree's marketplace features rates from more than 500 lenders.
  • Fee-free platform. There's no charge to use LendingTree, and none of the lenders featured on the site will ask for upfront payments.
  • Get notified about lower rates. You can set up custom alerts to let you know when Alabama's mortgage rates fall to lower levels.
  • Spam calls and emails. When you agree to use LendingTree's marketplace, you give the company permission to share your information with third-party mortgage providers that may contact you.
  • Hurts your credit score. LendingTree will conduct a hard inquiry when checking your credit, which means you should expect your credit score to fall by a few points.
Loan types Conventional, Jumbo, FHA, VA, USDA, Home Equity, HELOC, Reverse, Refinance
Minimum credit score Conventional: 620
FHA: 500
VA: 620
USDA: 640
Jumbo: 800
Minimum down payment 3%
States available Available in all states
Fees While LendingTree’s service is free to use, there will likely be fees associated with your home loan. These fees vary by lender but often include an origination fee and prepayment fees. A good rule of thumb is to budget at least 0.5% to 1% of the amount you borrow for the loan origination fee.

Which lender is best for me?

There are hundreds of Alabama mortgage lenders to choose from, which can make finding the right one a considerable challenge. To make your decision easier, keep these tips in mind when comparing your options.

  • Read reviews. If you’re iffy about a certain lender, check online review sites to read what recent customers have to say about their experiences.
  • Apply for several preapprovals. When you have several estimates from competing lenders, you’ll have more leverage when it comes to getting the best rate.
  • Never accept the first offer. There’s usually a bit of wiggle room in the terms lenders can offer you, so try to talk loan officers down to the lowest rates possible.
  • Don’t skim anything you sign. Lenders often try to hide hidden fees in their agreements, so be sure to read every word of a loan agreement before signing it.

Compare more mortgage lenders

Name Product Loan products offered State availability Min. credit score
Better.com
Conventional, Jumbo, FHA, Refinance
Not available in: HI, MA, MN, NV, NH, VT, VA
620
Online preapproval in minutes and no origination fees with this direct lender.
Axos Bank
Conventional, Jumbo, FHA, VA, Home Equity/HELOC, Refinance
Available in all states
620
Purchase, refinance, and home equity options available with lender fees as low as $0 (restrictions apply).
LoanDepot
Conventional, Jumbo, FHA, VA, Home Equity, Refinance
Available in all states
620
Access a wide range of mortgage and home equity options in person or online with this direct lender.
LendingTree
Conventional, Jumbo, FHA, VA, USDA, Home Equity, HELOC, Reverse, Refinance
Available in all states
620
Connect with vetted home loan lenders quickly through this online marketplace.
loading

Compare up to 4 providers

Average rates and fees in Alabama

As of October 29, 2020, the average mortgage rate in the US is 2.81%, but it’s currently slightly higher in Alabama. According to the Consumer Financial Protection Bureau (CFPB), the mortgage rate on 30-year fixed-rate mortgages in Alabama average 3.00%.

And while closing costs in the US typically range between 2% and 5%, closing costs in Alabama averaged only 1.39% of the sales price according to 2019 data from ClosingCorp. Continue researching mortgage rates in Alabama or compare closing costs in Alabama for more information.

Should I work with a broker?

With the exception of LendingTree, this list exclusively highlights direct lenders in Alabama because only they can approve and finance your home loan. But researching all your options could take several days — if not weeks.

If you’d like someone to find the best lender for you, you might want to work with a mortgage broker. Mortgage brokers can save you a ton of time, but not all of them have your best interest at heart.

The majority of brokers can be trusted, but a few bad apples might try to charge you unnecessary fees to boost their bottom lines. To identify an Alabama broker you can trust, be sure to read recent customer reviews instead of simply choosing the one who advertises the lowest rates.

Bottom line

Each of the best mortgage lenders in Alabama has something unique to offer, but not all of them are likely to be the best option for you. Consider each of their strengths and weaknesses, and start the application process today. Or, if you’d like to continue exploring your mortgage options, check out our in-depth reviews on other leading lenders in Alabama and beyond.

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