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loanDepot vs Ally

Thursday, February 13th

2025 Home Loan Provider Reviews

loanDepot Review 3.5 Star Rating

loanDepot

3.5 Star Rating
  • Offers 10- to 30-year fixed rate and 3- to 10-year adjustable rate home loans
  • Over $96 billion in home loans and $179 billion in refinanced mortgages
  • "Lifetime Guarantee” on future refis
  • Over 200 locations nationwide
  • In business for over a decade
  • "A+” rated and accredited by the BBB

loanDepot is one of the biggest names in home loans, with more than $275 billion funded across purchases and refinanced mortgages. They specialize in conventional loans, both fixed and adjustable rate, and they have some customer-friendly benefits like a "Lifetime Guarantee” on future refis and a firm "No Steering” policy. However, loanDepot isn't as transparent with current rates and terms, their application process asks for a full SSN a little too quickly for our liking, and complaints about their customer service have started to surface. We still give loanDepot an above-average rating, but the company no longer ranks as one of our most recommended home loan providers.

Ally Review 3 Star Rating

Ally

3 Star Rating
  • Offers fixed-rate and ARM home loans (no VA/FHA)
  • Jumbo mortgages available
  • Verified pre-approval letters available
  • No lender fees (application, origination, processing, underwriting)
  • Closes up to 10 days faster than the industry average
  • $5,000 Ally Home Grant available for some applicants in specific metro areas
  • $500 towards closing costs for eligible Ally customers
  • "A” rated by the BBB

Ally is a well-known name in banking, with products ranging from banking and credit cards to home loans. You can get most traditional fixed- and adjustable-rate mortgages here, including jumbo loans if needed. This lender also has some unique perks, like its Home Grant program in certain metro areas, and their home loans don't come with many of the usual fees (like origination and underwriting). Although there are still some issues with the way Ally's mortgages are closed and serviced, Ally has done the work to improve its reputation, moving up from one of our lowest-ranked home loan providers to a solid rating.

Where Can You Get the Best Home Loan?

When you're thinking about buying a home, getting a mortgage is likely going to be one of the biggest financial decisions you'll ever make. It can feel a bit overwhelming, especially if you're new to the process, but don't worry - once you understand the basics, it becomes much more manageable.

What are the basics? First off, there are different types of home loans. The most common are fixed-rate and adjustable-rate mortgages (ARMs). A fixed-rate mortgage keeps the same interest rate throughout the loan term of 10-30 years, while an ARM typically starts with a lower rate that can change over time, often after an initial fixed period of 3-10 years.

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Home Loan Provider FAQ

Yes, a home loan is the same thing as a mortgage: borrowing money to purchase a home. Home loans are different from home equity loans or home equity lines of credit: the former represents the funds you use to buy your home, while the latter two are used to borrow money against any equity you've built up in the property.
Lenders use many factors to determine your eligibility to take out a mortgage. One of the biggest is your credit history: your credit score, your debt-to-income ratio (i.e. how much you owe on credit cards and any other loans vs. how much you earn), any missing or late payments, and so forth. Other factors include the amount of your down payment, how long you've had steady employment, and the purchase price of the home you want to buy.
It's commonly said that you can afford to buy a home that costs anywhere from 1.5 to 2 times your yearly gross income, but there's a lot more to consider. How much will you pay for property taxes and insurance? Do you have any other debts, like car payments or student loans? How much money will you put down at closing? There are plenty of sites that offer tools to help you calculate how much you can afford to borrow when buying a home; these tools take into account many of these components to give you a more accurate picture of your borrowing power.
Prequalifying for a home loan means that you've taken an informal look at your finances to determine how much you can afford and whether you meet the minimum requirements to take out a mortgage. This can be done without going too deeply into your financial information. On the other hand, a preapproval is given when you complete a full mortgage application: the lender accesses your full credit report and gives you a written offer for a loan at a specific interest rate, subject to your finding a home to buy and completing the underwriting process. Having a prequalification or preapproval letter can make you a more compelling candidate to buy a home and may put you ahead of other parties making an offer.
Yes, especially if you're a first-time home buyer. There are VA loans with no down payment required if you have a military connection, USDA loans with 100% financing on rural properties, FHA loans for buyers with less-than-stellar credit, and many more. While those programs are all federal, there are additional home-buying programs offered by individual states that may also help you get a loan.
An escrow account holds money in reserve to pay your homeowner's insurance, property taxes, and PMI (if required). Your lender collects that money with your monthly mortgage payments, and then disburses the funds to your insurance company and local tax collector by the due date. Some home loans require you to have an escrow account, while others may allow you to pay your taxes and insurance on your own. (But you'll have to make sure to set aside the money, since it won't be collected automatically each month.)
PMI stands for "private mortgage insurance”. It's a fee you may have to pay each month if you're not going to make a down payment of at least 20% of the total loan amount. This third-party insurance coverage protects your lender if you default on your mortgage. You can usually request to have those payments removed once you've reached an equity level of at least 22%; that can be accomplished by making your regular monthly payments over time, by making additional payments towards the principal balance, or by submitting an appraisal showing that your home would currently sell for an amount that would give you the necessary equity (i.e. if home values have increased significantly since the date of purchase).
Absolutely. Some of today's most competitive rates are offered by online-only mortgage lenders with thousands of satisfied customers and a strong reputation for integrity, efficiency and affordability. Of course, it's always a wise idea to check out the background of any home loan provider you're considering prior to offering sensitive financial information or documentation. The Better Business Bureau is a good resource to determine a company's history, as well as current customer reviews.
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Continued from above...

Then, there's the down payment: what you pay upfront towards the purchase price of your new home. Expect to put down at least 20% if you want to avoid paying PMI (Private Mortgage Insurance), but there are options for first-time homebuyers who can't come up with that much just yet.

You probably already know a bit about interest rates: lower is better. But, you can't necessarily control what the market is doing at the time you're ready to buy your home. To save money, compare interest rates across lenders, and look for ones that will charge lower fees (for appraisals, origination, and so on). Pay attention to the loan term too: 30-year mortgages are the most popular in the US (because they give you so much time to pay back, and your monthly payments are lower), but if you'd like a lower interest rate, opting for a 15- or 20-year home loan is the way to go - if you can swing the higher monthly payments every single month.

Once you're ready to apply for a home loan, what can you expect from the process? Many lenders offer a pre-qualification process: it'll tell you how much you can borrow, and it's a great way to show sellers that you're able to afford their asking price or the amount that you're offering. Be aware of whether or not prequalifying will affect your credit score, because that score impacts how much you can borrow.

If you already know which home you're buying, you'll complete a full application (including a hard pull on your credit). Your application then goes into processing and underwriting: verifying your income and credit, appraising the property you're buying, and making the final decision on whether or not to offer you a mortgage. When the lender approves your application, congrats. You'll move to closing, where you sign the paperwork, your home loan is funded, and you're officially a homeowner.

One of the smartest things you can do is shop around online for the right lender. Why? Because not all lenders are created equal. Each one might offer different interest rates, fees, and terms, which can have a big impact on your monthly payments and the overall cost of your loan. When you compare lenders, you're in control, giving yourself the best chance to find a mortgage that fits your budget and long-term financial goals. Plus, it's almost always going to be more competitive than anything your local bank might offer.

So, now that you're convinced that it's time to look for a home loan online, what criteria can you use to make your choice? Keep these in mind:

  • Pre-approval option. Not all lenders let you get a pre-approval letter, instead requiring you to complete a full application (including a hard pull on credit). Choose one that has that option.
  • Rates, terms, and fees. Home loan providers that make those three details clear are the way to go. It's a good sign if they have most (or all) of that readily available before you get too far down the track of applying for a loan.
  • Loan options. Make sure that the lender offers the type of loan that best suits your needs, whether it's a fixed-rate, adjustable-rate, FHA, or VA loan (or something else).
  • Customer service (before and after). Read reviews and ask questions to get a sense of how responsive and helpful the lender is. Good customer service can make the process smoother and less stressful. Consider how they treat applicants during the process, as well as what homeowners say about their experience having their mortgage serviced by the lender.

To help you on your homeownership journey, the experts at Top Consumer Reviews have researched and ranked some of today's most popular online home loan providers. By taking the time to shop around and compare, you'll find a mortgage that's not just good enough but the best fit for you. There's no place like home!

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