Alabama Mortgage Rates

July 29, 2015 02:53 AM Eastern

Refinance rates now in BIRMINGHAM, AL [Change this]

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Home Price (Purchase)
When you get a mortgage to purchase a home, the lender uses the lower of the agreed-upon purchase price or the property's appraised value to determine your maximum loan amount. The loan amount divided by the property home price equals your loan-to-value ratio, or LTV. That ratio is one of the major factors that lenders use to set your mortgage rate. If your LTV exceeds 80 percent, you'll probably be required to pay mortgage insurance, which increases your monthly payment. If the property appraises for less than the agreed-on purchase price, you are not usually required to complete the purchase.
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Home Value (Refinance)
This is your estimate of the current value of your property. When you refinance, your home is almost always evaluated by a licensed appraiser. The refinance loan amount divided by the property's appraised value equals your loan-to-value ratio (LTV), and that number is one of the major factors that determine your mortgage rate. To get an accurate refinance rate quote, your home value estimate must be reasonably accurate.
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Down Payment
The down payment is the amount you pay upfront when you finance property. Your purchase price minus your down payment equals your mortgage amount. The higher your down payment, the more likely you are to be approved for a home loan. If your down payment is less than 20 percent of the purchase price, you'll probably be required to pay for mortgage insurance, which increases your monthly payment.
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Credit Score
Your credit score is a number designed to measure your credit-worthiness. It's based on a formula that combines many factors, including your payment history, amount of credit used and number of accounts. This number is used by lenders to calculate the probability that you'll default on your mortgage. Most lenders won't approve mortgages to applicants with credit scores lower than 620. Your credit score is one of the most important factors that determines your mortgage rate - applicants with higher scores are offered better mortgage rates.

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Mortgage rate quotes displayed on LendingTree LoanExplorer℠, including loan pricing data, rates and fees, are provided by third party data providers including, but not limited to, Mortech®, a registered trademark of Zillow®, LoanXEngine, a product of Mortgage Builder Software, Inc., and LoanTek, Inc.

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If you’re looking for an Alabama mortgage, you’ve come to the right place! On this page, you’ll find local mortgage interest rates, Alabama-specific home buying and  mortgage information and useful links.

Alabama Mortgage Rates

Mortgage interest rates vary between states because of local economies, the amount of competition between lenders, and laws that affect lenders’ costs.

Alabama’s mortgage lenders are regulated by the State of Alabama Banking Department.

Buying a Home in Alabama

Alabama’s housing market is fairly stable but soft. Alabama homes are expected to appreciate by -2.46% to 1.83% in 2013. The housing market is considered  very affordable in Birmingham, Alabama’s largest city. With a median sales price of $130,000 and median household income of $57,100, nearly 83 percent of homes in Alabama are affordable to those earning the median income.

Home closing costs in Alabama are lower than average. Nationwide, the average closing costs for a $200,000 mortgage are $2,402. Alabama’s are $2,348, which  ranks it 33rd in the US.

Several agencies and programs provide homeownership assistance in Alabama. You can link to them from here.

  • Affordable Housing Programs
  • Housing Finance Authority   - low interest loans and down-payment assistance to low and moderate-income homebuyers.
  • Habitat for Humanity  - Habitat affiliates bring homeownership to very low income families.
  • USDA Rural Development  - programs that reduce the cost of homeownership for low and moderate-income families.

Alabama FHA Mortgages

FHA mortgage limits in Alabama are $271,050 for single family homes in all counties except in Daphne-Fairhope where the limit is higher, $285,000. Find FHA  home loans by comparing quotes from HUD-approved FHA mortgage lenders.

VA Home Loans in Alabama

VA mortgage amounts are not limited by program guidelines. However, most lenders cap 100 percent financing at four times the amount of your VA guaranty. In  all Alabama locations, that maximum amount is $417,000.