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Home Loans In Alabama

Welcome to Capital Home Mortgage Alabama at Premier Mortgage Resources. Alabama is located in the Southeastern region of the United States, with Tennessee and Georgia to the north, Florida and the Gulf of Mexico to the south, and Mississippi to the west. Alabama is the 30th largest state by land area and the 24th most populous state in the United States.

Alabama is renowned for its Southern hospitality, barbecue, and contribution to the Civil Rights Movement. Additionally, it is the location of the earliest Mardi Gras celebration in the United States. It comprises 461 municipalities, 174 cities, and 287 villages, divided into 67 counties. 

In 2023, home sales in Alabama were down 18.8% compared to the previous year. In April 2023, the average home price decreased by 12.7% annually to $235,087. Compared to a year ago, the median sales price decreased by $18,145 to $212,276.

According to some experts, real estate in Alabama is a wise investment in 2023 because it frequently offers excellent returns, tax benefits, and diversification.

Home Loan Programs in Alabama

Home buyers in Alabama can choose from a range of mortgage options. Here’s a rundown of the choices:

  • Conventional Mortgage

Conventional mortgages account for the vast majority of all home loans. They are mortgage loans that are not guaranteed or insured by the federal government, such as the Federal Housing Administration (FHA), the United States Department of Agriculture (USDA), or the Department of Veterans Affairs (VA). Private lenders, such as banks, credit unions, or mortgage companies, often make these loans available. Furthermore, because Fannie Mae and Freddie Mac acquire many conventional loans, many lenders require borrowers to meet the requirements of these institutions.

Borrowers must generally meet the following requirements to qualify for a conventional home loan:

  • Have a credit score of at least 620.
  • Maintain a debt-to-income ratio of no more than 43%.
  • A 20% or higher down payment is required to avoid mortgage insurance. Some programs, however, may allow borrowers to qualify with as little as 3% down. A conventional loan’s typical down payment requirement is 5% of the sales price.
  • Meet the precise standards of each lender, as they may differ.

Due to stringent requirements, qualifying for a conventional loan can be more difficult than qualifying for a government-backed loan. Some other loan types, such as FHA loans, may permit lower credit scores or higher debt-to-income ratios.

While conventional loans comprise most of the mortgage market, applicants must consider their unique circumstances and requirements when selecting a loan product. 

  • FHA Mortgage

A home loan insured by the Federal Housing Administration (FHA) is known as an FHA loan. These loans are popular with first-time homebuyers and those with imperfect credit or limited down payment funds. The FHA does not make loans directly; instead, it insures loans made by private lenders, thereby reducing their risk and making it easier for borrowers to qualify.

The following are the general qualification criteria for FHA loans:

  • Credit Score

A credit score of at least 580 is usually required to qualify for the 3.5% down payment advantage. On the other hand, those with credit scores between 500 and 579 may still be eligible with a 10% down payment.

  • Employment

FHA loans require the borrower to demonstrate a consistent employment history or to have worked for the same employer for the past two years.

  • Debt-to-Income Ratio

Two crucial debt-to-income ratios must be considered. The front-end ratio is the mortgage payment expense to effective income ratio, typically restricted at 31%. The second factor is the back-end ratio, which is the total fixed payment to effective income ratio typically limited to 43%. These ratios can be exceeded with compensating factors.

  • Property Requirements

The home must be the borrower’s primary residence and fulfill specific FHA safety, soundness, and security criteria.

  • Loan Limits

The FHA loan limits in Alabama are $472,030 for a one-unit property, $604,400 for a duplex, $730,525 for a triplex, and $907,900 for a fourplex, respectively.

  • USDA Mortgage

USDA home loans, also known as the USDA Rural Development Guaranteed Housing Loan Program, are mortgages for low-to-moderate-income families residing in rural areas within the United States, including Alabama. The United States Department of Agriculture makes these loans available to boost the economy and quality of life in rural and suburban communities.

Alabama USDA home loan qualification requirements include the following:

  • Citizenship or Residency

Applicants must be U.S. citizens or lawfully admitted resident aliens.

  • Credit Score

Applicants must have a credit score of 640 and above.

  • Stable Income

Applicants must demonstrate a stable and dependable income.

  • Adjusted Household Income

A household’s adjusted income must be equal to or less than 115% of the area’s median income. In most locations of Alabama, the annual income limit for a family of four is less than $85,000.

  • Debt-to-Income Ratio

The USDA prefers that the housing payment not exceed 30% of the borrower’s gross monthly income.

  • Property Location

The property must be located in a USDA-designated eligible rural area. Outside of significant metropolitan footprints, the majority of Alabama is eligible.

Remember that these are basic guidelines, and some of them may differ depending on specific circumstances. For further information, contact the Rural Development office servicing the county where the house is located, or call our USDA loan specialists.

  • VA Mortgage

The Department of Veterans Affairs (VA) offers a unique mortgage program for active service military members, veterans, and qualifying surviving spouses. Its goal is to help these people become homeowners in favorable conditions.

The VA home loan program in Alabama has various advantages. The following are the most important of these advantages:

  • No Down Payment

The VA loan program frequently does not require a down payment from qualified borrowers, which makes homeownership more accessible.

  • Low Interest Rates

VA loans typically have lower interest rates than conventional mortgage loans, which reduces the total cost of the loan over the life of the loan.

  • No Private Mortgage Insurance

Unlike conventional and FHA loans, VA loans do not require the borrower to pay PMI, a monthly insurance premium that protects the lender in case of a loan default.

  • Up to 100% Financing

This is a significant advantage, especially for purchasers who may need more substantial sums of cash for a down payment and closing costs.

To be eligible for a VA loan, you must meet the following criteria:

  • Service Requirement

You must have served at least 90 days of continuous active service during wartime or 181 days of active service during peacetime.

  • Certificate of Eligibility (COE)

You must obtain a COE to demonstrate to your lender that you are qualified based on your service experience and duty status.

  • Credit and Income

You must have good credit, enough income, and meet your lender’s credit and income requirements.

  • Personal Occupancy

The home must be used as your primary residence and personal occupancy.

  • Jumbo Mortgage

Jumbo Mortgage is a home loan used to finance Alabama properties that are too expensive to qualify for a conforming loan. The term ‘jumbo’ refers to loan amounts that exceed the Federal Housing Finance Agency’s conforming loan limits. In 2023, most Alabama counties’ maximum conforming loan amount is $726,200. Therefore, any loan exceeding this limit would be categorized as a jumbo mortgage.

Here are some of the typical criteria that applicants must satisfy to qualify for a jumbo loan:

  • Credit Score

Generally, borrowers need a higher credit score. Although the exact requirement may vary by lender, a credit score of 700 or higher is typically necessary.

  • Down Payment

Contrary to popular belief, jumbo loans only sometimes require a 20% down payment. Certain lenders may offer jumbo loans with as little as a 10% down payment.

  • Debt-to-Income

This is an additional essential consideration for jumbo loans. In general, lenders seek a debt-to-income ratio of 45% or less.

  • Reserves

The cash reserve requirement for a jumbo loan is the amount of cash or other assets a borrower must have after the loan closes. The borrower maintains these reserves as an emergency fund to mitigate the risk of default. Since jumbo loans involve more significant amounts of money than conforming loans, they are viewed as riskier by the lender, resulting in stricter reserve requirements.

The reserve requirements may vary based on the lender’s policy and the loan’s specific characteristics, such as the loan’s size, the borrower’s credit score, and other financial factors. Six to twelve months is the typical reserve requirement for a jumbo loan.

Apply for a Home Loan in Alabama

Working with Capital Home Mortgage offers several benefits to Alabama homebuyers. We offer competitive rates and simple eligibility requirements. Capital Home Mortgage can assist in securing a mortgage and provide expert advice on maximizing loan programs. Prospective homebuyers can better understand Alabama’s mortgage options, which can influence their purchasing decisions.

Call (205) 352-1030 to speak with one of our Alabama Home Loan Specialists. We are here to help!

Why Alabama HomeBuyers are Choosing Capital Home Mortgage
Close On Time

Complete Control from Application to Funding

Low Rates & Low Fees

Direct Lender with Competitive Rates & Low Fees

Exceptional Service

7  Day a Week Support Application to Final Mortgage Payment

Alabama Mortgage Rates

Have you ever wondered why interests rates are what they are and what determines the final rate?  Why borrowers receive different interest rates? Or why rates go up and down?  Interest Rates are calculated using several factors.

  • Demand for the mortgage Securities
  • Property securing the mortgage
  • occupancy of the property
  • Loan to value of the property
  • Borrower’s credit worthiness
Alabama Mortgage Programs

Alabama Home Purchase loans

Looking to Purchase an Alabama Home?

Looking to Purchase a Home? We have the loan program for you… Call today to speak with a loan officer to discuss your personal mortgage options.
  • Primary, 2nd Home, Investment
  • Low Rates & Fees, No fee Options
  • FHA, VA, USDA, Native American
  • Conventional, Jumbo & Renovation
  • Manufactured, Construction, Reverse

Alabama Renovation Home Loans

Looking to Rehab an Alabama Home?

Want the Charm of an Older Neighborhood? But want a new place or a fresh look? Why not a renovation loan? Purchase the Perfect Home and make it your own.
  • Remodel, Renovate or Repairs
  • FHA 203K Streamline 
  • FHA Full Documentation Rehab
  • Fannie Mae Homestyle Reno
  • Freddie Mac Home Choice Reno

Alabama FHA Home loans

Great 1st Time Alabama Homebuyers

FHA Home Loans are great for first time home buyers, buyers with less than perfect credit, or buyers needing less out of pocket.   Call today to get started.
  • Smaller Down Payments
  • Flexible Underwriting Guidelines
  • Higher Debt to Income Allowed
  • Lower Credit Scores – Down to 500
  • Down Payment Gifts Allowed

Alabama va Home Loans

100% Financing for Alabama Vets

Proudly Serving Active Duty servicemen and women, as well as, retired and disabled veterans. Call today to speak with a VA loan officer.
  • No Mortgage Loan Limits
  • Simple Qualifying
  • Higher Debt to Income Allowed
  • Lower Credit Scores – Down to 500
  • Manual Underwriting Allowed

Alabama Conventional Home loans

Flexibility for Alabama Homebuyers

Conventional Home Loans are the best option for flexibility of property types and for mortgage loan terms. Call today to get speak to a loan officer.
  • Primary, 2nd Home, Investment Properties
  • Single and Multi-Family Properties
  • Variable Mortgage Insurance Options
  • Low Rates & a Variety of Mortgage Terms
  • Renovation Programs Available

Alabama Jumbo Home Loans

Alabama Non-Confirming Home Loans

Jumbo Home Loans also called Non Conforming Home Loans are great options for buyers needing financing outside of agency limits. Call today.
  • Primary & 2nd Homes
  • Variety of Mortgage Programs
  • Simple Qualifying for Veterans
  • Investor Specific Guidelines
  • Credit Score Minimums

Alabama USDA Home loans

100% Rural Alabama Home Loans

USDA Loans are a great option for families wanting to live outside of the city.  Call today to speak with a loan officer to discuss your personal loan options.
  • Primary Residences
  • No Down Payment Required
  • New Manufactured Homes Allowed
  • Closing Costs / Repairs Rolled In
  • Geographic and Income Limits Apply

Alabama Native american Home Loans

Alabama Hud 184 Home Loans

HUD 184 Home Loans are solely for Native American and offer a variety of benefits.  Call today to speak with a loan officer to find out more.
  • Primary Residence Only
  • Manual Underwriting for All Loans
  • No Credit Score Requirements
  • Tribal Grants Allowed
  • Purchase, Refinance, and Renovation

Alabama Manufactured Home loans

Great Alternative Alabama Housing

Manufactured Home Loans offer options to purchase an existing residence or build your dream home on your own land. Call today to speak to a Loan Officer.
  • Existing Purchase or Refinance
  • New Construction
  • One Time Close Land/Home Combo
  • Lock at Contract
  • FHA, VA, USDA, Native American

Alabama Reverse Mortgage Loans

Your Alabama Home at Work

Reverse Mortgage Loans offer seniors options to use their home’s equity for cash or to eliminate payments. Call today to get speak to a Reverse Loan Officer.
  • Primary Residence Only
  • Simple Qualifying – Equity Based
  • No Credit Score Requirements
  • Minimum Age 62
  • Purchase, Refinance, and Cash-Out

Alabama Non QM Home loans

Making Alabama Mortgages Possible

Looking for Non Traditional Home Mortgage Loan?  Contact a Loan Officer Today to discuss the alternative mortgage options currently available.
  • Purchase, Refinance & Cash-out
  • Primary, Secondary, Investment Properties
  • Full Doc Programs
  • Alt Doc Programs
  • Corporations OK

Alabama One Time Close Home Loans

Build Your Alabama Dream Home

Want to Build? But unsure of what the future looks like? Remove the risk with a One Time Close Construction Loan.  Call today to see how a OTC loan works.
  • Primary Residences Only
  • One Time Close
  • Lock Rate at Closing
  • Traditional Final Mortgages
  • No Payments During Construction

Alabama Refinance Mortgage loans

Alabama Rate & Term Refinance

Refinancing can be a hard decision and the payback can sometimes be confusing.  Call today and let our Loan Officers walk you through the process.
  • Lower Monthly Payment
  • Shorten Mortgage Term
  • Streamline Options Available
  • Appraisal Waivers Allowed
  • VA IRRRL’s

Alabama Cashout Mortgage Loans

Alabama Equity Mortgage Loans

Cash-Out Mortgage Loans make use of the equity in your home by allowing you to refinance the current mortgage and access this equity to use as you see fit.
  • Debt Consolidation
  • Investment Opportunities
  • Home Improvement
  • Dream Vacation
  • Higher Education

Alabama Mortgage Team

Dale Gremillion

Manager / Sr Loan Officer
NMLS 210325

Conor Hayhurst

Manager / Sr Loan Officer
NMLS 743506

Brad Rund

Director Native American Lending
Director Manufactured Housing

Alabama Mortgage Company Reviews

AlabAMA Cities

Birmingham Home Loans

Montgomery Home Loans

Mobile Home Loans

Huntsville Home Loans

Tuscaloosa Home Loans

Hoover Home Loans

State Specific Mortgage Information

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