Interest Rate
Average home price

If you’re planning to buy a home in Alabama, you’ll want to ensure you are getting the best mortgage rate possible. Your mortgage rate will depend on a wide variety of factors, including your credit score, how much of a down payment you can put down, your debt-to-income ratio, and your level of income.

You can help yourself get the best mortgage rate in Alabama by checking your credit before you apply for a home loan, making sure all of your documentation is in order, and getting preapproved by a reputable mortgage lender.

Here’s a quick look at current Alabama mortgage rates:

Loan Program Mortgage Rate APR* 1 Day Change
Conventional 30 year fixed 6.635% 6.699% +0.14%
Conventional 20 year fixed 6.149% 6.231% Unchanged
Conventional 15 year fixed 5.929% 6.061% -0.05%
Conventional 7 year ARM 6.903% 7.65% Unchanged
Conventional 5 year ARM 6.75% 7.714% +0.18%
FHA 15 year fixed 6.341% 7.063% Unchanged
FHA 30 year fixed 6.148% 6.91% Unchanged
VA 30 year fixed 5.885% 6.15% +0.1%
VA 15 year fixed 5.545% 5.886% +0.11%
VA 5 year ARM 6.114% 6.95% -0.09%

Data source: ©Zillow, Inc. Use is subject to the Terms of Use

Buying a Home in Alabama

Thinking about buying a home in Alabama? This could be a great time to find your dream home in the Yellowhammer State. Here’s what you need to know:

Start by figuring out where you want to live. Alabama is home to almost 5 million people, and one in six live in the state’s top five biggest cities:

  • Birmingham
  • Montgomery (state capital)
  • Mobile
  • Huntsville
  • Tuscaloosa

Next, find out how much home you can afford. Alabama ranks 38th in US homes for sale at average price, and 31st for homes over $1,000,000. Getting preapproved can help you know what your budget is before you go house hunting.

First-time Homebuyers

If you are a first-time home buyer, you may be able to qualify for assistance through a program administered by the Alabama Housing Finance Authority (AHFA.)

The Step Up program provides 3% down payment assistance for FHA or conventional loans. You’ll get a 30-year fixed-rate first mortgage, with the down payment secured by a 10-year second mortgage, bundled into one mortgage payment a month.

The Affordable Income Subsidy Grant can provide you with help to cover closing costs, and can be combined with down payment assistance through Step Up.

To qualify for these first-time home buyer programs in Alabama, you’ll need:

  • To complete a homeowners education course
  • An income less than the 80% or less of the area median income pr $97,300 (the lesser)
  • A minimum credit score of at least 640
  • A debt-to-income ratio of 45% percent or lower

Refinancing in Alabama

If you need to refinance a home in Alabama to take advantage of favorable Alabama mortgage rates, you can do any of the following:

  • Refinance for a lower interest rate
  • Refinance for a longer term
  • Refinance to cash-out equity
  • Refinance to remove a private mortgage insurance (PMI) requirement

You may qualify for a streamlined refinance if you have a certain type of loan. Ask your lender for more information.


Buying a Home?

Each step-by-step guide is designed to shepherd you through a process from start to finish. Know what to expect and how to proceed, no matter where you are in your home buying journey.

1 The First Step in Buying a Home – Preapproval

What Is a Mortgage Preapproval? | How Much Will My Monthly Payment Be? | How Much Will My Down Payment Be? | How Long Does a Mortgage Preapproval Last? | What Is the Difference Between a Standard Preapproval and an Underwritten Preapproval?

Read More

3 How much money do I need?

How Can I Lower My Mortgage Payment? | How Can I Lower My Closing Costs? | When Do I Pay Out-Of-Pocket Costs? | What are Prepaid Items or Escrows? | What Will My Closing Costs Be?

Read More

4 The Basics of Mortgage

What Documents Need to be Updated During the Home Loan Process? | What Contingencies Do I Need? | How Important is the Closing Date? | Steps in the Loan Process | Understanding Common Mortgage Terms

Read More

5 Finding a Real Estate Agent

What Are the Top 6 Questions to Ask a Real Estate Agent? | Should I Use the Seller's Real Estate Agent? | Are Online Discount Realty Services a Good Idea? | How Much Does a Buyer's Real Estate Agent Cost? | Why Do I Need a Real Estate Agent to Buy a Home?

Read More
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