Ally Bank Mortgage Review: A quick pre-approval process and no lender fees for homebuyers

Ally Bank has grown in popularity as online banks without brick-and-mortar outposts have become more prominent over the years, mostly for their ability to pass on the savings from not having overhead expenses to their customers.

While Ally Bank's Online High-Yield Savings Account is one of its most popular online products, the lender also offers several mortgage options for those who are in the market to buy a home. Aside from the signing of the closing documents, which must be done in person with direction from the lender, the rest of the homebuying process is completed online.

CNBC Select reviewed Ally Bank's mortgage options, taking a closer look at factors such as down payment minimums, term lengths and other perks. Read more about our methodology below.

• APR
• Loan offerings
• Down payment minimums
• Term lengths
• Customer support
• Perks
• Bottom line

The best way to figure out the annual percentage rate, or APR, you're likely to be offered by Ally Bank is to get pre-qualified and submit your home loan application.

While mortgage interest rates can fluctuate quite often, the rate you'll receive will depend heavily upon your location, credit score and credit report. Take a look at each lender's website to get a better idea of the kinds of interest rates they charge, but keep in mind that they'll vary by your location and creditworthiness. Either way, it's important to provide the necessary information to check your personalized rate.

While Ally Bank offers conventional loans and jumbo loans, other options such as VA loans, USDA loans and FHA loans are not available through this lender.

Ally Bank also offers the Fannie Mae HomeReady mortgage program, which would allow low- to mid-income homebuyers to pay as little as 3% for a down payment regardless of whether or not it's their first time going through the process. Applicants must also have a debt-to-income ratio of no more than 50%, while their income must be equal to or less than 80% of the area's median income and at least one borrower must take a homeowner education course.

Conventional loans usually carry a minimum down payment of at least 5%. When it comes to jumbo loans, Ally Bank requires a down payment of at least 10%, which is pretty typical of most mortgage lenders. Just keep in mind that you'll need to budget 2% to 5% of your loan amount to pay closing costs on a jumbo loan.

With the HomeReady mortgage program, homebuyers can make a down payment of just 3%.

Ally Bank offers 15-year, 20-year and 30-year loan terms. You'll also have a choice between fixed-rate and adjustable-rate mortgage terms.

Home team experts are available through Ally Bank for homebuyers who have any questions or concerns. Applicants have the option to call, email or text the expert they're working with for personalized guidance about completing your application and managing your documents online.

It's common for lenders to charge fees for different parts of the mortgage application process — these lender fees typically include application fees, origination fees, processing fees and underwriting fees — which can end up costing a significant amount of money.

While Ally Bank doesn't charge any of those types of lender fees, be aware that you may still be charged an appraisal fee and a recording fee, as well as extra fees for a title search and insurance.

Ally Bank also boasts an expedient pre-approval turnaround — according to the lender's website, you can get pre-approved in as little as three minutes online. This will also get you a pre-approval letter from Ally Bank to give you an advantage over homebuyers who haven't gotten pre-approved yet while you're looking for a home.

Ally Bank makes the mortgage application process a little less of a waiting game by offering pre-approval in as little as three minutes and having a mortgage process that's done almost exclusively online — you'll just need to meet in person to sign the closing documents.

Ally also cuts out some of the common lender fees, which can help save homebuyers some money. Since this lender only offers conventional loans, jumbo loans and the HomeReady mortgage program, those who are interested in other loan options, such as a VA loan or an FHA loan, might consider working with lenders such as Chase Bank or PNC Bank instead.

To determine which mortgage lenders are the best, CNBC Select analyzed dozens of U.S. mortgages offered by both online and brick-and-mortar banks, including large credit unions, that come with fixed-rate APRs and flexible loan amounts and terms to suit an array of financing needs.

When narrowing down and ranking the best mortgages, we focused on the following features:

• Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed-rate APR, you lock in an interest rate for the duration of the loan's term, which means your monthly payment won't vary, making your budget easier to plan.
• Types of loans offered: The most common kinds of mortgage loans include conventional loans, FHA loans and VA loans. In addition to these loans, lenders may also offer USDA loans and jumbo loans. Having more options available means the lender is able to cater to a wider range of applicant needs. We have also considered loans that would suit the needs of borrowers who plan to purchase their second home or a rental property. 
• Closing timeline: The lenders on our list are able to offer closing timelines that vary from as promptly as two weeks after the home purchase agreement has been signed to as many as 45 days after the agreement has been signed. Specific closing timelines have been noted for each lender.
• Fees: Common fees associated with mortgage applications include origination fees, application fees, underwriting fees, processing fees and administrative fees. We evaluate these fees in addition to other features when determining the overall offer from each lender. Though some lenders on this list do not charge these fees, we have noted any instances where a lender does. 
• Flexible minimum and maximum loan amounts/terms: Each mortgage lender provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your loan.
• No early payoff penalties: The mortgage lenders on our list do not charge borrowers for paying off the loan early. 
• Streamlined application process: We considered whether lenders offered a convenient, fast online application process and/or an in-person procedure at local branches. 
• Customer support: Every mortgage lender on our list provides customer service via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
• Minimum down payment: Although minimum down payment amounts depend on the type of loan a borrower applies for, we noted lenders that offer additional specialty loans that come with a lower minimum down payment amount. 

After reviewing the above features, we sorted our recommendations by best for overall financing needs, quick closing timeline, lower interest rates and flexible terms.

Note that the rates and fee structures advertised for mortgages are subject to fluctuate in accordance with the Federal Reserve rate. However, once you accept your mortgage agreement, a fixed-rate APR will guarantee your interest rate and monthly payment will remain consistent throughout the entire term of the loan, unless you choose to refinance your mortgage at a later date for a potentially lower APR. Your APR, monthly payment and loan amount depend on your credit history, creditworthiness, debt-to-income ratio and the desired loan term. To take out a mortgage, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.

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