GMAC Home Loans Evaluated

The General Motor Acceptance Corporation (GMAC) home loan program has been in existence nearly as long as the auto loan program. The company, which started as a way for GM to finance purchases of its own vehicles, expanded into the general finance market and is now one of the largest home loan companies in the country. GMAC loans are offered through a number of banks which are part of the greater GMAC group. Even though it may seem strange to get a home loan from a car manufacturing company, these loans are actually traditional mortgages that operate much the same as other bank loans.

Qualifying for a GMAC Home Loan

Traditional mortgage loans are often the most challenging to qualify for. Traditional lenders are more likely to shy away from risk, and they are also more likely to abide by federal standards for down payment and loan size. Since GMAC loans are traditional mortgages offered through a large finance company, these loans will have similar standards. To qualify, you will need:

  • Good to excellent credit
  • Minimum down payment between 7% and 10%
  • Verification of stable income
  • A favorable asset to debt ratio

Paying for a GMAC Home Loan

The good news about traditional loans is, for those who do qualify, the interest rates tend to be on the low end. In exchange for being a qualified, low risk borrower, you are more likely to see fixed rate offers competitive with other traditional mortgages on the market. Most borrowers will benefit from a fixed rate as opposed to an adjustable rate loan. The expense is more particular over time, and your monthly payments will never go up. Traditional loans are also less likely than alternative loans to have large penalties for late payments or early prepayment. 

Advantages of a GMAC Home Loan

GMAC is a well-respected mortgage lender. As a result, successfully acquiring and routinely paying a GMAC home loan will boost your credit for the future. This will allow you greater flexibility in searching for loans in the future, including home equity loans on your existing property. Aside from credit benefits, GMAC loans are easy to manage. During the course of your mortgage, you will have options to review your loan contract online, pay bills electronically and otherwise service the loan. On the whole, GMAC loans have high customer satisfaction ratings. 

Disadvantages of a GMAC Home Loan

One of the key draw backs of GMAC loans, and most traditional loans, is the lack of flexibility. The lenders are so risk averse that they will often place restrictions on your mortgage other lenders would not place. For example, you may be prohibited from taking large loans against the home's equity. Fees and costs to close the original mortgage or refinance in the future may also be very high. Finally, traditional loans are often too restrictive for low income or first time home buyers. These individuals may actually benefit most from the alternative loan market. If you are seeking a creative loan with much flexibility in the future, explore alternative options first.