Buying a home in Alabama

Alabama's effective property-tax rate is about 0.372%of a home's value per year, lower than the U.S. average of 0.888%. On a $500,000 home that's roughly $1,860 a year.

Full Alabama property-tax guide →

Alabama involves an attorney at closing, and Alabama levies a real-estate transfer/deed tax of about 0.1% — customarily negotiable-paid. deed recordation $0.50/$500, uniform; payer not fixed by statute. Code of Ala. §40-22-1. On a $400,000 home, estimated closing costs run about $8,098–$12,198 on top of your down payment.

Full Alabama closing-costs guide →

Alabama runs a housing finance agency with first-time-buyer help: down-payment assistance, below-market first mortgages, and mortgage tax credits.

See first-time buyer programs in Alabama →

What you can afford depends on your income, debts, and down payment, not just the home price. Alabama's property taxes above feed straight into the monthly payment lenders measure against your income.

Enter your numbers once and see your real affordability range, debt-to-income, and rent-vs-buy break-even for Alabama:

Home Buying Steps walks you through the whole process, from checking if you're ready to getting pre-approved to closing day, one clear step at a time, tailored to Alabama where the rules differ.

• 1. Are you ready? — budget, credit, rent vs. buy
• 2. Get your finances in order — pre-approval
• 5. Making an offer — earnest money & contingencies
• 10. Closing day — every cost, line by line