Overview of Alaska Mortgages
Beautiful Alaska is the largest state in the U.S., but with a population below 1 million, it’s also the most sparsely populated. Mortgage rates in Alaska are around the national average. Alaska counties’ conforming loan limits are higher than average, as are FHA loan limits in almost two-thirds of the state’s counties.
National Mortgage Rates
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Alaska Mortgage Rates Quick Facts
Historical Mortgage Rates in Alaska
For the past decade, Alaska mortgage rates were equal to or slightly below the national average. So far, the 2016 Alaska mortgage rates are slightly below average.
Alaska Historic Mortgage Rates
|Year||Alaska Rate||U.S. Rate|
Alaska Mortgages Overview
Alaska real estate is more expensive than average. In Alaska, the average value for a single-family home is $266,500, which is higher than the average nationwide home value of $186,100, according to Zillow.
Alaska Mortgage Rates
|Percentage of Homes||84.50%|
|Average Property Value||$164,671.67|
|Percentage of Homes||10.80%|
|Average Property Value||$99,012.50|
|Percentage of Homes||0.80%|
|Average Property Value||$217,279.76|
|Percentage of Homes||3.90%|
|Average Property Value||$166,845.69|
The conforming loan limit for every county in the state is higher than the standard $417,000. This is a reflection of the higher real estate prices in Alaska.
Conforming and FHA Loan Limits by County
|County||Conforming Limit||FHA Limit|
|Fairbanks North Star||$625,500||$274,850|
|Lake and Peninsula||$625,500||$271,050|
|Prince Of Wales-Hyder||$625,500||$271,050|
It’s important to note that Alaska is a “deed of trust” state, meaning when you take out a mortgage in Alaska you’ll likely get a “deed of trust” instead of an actual mortgage. In Alaska, lenders who issue mortgages have to go to court to foreclose on the home that the mortgage applies to. But if a trust deed is offered instead, the time and expense of going to court can be avoided. The lender can initiate a “power of sale” foreclosure by hiring a third party to auction the home it wants to foreclose.
Some states are “recourse” states, meaning that if you go into foreclosure, a lender is allowed to go after your assets for any difference between your home’s value and the amount owed on your mortgage. However Alaska is a “non-recourse” state, meaning you generally would not be liable for that difference in a foreclosure.
Alaska also has disclosure laws to protect buyers when they’re closing on a house. Alaska Statute (AS) 34.70.050 establishes that if a potential buyer makes a written offer on a residential property, then the seller must deliver a written disclosure statement to the buyer. Even so, it’s always smart to opt for a home inspection before closing on a house.
30-Year Fixed Mortgage Rates in Alaska
The most common type of home loan in the United States is a 30-year fixed-rate mortgage. This mortgage usually makes the most sense for buyers who plan to stay in their house for a long time, as the interest rate remains steady for the duration of the loan. Alaska buyers can also consider a 15-year fixed rate mortgage with a lower interest rate, but the flip side of that is that monthly payments are higher. The average Alaska mortgage rate for fixed-rate 30-year mortgages is 4.79%.
Alaska Jumbo Loan Rates
Homes in Alaska are more expensive than the average U.S. home. As a result, you will find that every Alaskan county has a conforming loan limit of $625,500 – considerably higher than the standard $417,000 in most of the U.S. “Jumbo loans” are those that exceed conforming limits and therefore are accompanied by higher interest rates. Issuing loans above conforming limits presents a bigger risk for lenders, so the higher interest on jumbo loans combats that risk. The average jumbo loan rate in Alaska is 4.71%.
Alaska ARM Loan Rates
An adjustable-rate mortgage – or ARM -- usually offers a lower interest rate upfront than a fixed-rate mortgage. The lower rate is available for an initial period somewhere between one and 10 years, depending on the terms of the loan. After that time frame, the rate will typically rise but is capped at a certain level specified in the terms of the loan. Before signing on to an ARM to purchase a home in Alaska, remember to ensure that the highest possible interest rate is one that you can afford to pay.
The average rate for an ARM in Alaska is 4.5%.
Alaska Mortgage Resources
Whether you’re a first-time homebuyer looking for down payment assistance or a senior citizen looking to secure a new place in the Land of the Midnight Sun, there are resources available for you.
The Cook Inlet Housing Authority has programs available to help eligible buyers find affordable housing or receive down payment assistance. The Cook Inlet Lending Center CILC offers personal finance forums, individual development accounts and first and second mortgage loans that reduce or eliminate mortgage insurance premiums.
Fairbanks Neighborhood Housing Services’ Homeownership Center can be a valuable resource for any stage of the homebuying process. It offers workshops for credit preparation, down payment and closing assistance and loans for maintenance or weatherization projects.
The Alaska Housing Finance Corporation also offers down payment assistance in the form of education. Its HomeChoice course is free and available to all homebuyers, and covers the steps and preparations that come with buying a house.
|Resource||Problem or Issue||Who Qualifies||Website|
|Alaska Housing Finance Corporation||Securing a loan or refinancing.||First-time homebuyers, purchasers in rural areas, or refinancers with or without AHFC loans.||https://www.ahfc.us/|
|Alaska Housing Finance Corporation - HomeChoice||Education for homebuyers.||Available to all home buyers - cuts down on closing costs if purchaser takes a course.||https://www.ahfc.us/buy/homechoice/|
|Cook Inlet Housing Authority||HUD Section 184 and down payment assistance.||Must meet eligbility requirements for down payment assistance and property eligibility varies depending on income.||http://www.cookinlethousing.org/|
|Fairbanks Neighborhood Housing Services||Down payment assistance, renovation loans and general education.||Anyone in the homebuying process.||http://www.fnhs.org/fairbanks_home_ownership_center.html|
|USDA Rural Development Housing||Offers payment assistance to increase an applicant’s repayment ability.||Applicants must be without decent, safe and sanitary housing; Be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet; Agree to occupy the property as your primary residence; Have the legal capacity to incur a loan obligation; Meet citizenship or eligible noncitizen requirements and not be suspended or debarred from participation in federal programs.||http://www.rd.usda.gov/programs-services/single-family-housing-direct-home-loans/ak|
|Home Affordable Refinance Program||Refinancing.||Single family homes and condos that fit within lending loan limits.||http://www.harp.gov/|
In Alaska, you may also qualify for assistance from the United States Department of Agriculture Rural Development. The program is intended to help rural communities by offering aid in securing safe, affordable housing. Loans and grants are available for people looking to purchase a new home or repair their current home.
Alaska Mortgage Taxes
Homeowners can deduct the mortgage interest they pay (up to $1,000,000) when they file their federal income taxes. In some states owners can double their deductions by including mortgage interest on state income taxes as well, but as Alaska is one of seven states that does not change an income tax, that system does not apply here.
In Alaska, there is also no tax charged on real estate property title transfers.
Alaska Mortgage Refinance
Refinancing in Alaska? There are a couple resources available to you. The Home Affordable Refinance Program of Alaska can help qualifying applicants gain access to interest and principal payment reductions and low closing costs. The Alaska HARP accepts single family homes and condos.
You can seek refinancing help from the Alaska Housing Finance Corporation, whether you’re an AHFC borrower or not.
Even if you don’t quality for one of these programs, you can work with the lender who issued your original mortgage, as well as other lenders to find a solution.
Best Places To Get A Mortgage
SmartAsset’s interactive mortgage map highlights the best counties in the country (and in each state) for securing a mortgage. Hover over counties and states to see data points for each region, or use the map’s tabs to view the top counties for each of the factors driving our analysis.
Methodology For many people buying a house means securing a mortgage. To determine the best places in the country to get a mortgage we looked at four factors: overall borrowing costs, ease of securing a mortgage, cheap property taxes and cheap annual mortgage payments.
To calculate the overall borrowing costs, we looked at the expected costs over the first five years of a $200,000 mortgage with a 20% down payment, including closing costs. We calculated the ease of getting a mortgage as the ratio of mortgage applications to actual mortgage originations (secured mortgages) in each county. We based annual mortgage payments on the annual principal and interest payments for a $200,000 loan in that location, using average mortgage rates in each county.
Finally, we ranked locations based on these four factors, and then averaged those rankings, giving equal weight to each factor. The areas with the lowest average rankings are the best places to get a mortgage.
Sources: Mortgage Bankers Association, US Census Bureau 2016 5-Year American Community Survey, Informa, Bankrate, government websites, SmartAsset