Mortgage in Alaska
Alaska is a beautiful state with plenty of trees, water, and wildlife. Despite its reputation as a place with a bitterly cold climate, some cities within the state, like Anchorage or Juneau, have relatively lovely weather. Even though it's somewhat remote, housing costs in Alaska are relatively high.
Mortgages in Alaska are relatively straightforward. Here's what you need to know before you seek a pre-approval.
Alaska Mortgage Calculator: What Types of Mortgages Are Available?
If you're trying to buy a home in Alaska, you will have three primary mortgage types. You can explore which one is most cost-effective using the Alaska mortgage calculator.
- Alaska conventional mortgage: This option is the most straightforward. You'll need at least a 620 credit score, but you'll get the best offers if your score is 740 or higher. You'll need a debt-to-income ratio below 43%, and you'll need to pay private mortgage insurance if you have less than 20% down. One nice thing about Alaska is that the conforming loan limit is $822,735. That's the maximum that Freddie Mac or Fannie Mae will guarantee. You can buy a house up to that amount with fewer roadblocks.
- Alaska FHA mortgage: FHA mortgages are perfect for first-time homebuyers. They can have as little as 3.5% down. Your credit score needs to be above 580. If it isn't, then you'll need 10% down. The only downside to these loans is that you must pay PMI for the entirety of it. However, you can always avoid PMI once you have 20% equity by refinancing into a conventional loan.
- Alaska VA mortgage: Although this loan option typically requires a 660 credit score, it's the best option for qualified veteran borrowers. There's no PMI, and you can have as little as 0% down. It's a near-perfect mortgage!
Once you reviewed the loan types, you can then use our Alaska mortgage calculator to find the perfect combination to have a sustainable monthly payment!
First-Time Homebuyers in Alaska
If you're a first-time homebuyer, there are three primary programs that you can take advantage of through the Alaska Housing Finance Corporation.
For eligible borrowers, this program offers an interest rate reduction. There are no maximum income limits of acquisition cost restrictions.
Eligibility Criteria: You must be a first-time homebuyer, defined as someone who has not owned a home within the past three years.
First Home Limited is similar, but it offers an even more significant rate reduction to qualified buyers. Unlike the First Home option, there are income restrictions with First Home Limited.
Eligibility Criteria: You must earn less than a certain amount to qualify. That amount will vary based on where your future residence is. You must also buy an eligible property.
Alaska has a program to provide a competitive 30-year fixed-rate loan to help with closing costs. The amount of assistance is up to 4% of the initial principal balance.
Eligibility Criteria: You must have a minimum credit score of 640. There are no other restrictions.
Alaska Mortgage Calculator: Verify Your Mortgage
Using the information above, you can play around with the Alaska mortgage calculator to find a mortgage length, rate, and type that will work for your budget!