Best Mortgage Lenders for First Time Home Buyers in Alaska

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Contributor, Benzinga
February 13, 2024

Jump straight to it: The best Alaska mortgage lender for first time home buyers is Rocket Mortgage®.

Are you settling down and looking for your first house in Alaska? One of the first steps you’ll need to take is finding a mortgage lender. We’ll walk you through everything you need to know about the first time home buying process so you can find the best mortgage lender for your new home.

Quick Look: Best Mortgage Lenders for First Time Home Buyers in Alaska

5 Best Mortgage Lenders in Alaska for First Time Home Buyers

Now that you’ve brushed up on everything you need to know about mortgage types and first time homebuyer assistance programs, you can start searching for the right mortgage lender. To help you get started, we’ve listed some of the top lenders in the state and have broken them down into 6 simple categories.

1. Best Overall: Rocket Mortgage®

Rocket Mortgage® makes the first time home buying process easy with its intuitive, hassle-free online application. It also has a fast approval and verification process that helps speed up your mortgage application. If you have questions, they offer 24/7 customer service assistance.

Mortgage types offered: Conventional, FHA, USDA and VA

Credit score requirement: 620 (alternative credit considered)

Pros

  • Locked rate for up to 90 days on certain loan types, so you have time to shop for a home.
  • Work with loan officers by phone if you prefer
  • $1,000 closing guarantee with Verified Approval 
  • Rocket Rewards program means you can earn closing cost discounts by learning about the mortgage process
  • Get 1% of your down payment through the ONE+ if you qualify

Cons

  • Possible higher closing costs
  • No down payment or closing cost assistance 
  • No physical branches 
  • No stated preapproval or closing timelines

2. Best for Low Down Payments: guaranteed Rate

guaranteed Rate is a good option for anyone with a good credit score who doesn’t have a large amount of money to put down on a home. guaranteed Rate offers down payment mortgages with as low as 3% down and has an entirely online application process to speed up your loan application.

Mortgage types offered: Conventional, FHA, USDA and VA

Credit score requirement: 620

Pros

  • Nationwide online mortgage offerings
  • Branches in 47 states
  • Streamlined online mortgage application
  • Get sample rates for its loan products to start comparison shopping
  • No downpayment is required for USDA or VA loans
  • Minimum downpayment of 3% for conventional and 3.5% for FHA loans

Cons

  • No home equity loans
  • No branches in Delaware, Vermont or Wyoming

3. Best for Face-to-Face Experience: PNC

If you prefer to sit down with an experienced professional when filling out your mortgage application, PNC could be the right choice for you. PNC has locations throughout major cities in Alaska and offers online and in-person assistance. This lender can also help you if you’re facing credit or down payment challenges.

Mortgage types offered: Conventional, FHA, USDA and VA

Credit score requirement: 620 

Pros

  • Low-down-payment loan options
  • Excellent customer service reviews
  • A+ BBB rating
  • Lower-than-average interest rates
  • Potentially secure a jumbo loan with a 5% down payment

Cons

  • Slow service by phone
  • Borrowers with lower credit scores might not qualify
  • Physical locations not available in every state

4. Best for Loan Options: CitiBank Mortgage

  • securely through CitiBank's website
    securely through CitiBank's website
    Rating:

Citibank Mortgage is one of the top lenders in Alaska thanks to its top-level customer service and variety of mortgage options. If you aren’t sure what type of mortgage is best for you, you’ll find a large selection to choose from at CitiBank. They also provide down payment assistance and considered alternative credit.

Mortgage types offered: Conventional, FHA and VA

Credit score requirement: 620

Pros

  • Wide range of financial products and services offered
  • Competitive interest rates
  • Strong customer support and 24/7 assistance

Cons

  • Limited physical branch locations in some areas

5. Best for VA Loans: Veterans United

If you’ve logged some time in the military, Veterans United’s loans will likely be the best deal. Unlike other veteran-marketed loan programs, Veterans United only accepts active duty and veteran military members.

In addition to no-down-payment loans, you’ll also eliminate the private mortgage insurance you’ll have to pay with other mortgages.

Veterans United is also more forgiving of lower credit scores. Interest rates are lower than average.

Pros

  • Competitive interest rates and loan terms
  • Streamlined loan process
  • Provides educational resources and support for veterans and military members

Cons

  • Limited physical branch locations

The Housing Market in Alaska: An Overview

You need to understand the local housing market in Alaska before choosing your lender. To know the average prices of homes throughout the state helps you prepare for what you’ll pay when you finance your home. Here are some key facts:

Total households: 264,376

Median list price: $318,000

3 most expensive cities in Alaska to buy a house:

  • Sitka: $479,406
  • Juneau:  $461,470
  • Chugiak: 444,307

3 most affordable cities in Alaska to buy a house:

  • Palmer: $225,000
  • Knik-Fairview: $255,000
  • Badger: $236,000

Knowing the average home values will help you figure out how much you’re likely to pay for your new Alaskan home.

Preparing for a Mortgage

Before applying for a mortgage, you’ll want to understand the mortgage process. We’ll take you through everything you need to know so you can feel confident in your mortgage choice.

First Time Home Buyer Mortgage Process in Alaska

The first step in the first time homebuyer’s mortgage process is to assess your finances. It’s a good idea to take a look at some key factors so you know where you stand when comparing mortgage lenders.

You’ll want to:

Know Your Down Payment Limit

Different lenders have different down payment requirements, so you’ll want to understand how much of a down payment you can afford on your home. The higher the down payment, the lower your mortgage rate (interest rate). If you can’t afford a large down payment, you’ll want to find lenders who offer low down payment options or down payment assistance.

Know Your Credit Score

Lenders will use your credit score to understand how you handle debt. This helps them decide whether you qualify for a mortgage. Your credit score will also help set your mortgage rate. Typically, the higher your credit score, the lower your mortgage rate (interest rate).

What You’ll Need

Now it’s time to gather the items you’ll need to apply for a mortgage. Having these documents ready to go will save you time and help speed up the mortgage process.

You should find your:

  • Social Security number
  • Past 2 years tax information
  • Past 2 months of pay stubs
  • The total amount in all of your financial accounts (checking, savings, retirement and other investment accounts)

Other documentation may be needed depending on your lender’s requirements.

LenderMinimum Credit Score Required
Rocket Mortgage®620
CitiBankN/A (no set requirement)
guaranteed Rate620
PNC700

Mortgage Options

As a first-time homebuyer, it’s important that you know the different types of mortgages available in Alaska. We’ll run through the top 5 mortgage types that are most likely to apply to you.

Conventional Loan

Conventional home loans are financed through banks, credit unions and other financial institutions. These loans often have higher mortgage rates since they are not funded through the government. First time homebuyers often opt for conventional loans because of the low eligibility requirements and down payment options.

FHA Loan

FHA home loans are financed through the Federal Housing Administration (FHA) and are designed specifically for first time homebuyers. These loans often have below-market mortgage rates, low down payment requirements (as low as 3.5%) and low credit score minimums (as low as 580). You can apply for FHA loans through many conventional mortgage lenders.

USDA Loan

USDA home loans are financed through the U.S. Department of Agriculture for homes that are located in rural areas or anywhere outside of major U.S. cities. These loans often have below-market mortgage rates, no down payment requirements and low credit score minimums (as low as 640). You can apply for USDA loans through many conventional mortgage lenders.

VA Loan

VA home loans are financed through the U.S. Department of Veterans Affairs for homes purchased by current or former military personnel and their family members. These loans often have below-market mortgage rates, no down payment requirements and no set credit score minimums (except when set by a lender). You can apply for VA loans through many conventional mortgage lenders.

Jumbo Loan

Jumbo home loans can be either conventional or FHA loans that are used to buy homes over $484,350. This limit might change depending on where your home is located. These loans often have larger down payment requirements and higher credit score minimums. Many lenders want 20% down payments on jumbo loans, but some lenders, like Rocket Mortgage®, require only 10% down.

First Time Home Buyer Programs in Alaska

The Alaska Housing Finance Corporation (AHFC) has first time homebuyer programs set up to help you better afford your first home. These mortgage and assistance programs can often be used together or with other mortgage types, like conventional or FHA loans.

AHFC Tax-Exempt First Time Homebuyer Program

This tax-exempt mortgage program helps first time homebuyers in Alaska secure a low mortgage rate. There are income and home value limits set by the AHFC that you must meet.

AHFC Taxable First Time Homebuyer Program

This program is similar to the tax-exempt mortgage program and will help you lock in a low mortgage rate, without the income or home value limits.

AHFC Low-Income Borrowers Program

This program helps lower interest rates by 0.5% to 1% on mortgages for low-income homebuyers. This rate reduction only applies to homes under $180,000, but homes over this price can qualify for partial reductions.

AHFC Closing Cost Assistance

This assistance program provides 3%–4% in assistance for down payments or closing costs. There are no income limits but you need a credit score of 640.

Current Mortgage Rates in Alaska

The mortgage rate on your home loan is the interest rate you’ll pay during the lifetime of your loan. Locking in a low mortgage rate can save you thousands in interest on your mortgage.

How is your mortgage rate determined? Your lender looks at a few key factors when setting your rate: credit score, down payment amount, home location, mortgage type and mortgage term.

Your mortgage term refers to the length of your home loan. There are 2 main mortgage types, fixed and adjustable. With a fixed mortgage, you’ll pay a set amount every month for the lifetime of your loan. With an adjustable mortgage, you’ll often pay a set amount during your introductory period. After this period, your rate will fluctuate and so will the amount you pay each month.

Mortgage rates in Alaska vary depending on where you live and your local market. To help you get a better idea of common mortgage rates, we’ve compiled the most current information on mortgage rates in Alaska.

Loan TypeRateAPR
30-year fixed 6.827% 6.914%
15-year fixed 6.106% 6.246%
7/1 ARM (adjustable rate) N/A N/A
5/1 ARM (adjustable rate) N/A N/A
Rates based on an average home price of $300,889 and a down payment of 20%.
See more mortgage rates on Zillow

Closing a Mortgage

Once you’ve chosen a lender and have been approved for a mortgage, the final step in the process is closing. At this point, you’ll sign all major documents, take a final review of your information and verify the terms of your mortgage. Any closing costs (including your down payment) will be paid at this time. Lastly, you’ll receive the keys to your new home.

You can expect the closing process to take between 30–45 days, depending on your lender. Online lenders like Rocket Mortgage® can typically speed up this timeline, thanks to its quick approval and verification processes.

Here’s a look at some typical timeframes for the closing process in Alaska:

LenderAverage Days to Close Loan
Rocket Mortgage®30 days
Bank of America45 days
Flagstar30 days
guaranteed RateN/A (no closing date info available)

Get Ready to Buy Your First Home in Alaska

Remember, there’s no rush to buy your first home. Make sure you’re financially prepared before jumping in. Look for a lender who offers the incentives you’re most interested in, and take your time comparing lenders and mortgage types.

Frequently Asked Questions

Q

How do I get pre-approved for a mortgage in Alaska?

A

To get pre-approved for a mortgage in Alaska, first, you need to fill out an application and submit it to the lender of your choice. For the application you need 2 previous years of tax returns including your W-2’s, your pay stub for past month, 2 months worth of bank statements and the lender will run your credit report. Once the application is submitted and processed it takes anywhere from 2-7 days to be approved or denied. Check out our top lenders and lock in your rate today! 

Q

How much interest will I pay?

A

Interest that you will pay in Alaska is based on the interest rate that you received at the time of loan origination, how much you borrowed and the term of the loan. If you borrow $208,800 at 3.62% then over the course of a 30-year loan you will pay $133,793.14 in interest, assuming you make the monthly payment of $951.65. For a purchase mortgage rate get a quote here. If you are looking to refinance you can get started quickly here

Q

How much should I save for a down payment?

A

Most lenders in Alaska will recommend that you save at least 20% of the cost of the home for a down payment. It is wise to save at least 20% because the more you put down, the lower your monthly payment will be and ultimately you will save on interest costs as well. In the event that you are unable to save 20% there are several home buyer programs and assistance, especially for first time buyers. Check out the lenders that specialize in making the home buying experience a breeze. 

Get Ready for Take Off

Rocket Mortgage® is an online mortgage experience developed by the firm formerly known as Quicken Loans®, America’s largest mortgage lender. Rocket Mortgage® makes it easy to get a mortgage — you just tell the company about yourself, your home, your finances and Rocket Mortgage® gives you real interest rates and numbers. You can use Rocket Mortgage® to get approved, ask questions about your mortgage, manage your payments and more.

You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.