Despite the bust in oil prices in 2014 and 2015, the housing market in Alaska remains stable, with prices continuing to climb from their 2012 lows. Anchorage, which contains more than 40% of the state’s population, has a diverse economy. However, continued oil price uncertainty and the effects of a shrinking population could lead to slower housing growth in the future. With a median sale price of $268,000, Alaska homebuyers are paying well above the national average for a home. However, for closing costs on their home purchases, they are paying near the national average.

Average Closing Costs in Alaska

The following closing costs are based on the purchase of a $200,000 home with a 20% down payment. In Alaska, homebuyers pay an average of $935 for lender fees and $922 for third-party fees, for a total average cost of $1,857. The national average is $1,847, with the most expensive states, Hawaii, New Jersey and Connecticut – costing more than $2,000, and the least expensive states – Ohio, Idaho and Wyoming costing less than $1,700.

On average, borrowers pay the lender $100 for document preparation, $983 for the origination fee and $75 for tax services. Third-party fees include $616 for an appraisal, $433 for closing or settlement, $21 for credit reports, $10 for flood certification, $125 for pest inspections, $100 for postage or couriers and $500 for a survey. Title insurance fees are not included in these averages due to the fact that lenders have a difficult time in estimating them, but they can add as much as $1,000 to the final closing costs. Homebuyers must also pay out of pocket to fund impound accounts for property taxes and homeowners insurance.

What Goes Into Closing Costs?

Closing costs in Alaska can vary across the state, based on the lender and the type and size of property. However, these are the more common closing costs homebuyers will find in a good-faith estimate provided by lenders.

Loan origination or lender fees: Lenders perform a range of services in processing the loan, for which they charge an all-inclusive fee of 1% of the home’s value. The fee is expressed in “points" and each point represents 1%. Discount points can be added to the closing cost, should the buyer wish to lower the loan interest rate.

Appraisal fee: All lenders in Alaska require an independent home appraisal to verify that the property value is in line with the sale price and that it is reasonable when compared to similar homes in the area. The appraisal fee is paid at the time of closing.

Settlement/closing fee: In Alaska, a title agent is responsible for handling the legal aspects of settling escrow. Homebuyers can hire their own attorneys to review the settlement, but it is an added cost.

Survey: Depending on the type of property and its location, some lenders may order a property survey to verify property and building lines. The purpose is to avoid any property line issues that might arise in the future.

Tax services: In Alaska, tax liens take precedence over first mortgages in the event of a default. Depending on the amount of the down payment and the value of the home, some lenders may set up a property tax impound account, which it monitors to ensure that tax payments are current.

Title insurance: Homebuyers are responsible for purchasing title insurance coverage on the lender to protect it against any title defects and ensure its position as the top lien holder. The seller is responsible for purchasing a title insurance policy on the buyer to guarantee a clear title on the property.

Arizona (AZ): Average Closing Costs

Related Articles
  1. Personal Finance

    How To Negotiate Your Closing Costs

    Closing costs can't be avoided altogether, but you can lower them. While there are a lot of fixed costs, there are also variable ones you can save on.
  2. Investing

    Understanding The Escrow Process

    Learn the 10 steps that lead up to closing the deal on your new home and taking possession.
  3. Personal Finance

    Car Title Loan Requirements

    Here's a list of what you need to qualify for a car title loan. Most important: having sole ownership of your car with no liens.
  4. Insurance

    How to Decide if Title Insurance Is Worth the Cost

    Most people don't understand the critical role title insurance plays when buying a home.
  5. Personal Finance

    Understanding escrow

    Are you in the process of buying a house? Here is everything you need to know about the escrow process, a step-by-step guidance of buying a home.
  6. IPF - Mortgage

    What Are the Main Types of Mortgage Lenders?

    Shopping for a mortgage lender can feel confusing and a little intimidating. Understanding the differences among the main types of lenders can help you narrow down the field.
  7. Insurance

    5 Mistakes to Avoid When Buying a New Home

    Don't make these common blunders on your way to buying a new home.
  8. Personal Finance

    How to Sell a Car With a Lien

    Vehicle owners wondering how to sell a car with a lien on the certificate of title have four options to both remove the lien holder and transfer ownership.
  9. Personal Finance

    10 Frustrating Things Standing Between You and Your Mortgage

    If you know about the common challenges ahead of time, you can be prepared for them, and in some cases, even avoid them.
Frequently Asked Questions
  1. What's The Put-Call Ratio and Why It's Important?

    The put-call ratio is used by investors to gauge market sentiment and as a contrarian indicator. The ratio measures the number ...
  2. Why did the New York Stock Exchange report prices in fractions before it switched to decimal reporting?

    Before April 9, 2001, prices on the New York Stock Exchange were denominated in fractions - in one-sixteenths to be exact.
  3. Which Transactions Affect Retained Earnings?

    Retained earnings is the cumulative total of earnings or net income that have yet to be paid to shareholders. Retained earnings ...
  4. What is the difference between derivatives and options?

    A derivative is a financial contract that gets its value from an underlying asset. Options offer one type of common derivative.
Trading Center