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

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