Everything You Need to Know About Buying a House in Alaska

Buying a home in Alaska is a great choice for homeowners who are looking for beautiful landscapes and a slower-paced lifestyle.
Written by Aimee Lynn Everett
Reviewed by Melanie Reiff
If you are looking for stunning landscapes, wide-open wilderness, and aren’t worried about getting a little cold,
is a great place to buy a home.
If you are a first-time homebuyer or are new to buying a home in Alaska, figuring out where to start can be hard.
Luckily, insurance broker app
has created this guide to help you follow your dream of owning a home in Alaska. From how to understand your financial situation and get a mortgage to what to consider when deciding what city is best for you, we’ll highlight everything you need to know about buying a house in Alaska.
Let Jerry find your price in only 45 seconds
No spam · No long forms · No fees
Find insurance savings (100% Free)

Figure out your finances

If you are ready to chase your dream of living in Alaska, you’ll have to first spend some time to get a clear idea of your financial situation. Your credit score, debt-to-income (DTI) ratio, and the fees associated with buying a house will all impact the kind of house you can afford. It is important to fully understand each factor before you set off on a house-hunting expedition in Alaska.

Check your credit score

Your credit score plays one of the most important roles in the home buying process. To qualify for a standard mortgage, lenders typically look for a credit score greater than 620.
If your score is not quite there, your Alaskan dreams don’t have to end yet. You have two options if you are starting your house-hunting process with a low credit score:
  • Building your credit:  If you are still working on saving up for a down payment, you may want to take some extra time to increase your credit score so that you can qualify for a standard mortgage.
  • Choosing a low-credit loan: The Federal Housing Administration (FHA) and Veterans Administration (VA) both offer low-credit mortgage options to homebuyers in Alaska. You can be qualified for an FHA low-credit mortgage with a credit score as low as 530, while you only need a 500 score to qualify for a VA low-credit mortgage. Loans from the VA are only available to active duty service members and veterans.

Calculate your debt-to-income (DTI) ratio

Lenders also will use your debt-to-income ratio—or DTI—to determine whether or not you qualify for a standard mortgage, so it is important to understand your DTI before you begin searching for houses.
To calculate your DTI, add all of your monthly payments together and divide the total by your pre-tax monthly income. Payments that count toward your monthly payment total include:
  • Rent or house payments 
  • Car payments
  • Credit card payments
  • Student loan payments
  • Alimony or child support
A lower DTI is better, and the ideal DTI, if you are looking to buy a house, is lower than 36%. If your DTI is higher than this, it may not be a deal-breaker for a potential lender, but a DTI of 50% or higher will make buying a house in Alaska difficult. You can reduce your DTI by either increasing your income or paying off some of your debts.

Determine your down payment

The down payment is the amount of money you’ll pay upfront when you buy a house and depends on the cost of the house you are buying and the type of mortgage you have. 
Calculating your potential down payment is important in figuring out what type of home is realistic for your budget because it is the largest payment you’ll make when buying a house.
With a standard mortgage, it is typical to have to pay 20% of the value of the house as a down payment. With an FHA or VA mortgage, your down payment will be significantly lower, potentially falling as low as 3.5% or 0%, respectively.

Prepare for closing costs and other fees

A house's closing costs are a collection of payments, taxes, and fees that are necessary during the home buying process. They usually total between 2% and 5% of the total cost of the house and include:
  • Home appraisal fee
  • Credit report fee
  • Home inspection fee
  • Mortgage origination fee
  • Earnest money (i.e., a good-faith deposit that will go towards your down payment)
  • Mortgage insurance
  • Property taxes
  • Homeowners insurance
According to
Zillow’s Home Value Index
, the average price of a home in Alaska is $311,083. Based on this price, closing costs in the state can potentially run between $6,222 and $15,554.
For low-to-moderate income or first-time home buyers, paying both a down payment and closing costs upfront can make owning a home feel out of reach. However, there are many assistance programs available to potential Alaska homeowners through statewide, regional, and local programs to help cover closing costs or other home-buying expenses.
Key Takeaway The up-front cost of buying a home can be as much as 25% of the house’s value, but there are mortgage options and assistance programs to reduce the initial cost of homeownership in Alaska.

Look for homeowners insurance

While homeowners insurance is often lumped in with your new home’s closing costs, it is a recurring cost of owning a home. The average cost of homeowners insurance in the US is $1,387 per year, which breaks down to $115 per month, but Alaskan homeowners may pay less than average depending on where they live.
The key to getting the best homeowners insurance rate in Alaska is to shop around for the cheapest quotes. If you own a car and choose a homeowners policy from the same company, you may be able to
bundle them and save money on both
To simplify the search for the right homeowners insurance, let insurance broker app
do the work for you by quickly gathering quotes from 50+ top insurance companies so you can protect your house for the best price.
Key Takeaway To understand how your mortgage options will affect your down payment and closing costs on a home in Alaska, it is important to start the home buying process by taking a look at your finances, credit score, and DTI. 

Get preapproved for a mortgage

Once you have a better idea of what type of house you can afford and what your best mortgage options are, you’ll need to get a mortgage preapproval before you start looking at houses.
Getting a letter of preapproval from a lender will set you up well for negotiating success when you are ready to make an offer on a house—some sellers won’t even show you their property unless you are already approved for a mortgage.
To get preapproved for a mortgage, you’ll have to:
  • Provide your social security number to the lender
  • Provide information about your employment history, assets, debts, and bank
  • Fill out a mortgage application
It’s important that you don’t seek preapproval on a mortgage until you are ready to start looking at houses
A lender will perform a hard credit check to determine whether you qualify for a mortgage, which can lower your credit score for a period. If you try to get approved for a mortgage twice in a short timeframe, it may hurt your chances of getting the mortgage option you want.

How to pick the right mortgage in Alaska

There are two things to keep in mind when you are deciding how you want your mortgage to be structured: mortgage term and interest rate.
The most common mortgage terms—or how long you have to pay back your mortgage—are 15 years and 30 years. With a longer mortgage term, you will decrease your monthly payments but increase your interest rate to about 3.5%. On the other hand, a shorter term will increase your payment amount, but you will only have about a 2.5% interest rate.
The best way to determine the mortgage in Alaska that is right for you is to compare the options from multiple different lenders.

Look for a house

Now that you know what you can afford and have secured preapproval for a mortgage, you are finally ready to start searching for a house to call your own in Alaska! 

Pick your city and neighborhood

To narrow down the area of Alaska that you want to start looking in, consider the culture, cost of living, and lifestyle you are looking for. For many people, the prime thing that draws them to Alaska is its remoteness, but this also makes proximity to stores, hospitals, and other community necessities a big consideration when you are searching for a house.
Because of its climate and distance from the lower 48 states, the cost of living in Alaska is generally pretty high, but living in certain cities can be even more expensive. For example, Kodiak is one of the most expensive cities in the state since located on an island off the southern coast of the state. Anchorage, Sitka, Homer, and Juneau also have some of the highest costs of living in Alaska.
While living in Alaska can be expensive, a perk of living in the state is that you get to claim a portion of the
Permanent Fund Dividend (PFD)
every year. The PFD is an annual dividend that is funded by state mineral royalties, and in 2021, each eligible Alaskan’s portion of the fund was $1,114.

Buyer’s market vs seller’s market

Another thing to consider when you are shopping for a house in Alaska is whether the area you are interested in is currently a buyer’s market or a seller’s market.
A buyer’s market is when the demand for houses is lower than the number of houses being sold. A sure sign of a buyer’s market is that many homes are sitting for sale for a long time, which can give you a leg up in negotiating a lower price when you decide to make an offer.
In a seller’s market, there are more buyers than there are houses on the market. This means that houses sell quickly and often for higher than the initial asking price. If you are shopping in a seller’s market, it’s important to quickly make a strong offer when you find a house you want to buy.

Find a real estate agent

You can choose to do all of the time-consuming—and sometimes frustrating—work of contacting sellers, setting up appointments to view houses, and submitting the paperwork to make an offer or close a sale. Or, you can hire a real estate agent to take care of all of that for you.
Especially if you are new to the Alaska real estate market, having a real estate agent can make the process much easier. It is important to hire an agent who not only is familiar with the area but is a prompt communicator and understands what you are looking for in a house.

Make an offer

When you find the Alaskan house that’s right for you, it’s finally time to make an offer! Your real estate agent can give you advice about how much you should offer based on the market conditions in the area, contact the seller’s agent, and help you submit all the necessary paperwork.

How to save on homeowners insurance

Buying homeowners insurance might not be one of the most exciting parts of buying a house, but you’ll need it to protect your new house in case of damage or a disaster.
The easiest way to shop around for
homeowners insurance
is to let insurance broker app
do all the shopping for you. All you have to do is answer a few questions and Jerry will take care of the rest, getting you competitive quotes from top insurance companies to get you the best policy at the best price.
“It was my first time buying insurance. I expected the worst, to be honest. And then I found
. It’s an amazing app that’s super easy to use. It saved me so much time and energy.” —Simon M.


The amount of money you need to buy a house in Alaska will depend on the type of mortgage you can get, where you’re buying, and how much you can pay for a down payment. On average, you’ll want to have 25% of a house’s value set aside for initial costs before you buy it.
To qualify for a standard mortgage, you’ll need a credit score of 620 or higher. If your score is in the 500s, you may still qualify for a low-credit mortgage from either the FHA or VA.
From extremely remote locations to mid-sized cities, there are a lot of options when it comes to where to buy a house in Alaska. Some of the most affordable places to live in the state are King Cove, Hooper Bay, Sand Point, and North Pole, while living in Ketchikan, Homer, Sitka, Kodiak, and Anchorage will cost you more money.
Save an average of 18% by bundling your home and auto insurance
Bundle your home and auto insurance with Jerry and save!
Try Jerry (It’s 100% Free!)

Browse Questions from Car Experts

Easiest way to compare and buy car insurance

No long forms
No spam or unwanted phone calls
Quotes from top insurance companies
Find insurance savings — it's 100% free