Interest Rates Still Affordable for Home Buying in Anchorage, Alaska

Posted by Dan Wolf on Friday, September 20th, 2013 at 8:41am.

If you're interested in home buying, you may have gotten worried at the upward crawl of mortgage interest. Higher rates can be a problem if the trend continues. But right now in Anchorage, interest rates are still near historic lows. Your eventual monthly payment depends on whether you go for a fixed-rate or adjustable-rate mortgage. The Fed met just last week and agreed to continue to buy bonds and hold rates at the current levels to further stimulate the economy.

The following examples, from Bankrate, assume a $320,000 loan with 20 percent down, no points, and a credit score of 740 or above, which is excellent. Your actual payment will differ according to your situation.

Fixed-Rate

These mortgages are called “fixed” because your interest rate and monthly payments remain the same for the entire loan term. Qualifying for such a loan may be slightly more difficult than for other types because of the slightly higher interest rates.

The 30-year term is the most common and it averages 4.72 percent across the country. In Anchorage, interest ranges from 4.42 to 4.84 percent, which yields monthly payments of to $1,598 to $1,681.

The 15-year term has lower rates but higher payments. You spend less overall due to the shorter term. The national average is 3.74 percent with a city range of 3.42 to 3.94 percent. Monthly payments go from $2,268 to $2,351.

Adjustable-Rate

More commonly known as ARMs, adjustable-rate mortgages tease you with a rate that's generally one percentage point lower than fixed-rate options. But the low interest is good only for a specified period. It then adjusts continuously over the life of the loan, typically requiring higher payments than during the teaser period.

A 5/1 ARM fixes rated only for five years and then adjusts every year. The national average is 3.65 percent and ranges from 2.95 to 3.18 percent in Anchorage. Estimate payments range from $1,328 to $1,528.

You don't want to wait if you decide to buy a home or rising rates may put mortgages out of reach. Contact us today to see how we can help you.

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