Alaska is known to many as a cold state full of nothing but snow and long, long winter nights. As Alaskan residents know, the state actually has a lot more to offer than meets the eye. As America’s largest state, Alaska is home to the country’s largest national parks, longest coastlines, and some of the most breathtaking natural landmarks in the world. 

For many, owning a home in Alaska may seem out of reach. Data from the Alaska Department of Labor and Workforce Development shows the average sales price for single-family homes is $388,648 as of 2021. Nonetheless, the state had one of the fastest growing rates of homeownership in the country between 2019 and 2020 at 3.4%.  

Doctors and dentists who want to purchase a home in Alaska have the opportunity to participate in the state’s physician mortgage loan program. These programs allow the 2,000+ doctors in Alaska to purchase a house with a minimal down payment or none at all. Loan amounts, interest rates, and other lender rules will vary, so do your research in advance to find the best fit for you once you’ve located your dream property on the NMLS. The home buying process can help you start off in your new location based on a health care services role. Qualifying physicians moving to the state of Alaska can find a new home and finance it through the physician home loan process.

Alaska physician loans: Weighing the pros and the cons

Doctor mortgages available in Alaska provide many professionals in the “Last Frontier” with the financing they need to purchase their primary home. As with any big financial decision, it is always a good idea to consider both the pros and cons before moving forward. Providers who have job offers as future full-time health care professionals can get a lot of benefits as borrowers when they understand the physician home loan opportunity.

Borrowers like new clinicians will have to provide their full contact information and the contact details for their new employer, too. Physician loans are a possible option for many different clinicians, such as those working in primary care, behavioral health, emergency care, and outpatient services.

What are some of the pros associated with Alaska physician loans? It makes for a pretty impressive list, and includes:

• Little or no money down
• Higher limits compared to conventional loans
• No Private Mortgage Insurance (PMI)
• Student debt will not impact your eligibility

There are some downsides to consider, too. These unique challenges might be outweighed by the benefits of purchasing real estate with a physician home loan. When deciding whether or not an Alaska doctor mortgage is right for you, remember that they can involve:

• Taking on more debt
• Higher allowable rates, on occasion
• A bank expecting that you will become a customer (i.e. open an account)

Given the high limits on these financial products, Alaskan doctors and dentists taking out these loans could potentially commit themselves to more house than they need or can adequately budget for.

Is an Alaska physician mortgage loan a good idea for you?

Is an Alaska doctor mortgage the right option for you? There are a few questions you can ask yourself when making this decision. 

First, consider whether it is the best time for you to buy. Ask yourself:

• Is your job one you foresee yourself staying with in the long term? Over time, even the best job may not be the best fit. It can take more than two years to determine whether you are in a job you want to commit to for years to come. If you are just starting a position, it may not be the right time to commit to a home purchase. 
• How much home can you afford? Putting 0 down on a home can also make you feel like you can afford more house than you should. Financial experts often advise keeping a home purchase to around two times your annual salary. Committing to a doctor mortgage in Alaska comes with a lot of benefits, but you don’t want to get into a scenario where your mortgage becomes unaffordable for you. 
• Is getting the lowest rate important to you? Some professionals considering these loans may also want to find the lowest rates possible. Since conventional loans with 20 percent down are usually the best answer to finding a low rate, some doctors may want to forego a physician mortgage, save toward that down payment and get that lower rate. 

Of course, while a physician loan in Alaska comes with some compromises, you do get to establish a solid, long-term relationship with a bank. After all, banks created these products in order to do just that with professionals like you. Entering into one of these mortgages can leave you with a strong financial product throughout your life and career.  

Examples of Alaskan doctors using physician loans

Who are some of the doctors in Alaska taking advantage of physician mortgage loans? The following narratives are good examples of the professionals who are ideal matches for a doctor mortgage. 

Physician who hasn’t saved up a down payment

Ed committed a lot to becoming a doctor, taking out big student loans and working hard at school. Now that he is starting a residency in orthopedics at Providence Alaska in Anchorage, it seems clear that his career is on track and he will soon be earning an impressive salary. 

The problem is that Ed has very little money to put down on a traditional mortgage. An Alaska bank that is known for their physician loans seems like the best way forward; he can get that mortgage with no money down and will likely have a good financial partner in that bank as his career flourishes. 

Dermatologist who wants to maximize leverage

Maxine has established one of the most popular dermatology practices in Anchorage and has managed to build up her savings. A few years back, she invested part of her savings in a portfolio, and it has been performing reliably. She wants to maximize her leverage and keep her investments in place for the time being. Rather than liquidate those holdings to get the cash for a down payment, Maxine decided to go with a doctor mortgage with no money down from a prominent local lender. 

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