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3 Things To Know Before Purchasing A Waterfront Property

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Living on the water, whether it's lakefront or beach adjacent, is a dream for many home buyers. These homes are sought after throughout many parts of the country and often sell at a premium. Purchasing a waterfront property is a big investment and requires a great deal of forethought. Nationally waterfront homes will cost an average of double what regular homes will cost in the same area. Before investing in waterfront homes, here are three things that should be considered carefully.

Get Loan Approval Early

Since waterfront homes are often much more expensive than other homes, larger loans may be needed. For this reason, it is a good idea to have financing in place before making an offer or even before looking at properties. Often a jumbo mortgage loan is needed for many waterfront properties. These jumbo loans are ones that exceed $417,000 in most states. These loans often require higher down payments, credit scores above 700, and a debt-to-income ratio of less than 43%. Potential buyers of waterfront properties should make sure that they qualify for a larger loan since there is a good chance it will be necessary in many areas.

Added Costs

There are also other things to consider when purchasing a waterfront home. There are plenty of added costs that many may not expect. One of the biggest issues is maintenance. Maintaining a waterfront property can be far more expensive than maintaining a land locked property. Things like boat docks can be expensive, simply getting one repaired costs on average $525 to $1,472. Doing work near the waterfront may involve the need for expensive permits. Even something as simple as landscaping near the water may involve permits and a thorough check of zoning laws.


Another thing to look into before purchasing a waterfront property is insurance costs. Waterfront homes, especially beachfront properties, can be much more expensive to insure than other homes. Often these homes are more prone to damage from storms due to their proximity to water. It can also be more expensive if the home is a second property. The National Flood Insurance Program charges higher premiums on second homes in addition to a $250 surcharge. It's not only flood insurance that's more expensive, homeowner's insurance can also cost more than it would for other properties.

Purchasing and living in a waterfront home can be very enjoyable. However, there are a few things potential buyers should consider before taking the plunge. Larger loans are often needed for these properties and it can take time to be approved for a jumbo loan. There are also plenty of added maintenance costs associated with waterfront homes. Higher insurance premiums are also usually a given. Before purchasing, these are all things that should be considered carefully in order to ensure that a waterfront home will be affordable. 

For more information, contact companies like Ross Nack Road LLC.