A Few Costs to Consider When Looking at Island or Beach Homes
Most people dream of a beach or island house, and an estate on Fripp Island right off the coast of South Carolina may be ideal for you and your family. That being said, there are some things you will need to consider before you take the plunge and start scheduling home tours. This is especially true when it comes to extra expenses. Keep reading to learn about a few.
Flood Insurance
If you have ever purchased a coastal home, like one in the Florida gulf, then you may be extremely familiar with the costs associated with purchasing flood insurance. If you have never lived on the beach, then you may not have had to purchase the insurance before. Flood insurance is not always included on a typical home insurance policy, meaning that you will need to purchase separate coverage.
The average flood insurance policy costs about $700 per year. However, the cost is directly related to your home's flood risk. So, if you live on an island or directly on the beach, your risk will be high. Your policy may then be over $2,000 a year.
You should understand this insurance cost. Also, if you decide to purchase the beach house and buy the insurance policy, make sure that the policy covers your home, property, and all of your possessions. This may mean getting a policy that covers well over $250,000 worth of costs.
Mortgage Costs
It goes without saying that beach and island homes cost a great deal more than traditional houses. This is to be expected, and you can also expect a bidding war since the homes are always in demand. If you are well aware of this, then you may be willing to pay $1,000,000 or more for the home.
If you have awesome credit, a hefty bank account, and a good job, then you may have no problem acquiring a mortgage. However, you should shop around for prequalifications beforehand. One thing that you may not consider is the interest rate and how it can substantially raise a payment on your $1,000,000 home. For example, a 1% increase on the rate can easily raise your payment by $1,000 a month. You can see how an interest rate that is only 2% or 3% higher than you expect can make your dream home financially unmanageable.
Of course, if you truly want your house and are concerned about costs, then you can rent the home for a portion of the year. You could see a high return on investment (ROI), and get a bit of help with your mortgage, by renting for a few months or even half the year.
If interested in purchasing an island/beach home, you can look up fripp island homes for sale.
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