Do You Need Private Mortgage Insurance?

Do You Need Private Mortgage Insurance?

What You Should Do Before Buying A Waterfront Home

by Luke Fields

Purchasing a property is a massive investment, so it's important for buyers to be educated. However, when it comes to purchasing waterfront homes — education is essential. A lack of knowledge can cause all sorts of issues, including forcing you to spend more money than you had planned in the long term. Here is what you need to know before you buy a waterfront property.

Secure Loan Approval First

Waterfront property is a more sizeable investment than an inland property, which means that they often come at a higher cost. For this reason, the loan approval and underwriting processes for securing financing for a waterfront property often come along with greater scrutiny than a landlocked property. 

With that being said, a buyer can be approved for an inland property, but denied for waterfront property. To ensure you can afford the home you fall in love with, get approval for a loan for a waterfront property first.

Include the Cost of Adequate Flood Insurance

If you carry flood insurance on your inland property now, don't expect that your experience will be the same when it comes to waterfront property. Waterfront properties require a special type of flood insurance that is often costly to secure. 

As you shop for a home, you should include the cost of this insurance in your overall budget. If you know what area you want to purchase in, you should be able to get a general idea of how much this coverage will cost you.

Make Sure the Home is Water Safe

Don't ever make the assumption that because a home is on the water, all of its fixtures can withstand regular exposure to water. This step is especially important if you plan to live near saltwater. As the wind blows, salt from the water will separate and become airborne, and some of it will land on the house. 

Any metal surface on the home that is not stainless steel is subject to corrosion from the salt. As you tour the home, look around for any signs of this problem. If you notice this issue, consider it a red flag, as it could signal replacement or repair costs that you will have to incur in the future.

It's critical you be prepared for the purchase to ensure you buy a waterfront home you love. Speak with a real estate professional who can help you with your preparation and the buying process. 


About Me

Do You Need Private Mortgage Insurance?

Welcome to my website. My name is Larry Silva, and I want to talk a bit about private mortgage insurance. You may have heard the term PMI mentioned when you were in the process of purchasing real estate. When I first heard my lender talking about PMI, I was very confused. It was my realtor who sat me down and explained what private mortgage insurance was and when someone is required to purchase it. He told me that PMI is not lifelong insurance; it can be cancelled when the mortgage principal balance reaches a certain point. Once it was explained to me, private mortgage insurance was no longer a mystery or a confusing concept. I would like to pass on what I learned and hope that you find it to be of value.