More Frequently Asked Questions

How easy is it to get insurance on a beach cottage?
North Carolina receives almost as many landfalls from hurricanes as Florida but insurance is still available for Outer Banks homes. Most homeowners carry three types of insurance. The typical homeowner’s policy that covers fire, liability and theft is easily obtainable from many local agents. Wind and hail policies usually come from an insurance pool available to coastal North Carolina property owners called the “beach plan”. Flood policies that cover damage from rising waters are required by lenders for homes located below the 100 year flood plain. Fortunately flood insurance is subsidized in most areas by FEMA and is reasonably priced. Insurance costs here compared to many less threatened inland areas are close to double. Fortunately, the Outer Banks has lower property taxes because second home owners do not require as many governmental services as a year round resident.


Why is spring a good time of year to buy a vacation home?
Most rental companies begin disbursing rental funds in the winter making cottages easier to carry than first thought. When closing on a property this time of year you will likely get back rental proceeds for the summer rentals. Also, this is the time of year that is great for using it yourself. Waiting until the fall gives a new owner time to fix up their property before the next rental season but you have to carry the property through part of the winter before getting any rental income. This spring has an extra advantage of buying. As of this writing, interest rates are hovering around 5% making beach property much more affordable. Consider a purchase this spring while interest rates are still great!

Is it hard to get a loan for a beach property?
Years ago during the boom it was too easy to get a loan for a beach cottage. Lenders now have stricter guidelines for lending money. However, if you have good credit, a decent down payment and your debt to income ratio is low you should have no problem qualifying for a loan. The best thing to do is contact a local lender who can pre-approve you. In just a few minutes they should be able to tell you if you need to improve in one of these areas and/or give you an idea of a good price range of properties to consider.