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How to Know if You Can Afford a Beach House

If you're looking for a summer getaway for you and your family, this guide will let if you know if that little slice of heaven is within your budget.


  • Step 1: Consider if you have bigger financial obligations coming up, such as paying for a son or daughter's college education, a new car, or even improvements to your current home.
  • Step 2: Compare several properties or options. Factor in all the added costs and hidden fees to see which is the best option that fits in your budget. If what you can afford matches your dream, you may be on your way to beachfront relaxation.
  • FACT: In 2010, a 27-year-old graduate student from Australia paid nearly $27,000 for a private island that exists only in a video game.
  • Step 3: Calculate the amount of savings you can devote to the property. Most lenders want at least 10 percent down, but having a 20 percent down payment helps you avoid having to pay mortgage insurance.
  • Step 4: Factor in traveling costs like airfare and driving time when trying to find your perfect secluded bungalow.
  • Step 5: Research any hidden fees associated with each of your choices of property. Look for maintenance fees, security, and closing costs to get a rough estimate of the monthly expense.
  • TIP: Vacation homes in Florida or along the coast may require expensive hurricane or flood insurance.
  • Step 6: Use a calculator to compare your monthly debt to your gross income. If your debt load is above 40 percent of your income, a second home may be out of your budget.

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