Is a waterfront vacation home in your future?
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When you close your eyes, do you picture warm sand between your toes and ripples of cool water splashing your feet? Or do you imagine reclining on a dock, soaking in a sweet breeze rolling off boat-dotted waters? Maybe a wraparound porch with a hammock and the soft lull of waves as you drift off to sleep?
When you daydream about vacation time, where do you see yourself?
Instead of visiting a travel agency to spend thousands of dollars for a hotel trip to the seaside, you could invest in your own beautiful waterfront vacation home in Michigan and enjoy a calming sanctuary for years to come.
If you're a Michigander, you may already have the perfect Michigan water spot picked out. While it may seem like an easy choice, there are many things to consider before you invest; and knowledge is your greatest strength when buying a home of any kind, but particularly on the water.
Near or far
With Michigan's abundance of inland lakes and rivers—not even counting the Great Lakes—there certainly isn't a shortage of waterfront property options. Beloved towns on Lake Michigan, such as Saugatuck and Traverse City, offer unique art festivals along with well-manicured beaches, while the Grand Rapids area provides a more metropolitan ambiance with plenty of shopping, dining and entertainment to accompany its nearby coastal getaways. If you prefer a small-town vibe and more privacy, then look into inland lake properties around Houghton Lake or Lake Charlevoix.
The distance from your permanent residence to your vacation home might determine how often you visit and how long you'll be able to stay. A home farther away could mean fewer but longer vacations so it is worth discussing. It's important to plan realistically with your family about how you'll use your vacation home and whether you will be sharing it with extended family members who will need to weigh in on any decisions on location.
Relaxation or extreme water fun?
For watercraft lovers, the Mitten State is hard to top. According to Lake Homes USA, Michigan boaters can water ski, tube, jet ski and boat across 11,000 inland lakes. Michigan also boasts 3,200 miles of shoreline, accounting for more freshwater coastline than any other state.
Prefer to enjoy the water from a distance? Perhaps your goal is to own a peaceful oasis with stunning views. The Upper Peninsula offers secluded waterfalls and opportunities for daytrips to Pictured Rocks or other landmarks. Are you looking for a destination that involves dune buggies or ATVs? A decision on your ideal recreation preferences will definitely drive the location of your home or cottage.
"A renovation loan is a good option not many people consider when buying or refinancing a second home, but it's a great resource," said Flagstar National Sales Director Don Bleuenstein. "For example, you can buy a home that needs some work and finance the work with the loan proceeds. This will help you keep your savings intact."
A renovation loan for a second home may require a higher down payment than a typical loan for a second home loan; so if you're thinking about going that route, you need to weigh the advantages of being able to finance the renovations versus the higher down payment.
Monthly payments and personal savings are other important factors in determining which loan is best for you. Typically your debt-to-income ratio can't be more than 43 percent of your monthly gross income. You can find a helpful debt-to-income ratio calculator on flagstar.com.
Remember, there may be additional costs to consider when contemplating your vacation home, such as winterizing and association fees, as well as yard and house upkeep while you're away. Unless you'll be visiting your second home year 'round, you might also want to hire local maintenance help.
The right time
According to a recent survey by the National Association of Realtors, 68 percent of current investment buyers polled said they are "very" or "somewhat likely" to buy another investment property in the next two years, and that's because interest rates are still low. Although a vacation home as an investment may not be your thing, these statistics indicate that those close to the real estate market view the next couple years as favorable to buyers.
Even if you're in your 20s or 30s a second house for water fun can still be within reach. Per an article released by Forbes, "Millennials: The Money-Conscious Generation?," a new study reveals the millennial generation is better at spending and budgeting than the previous generation. Millennials have increased their average retirement savings in the past year to 8 percent. This shows promise that a new generation is thinking ahead about their retirement years and spending them how and where they want…even if that's on a beach.
A Flagstar banker can guide you through the best financing options for your ideal Michigan waterfront getaway. Find a branch near you.
Flagstar Bank has been in business since 1987 and is the largest bank headquartered in Michigan. It is a full-service bank and a top 10 national mortgage originator. Member FDIC. Equal housing lender.
This story is provided and presented by our sponsor Flagstar Bank.
Members of the editorial and news staff of The Detroit News were not involved in the creation of this content.