Cabin on a lake.

Buying A Lake House: What You Need To Know And Consider

6-Minute Read
Published on December 3, 2021

Watching the sun rise over a glassy lake. Long summer days spent out on the water. Sunset boat rides. Bonfires with singing and roasting marshmallows. Bonding and memories that will last long after you’ve packed up the car to go home.

A lake house can be one of the most worthwhile purchases you make, an investment in a lifetime of unforgettable summer vacations and weekend getaways.

Owning a lake house can be a lot of fun, but it can also be a lot of work. From finding the right house to getting a mortgage to keeping up with maintenance, you need to be prepared before you go into the process.

Here’s what you need to know when you’re in the market for a lakefront vacation home.

How Much Does A Lake House Cost?

Before you start looking at houses, you need to consider whether you’ll really be able to afford an investment like this. It’s more than just being able to afford the mortgage; there are a lot of costs that come with owning a lake home.

Property Cost

Waterfront property, for starters, is generally more expensive than other types of houses, and if you’re purchasing it as a second home, financing will come with more stringent requirements. For example, second home purchases require a larger minimum down payment than primary residence purchases. Depending on the type of loan, you may be required to put a minimum of 10%, 15% or 20% (or more) down.

Insurance And Maintenance

You’ll probably have to pay for flood insurance, on top of what will likely be higher-than-average homeowners insurance costs. Even if you aren’t required to have flood insurance, you should still seriously consider it. Even just a few inches of water can cause costly damage to a home, and regular homeowners insurance typically doesn’t cover flood damage.

You’ll also likely have a larger maintenance budget on a lakefront property, as homes near the water tend to get more wear and tear, in addition to having more property components requiring time and money (such as a dock that needs regular maintenance).

Time And Effort

There are also non-financial obligations that come with purchasing a vacation home, especially one on a lakefront. You should think about whether all the maintenance and effort the home  requires will be worth it to you – or if it would be worth it to pay someone else to take care of the house.

The Fun Stuff

Now, we can finally get to the reason you’re considering buying a lake house in the first place! While having a lake house can be a ton of fun, remember that all the activities you associate with it – boating, jet skiing, water skiing – aren’t cheap.

Make sure you know what gear you’ll be in the market for once the house is yours, and how much it will cost.

What To Ask When Buying A Lake House

If you’re considering buying lakefront property, you’re probably envisioning spending many a sunny summer day swimming, paddling and fishing to your heart’s content. It would probably be disappointing if you found out after buying the house that you aren’t allowed to do any of those things or that the property requires something special in order to do them.

Before you decide on your dream home, it’s important to get the lowdown. Here are a few examples of what you should ask your real estate agent or the seller when buying a lake house:

  • Does the property require flood insurance?
  • What are the property and waterfront rights? For example: does the dock in the backyard belong to the property owner? Are watercraft with motors allowed on the lake? Is fishing permitted?
  • What is the quality of the lake water?
  • Is there a homeowners association or similar governing body for the lake community and what are their bylaws?
  • How close is the nearest grocery store and gas station?
  • If the area is more rural or secluded, will you have to pay a premium for utilities?
  • Does the property have its own private septic system?
  • How is the cell phone service and will I need to pay for a landline?

When purchasing a lakefront property, it’s likely that you will be working with a real estate agent who is knowledgeable about the properties and the lay of the land in that area. This makes them a great resource to turn to in getting these questions answered and for walking you through anything else that’s important for you to know before buying a lake house.

Apply for a mortgage today!

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How To Buy A Lake House

So, you’ve thought it through and considered all the financial factors, and decided to buy a lake house. Now, it’s time to get the process started. As with any home sale, there are many steps to buying a home, but the process of buying a second property can be slightly different.

Get Preapproved For A Mortgage

First, you should consider how you want the property to be classified. Your lake house is probably going to fall into one of two categories: primary residence or second home. (If you’re interested in buying a lake house for the sole purpose of renting it out, you can check out our guide on purchasing an investment property.)

If you plan to move into your lake house and live there for most of the year, that makes it your primary residence. If you only plan to live there for part of the year while maintaining your primary residence, then it’s a second home.

Whichever route you take, the first step is the same: Get preapproved for a mortgage. This will enable you to start shopping for homes within your price range and make an offer on a home.

If you’re purchasing the property as a second home, you may need a higher credit score to qualify for a mortgage, and you might receive a higher interest rate due to the increased risk for the lender.

It’s also possible that you’ll have to get a jumbo loan, which is a mortgage for properties that cost more than limits for conventional mortgages allow. This type of loan comes with its own set of stringent requirements. To get a jumbo mortgage on a second home at Quicken Loans, you’ll need a minimum credit score of 720 and a debt-to-income ratio of no more than 45%. Minimum down payments start at 10.01%; the amount required depends on how much is being borrowed.

Find An Experienced Real Estate Agent

Purchasing a lake house is different from purchasing a regular home in many ways, which is why it’s so important to work with someone who knows what to expect and what to look out for.

When searching for a real estate agent, be sure to find someone who specializes in lakefront properties. This is especially important if you’re new to lake living and aren’t aware of the typical pitfalls that can come with owning a lakefront home. An experienced agent will know what questions to ask about the homes you view and what you need to find out about a home you’re considering before you make an offer.

Get A Home Inspection

Getting a home inspection is important no matter what type of home you’re buying, but it becomes even more vital when you’re considering waterfront property.

Water can do all kinds of damage to a home, so it’s important to make sure any houses you’re looking at don’t have problems with leaks or flooding. An inspector will make sure that you won’t have to deal with an unexpected water intrusion or mold issue upon move-in.

If the home is hooked up to a septic tank, you should have that inspected, as well. Repairs to a septic system can be expensive and inconvenient; if an inspector finds an issue, you can ask the seller to pay for it, rather than having to cover it yourself and deal with an unpleasant surprise when you’re trying to enjoy a weekend at the new lake house.

When Is The Best Time To Buy A Lake House?

When buying a lake house, you may want to consider waiting for the right time to buy. Although properties are available year-round, waiting can provide you with more options and could even save you money.

The spring season is when prospective lake house buyers will see the highest number of homes for sale. If your priority is finding the right home, then this might be the best time for you to buy. However, you may be up against more competitors this season when homes tend to sell over asking price and faster.

If you’re looking to avoid the competition and save some money, you might want to wait to buy until the end of summer or fall. At this time of year, home buyers will likely find that homes are still available on the market and sellers may be more willing to make a deal before winter hits.

The Bottom Line: Should You Buy A Lake House?

Although there are many factors to consider before purchasing a lake house, these properties can be worth buying. A lake house can make a great investment property or vacation home if you can afford one.

Once it’s all said and done, you’ll have a new, fun getaway spot to enjoy with your family or friends – and probably a handful of people you haven’t heard from in a while (as the saying goes, you never know how many friends you have until you have a lake house).

Itching to get into your vacation home? Get the process started online.

Apply for a mortgage today!

Apply online for expert recommendations with real interest rates and payments.

Start Your Application
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Andrew Dehan

Andrew Dehan is a professional writer who writes about real estate and homeownership. He is also a published poet, musician and nature-lover. He lives in metro Detroit with his wife, daughter and dogs.