Not every house in a flood zone will require flood insurance and if you pay cash, it will be entirely up to you. If you’ve ever had your heart set on a property near the water, contact your homeowner’s insurance agent (your lender or Realtor can provide several for you to call if you don’t have one) and they can let you know if expensive flood insurance is required. If it’s not required….hesitate one more time before taking action and find out as much as you can about the property and its history in a flood zone.
Find out from people who live nearby if they have had any water issues. As you can see in the photo above it’s more than just what is around the house-let’s talk about what’s under the ground. Obviously, the water table. Just because the water ends a few hundred feet away (or closer) from the house…there is still water lurking below the ground…so find out if there have been problems in the past!
Much of the waterfront around the Chattanooga area is surrounded with land owned by The Tennessee Valley Authority which has many restrictions and requires permits for docks. But on the positive side a lot of the waterfront property is so high up that even if it’s technically in a flood zone there should never be an issue with the water reaching the property.
There are more considerations as well. If you have a dock or plan to build one, you have to budget for maintenance and don’t forget the boat which you will NOT buy while waiting to close on the house (we all know not to do this RIGHT??) or you could lose the house sale! Waterfront property will also usually have higher taxes because it is a luxury after all.
Sometimes flood zone properties (not necessarily waterfront) will be priced a little lower. It might be an incentive because of the added costs of having to pay flood insurance. Buyers will sometimes think they are getting a deal because a property is a lot less than competing homes. Looks tempting…but decide if a flood zone property is something you really want with the extra insurance and the RISK of living there. If you’re a buyer looking for a deal, then these additional factors will not be in the economy package. In fact, if you were approved for a loan at a certain amount and then the flood insurance is added to your payment you may NOT be able to afford the house.
Your lender will let you know what you can afford and then you can consider all of these options. But decide how much risk and extra expense you want in your life. If you live close to a waterfront walking trail or park then you might be satisfied with that and save your money for something else that may be more important in Your Chattanooga Life!