Boat financing

[LUV'N LIFE]

Gentlemen, what companies will loan on a 28 year old boat such as ours? Has any member recently done such a deal?

 

[Stripes]

I haven't found an institution that will loan on a boat older than 1992.

Well, that's not 100% accurate. It depends on what interest rate you want and how long the loan term is. BoatUS will lend for just about anything.

 

[racclarkson@gmail.com]

The general rule of thumb is that banks won't loan for the purchase of a boat over 30 years old. As alluded to above, there are loans available for older boats that are typically at higher rates, but not typically from a bank, per se. But, if you have a business or significant personal relationship with a bank (especially a smaller community bank) you may find cooperation. As always, credit score, appraised value of the collateral, insurability, favorable survey and downpayment drive that bus. A knowledgeable broker or a marine insurance company would be a good place to investigate sources of capital.

 

[krush]

If you have the option, USAA may make a loan. But often it's only up to the NADA value (if one even exists).

HELOC the home may be the cheapest (and dumbest) way.

 

[Bob Bradley]

... HELOC the home may be the cheapest (and dumbest) way.

Only if you're dumb enough to take out a loan that you might not be able to repay. HELOC is certainly the easiest way, and often the cheapest. Just write a check. Also simplifies resale if you are in a state that titles boats, as you don't have to deal with a bank when you sell the boat later. Also, the interest is typically tax deductible.

 

[krush]

I meant to say "for some, the dumbest". As they are using it as a "free piggy bank". It's one thing if you just do it to get cheap money. It's another if it's an avenue to buy a toy that one really can't afford.

 

[LUV'N LIFE]

Thanks, guys. Keep your experiences coming. The fellow who is considering purchasing our boat happens to be a manager in our company and has not borrowed on a boat before. Although he could well afford to pay cash his reason for financing is that if he does not enjoy the live aboard experience he can bail without tying up his own money. We have no experience since we did not borrow funds to purchase.

 

[racclarkson@gmail.com]

Bail, as in default? I think that guy might be the definition of a bad risk.

 

[Seapig100]

Borrow against your 401k and pay yourself 4.5 percent. I know you can do better leaving it in the market, but what's the price for enjoying life.

 

[Seapig100]

Boatus is at 4.5 percent that is not a terrible interest rate.

 

[SeaEric]

FYI If you tell the bank it's going to be a liveaboard - the answer will be NO.

 

[Dan Mapes]

Depending on the configuration of the boat, and I cannot think of a Hatteras that does not fit the definition, interest on a boat is deductible as a 2nd home. You don't need a HELOC.

 

[Fanfare]

Eric

Any reason why this should be? Why should they care? Sure, they want their money back with interest, but can't they qualify their borrowers?

Silly me, I would think Hatteras owners could be an above-average risk. A boat plus perhaps a house plus maybe more?

 

[Seapig100]

Finances are a funny thing. My wife and I both do well however looking from the outside in you would never know it. We drive old vehicles and we live in one of the apartments we own in a modest neighborhood. My colleagues all live in half million dollar house and drive 50+ thousand dollar cars. It has been this way for 15 years now. Now we are looking at spending 150k on a boat and they are confused how we can afford it. Smh.

 

[SeaEric]

Eric

Any reason why this should be? Why should they care? Sure,they want their money back with interest, but can't they qualify their borrowers?

Silly me, I would think Hatteras owners could be an above-average risk. A boat plus perhaps a house plus maybe more?

Marine lenders tell me that banks view liveaboards as a transient, unstable risk. Makes no sense to me.

 

[jim rosenthal]

Not for an older boat. I think that is a good rate. What do they want down, what percentage?

 

[Seapig100]

Not for an older boat. I think that is a good rate. What do they want down, what percentage?

Boatus wants 10 percent down.

 

[Walter P]

10% down on any boat, new or old sounds like an invitation for default down the road. No wonder lots of banks don't want to finance boats any more. IMO a borrower should be required to have a fair amount of "skin in the game" so he/she shares some of the loss in the case of a default.

Walt

 

[Seapig100]

10% down on any boat, new or old sounds like an invitation for default down the road. No wonder lots of banks don't want to finance boats any more. IMO a borrower should be required to have a fair amount of "skin in the game" so he/she shares some of the loss in the case of a default.Walt

I agree and have argued the same point when buying a house.

 

[captcrunch]

Teachers fcu did mine