Need advice on financing

[Philster]

Re: Need advice on financing

Summing up finance options:

1.) Boat financing direct through marine finance specialists, such as Essex or Trident (Google them). Boat and your good name/credit back the loan.

2) Personal loan or boat loan from personal bank. Boat and your good name/credit back the loan.

3) Home equity loan or line of credit. House backs the boat.

Things to think about: Some boat loans are actually mortgages and the interest is tax deductible. Some boat loans are hard to get on older boats (over 10 years) and hard to get on high performance boats (Baja, Scarab, Fountain) and financing will require: a marine surveyor at 15-20 bucks per foot; good insurance and certain repairs will need to be made before the check is cut or within 30-60 days of it being cut. Many boat loans are 25,000 bucks minimum and no less than 10 years (but you can pay off as fast as you like and save interest).

Finance vs. Cash: Honestly, paying cash is cheaper, but riskier. You drop 20k from your account and the boat is a disaster or you lose your job (and the boat market tanks), you'll have nightmares about not having money to eat. Me... I'd rather keep my 20k for emergencies and let the freaking finance company come and take the boat should I lose my income.

Once the boat proves reliable and you know it's for you, and you are set into a procedure to ensure it'll be around for a while, go ahead and pay the loan off early. But, starting out with a loan is a way of cutting out risk that you might want to consider if anyone talks you into dropping cash.

Ask a lot of questions, and don't be cheap. Get a good surveyor, look at more than a few boats, and know that money is very cheap right now. Interest rates are at all-time lows.

 

[AZBoatDreamer]

Re: Need advice on financing

Yes don't drain the bank accounts to pay cash for a boat. Agree with the Post above.

 

[Capt'n Chris]

Re: Need advice on financing

Calculate the number of layers between you and the money and run. There should be no layers between the lender and you.

 

[skargo]

Re: Need advice on financing

I apologize for my input, it wasn't what the OP was asking. I use financing to build my real estate portfolio, and to build my wealth and financial freedom, just because I don't agree with financing vehicles, toys, what have you, doesn't mean it's wrong for YOU.

I am just passionate about the way I do things, and occasionally interject my opinions.

My apologies, and good luck!

 

[Kramo]

Re: Need advice on financing

Thanks for all your help guys, I checked with a local credit union and they did offer me great deals on financing. I'm probably going to check with another lender before making my decision. again really great info!!

 

[hungupthespikes]

Re: Need advice on financing

hey, don't forget your 401k. You borrow from yourself. the rate is high but all the interest goes to you. a smaller loan is under $50.00 for the paper work, and that's the total cost out of your pocket. Give them a call.

 

[convergent]

Re: Need advice on financing

I apologize for my input, it wasn't what the OP was asking.

He asked for "advice on financing" and you gave him some very good advice. No reason to apologize. You might have been the only person that suggested that. No one in a bank is going to suggest paying cash... that's for sure.

Philster... paying cash is not more expensive than borrowing. And, using the bank as risk mitigation in case you buy a bad boat is not being responsible in my mind. We've got way, way, way too many people walking away from their obligations and its a big reason of why our economy is in the toilet. As for an emergency fund of cash... that is not where you get money to buy a boat.

If 180Fisherman is going to borrow for the boat, I would not suggest a home equity loan or a 401K loan. In both cases you are mixing things you don't want to mix. With the home equity, you are putting your house at risk. With the 401K, you are taking your money out of investment for the duration and possibly with bad market timing results. You don't want to put your home or retirement at risk to buy a toy. If the credit union will make you a good deal on a loan and it fits your budget, then that would be where I'd go. Bottom line is if they won't loan you money for the boat then you probably shouldn't be borrowing it anyways.

For me, I won't be buying cars, boats, motorcycles, lawn mowers, or anything else like that via financing ever again. My Dad taught me that growing up and I ignored it for years. Finally at age 47 after spending a few years getting out of debt, I "get it".

My boat is truly a pleasure when I go out in it because I'm not sitting making payments on it when I'm not. And if for some reason my boat breaks then it doesn't cost me anything while its sitting and waiting for me to repair it.