Home Equity Loans

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william24424

william24424

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Jan 25, 2007
366
Cal Cal 33-2 cape cod
A reminder to those "fueled by debt" sailors the home equity loan rates have shot up recently. Mine started at 3.5% (when I bought boat) is now 7.75%. My boat loan (home equity) now will be combined with my fixed mortgage, refinanced will be around 6%. Banks are good at keeping guys like me in debt, but I will continue sailing, whatever the cost. Good luck and smooth sailing.
 
T

tom

Do the Math!!!

You have to do the math on any loan. The refinancing cost can easily eliminate any money saved on interest. We did a home equity loan for our boat when the rate was 4%. We then made double or triple payments to pay it off ASAP. The main consideration is if your goal is low cost or cash flow. Almost always if you refinance to get lower payments the loan ends up costing more. If you are wanting lower costs prepayment is the best method. On our last house I did the math and by paying an extra $100/month we would save over $30,000 over the course of the loan. Early on a 30 year loan is the best time to make extra payments to save the most money. But read the fine print some banks charge a penalty for early payments. But without a doubt a home equity loan is cheaper than a boat loan. They were wanting 10-12% for a boat loan when we got our 4% home equity loan. But you are putting your house on the line if you fail to make your payments.
 
M

Mike

William

It sounds like you borrowed at an Adjustable Rate. If it was a Fixed Rate, your interest rate would not rise. Some credit unions, at least mine, charge no fee when taking out a home equity loan, as long as it is at least $10k and you don't pay it off before holding the loan for one year.
 
Tim R.

Tim R.

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May 27, 2004
3,626
Caliber 40 Long Range Cruiser Portland, Maine
Home Equity not the best choice

If you default, they take your house. With a boat loan, most can still deduct the interest and if you cannot make the payments, they take your boat before they take your house. I got a boat loan for 5% last June. Tim R.
 
W

Waffle

William that is one pretty boat

Lock in fixed rate ASAP! Rates are going up/!!!
 
dvideohd

dvideohd

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Jul 24, 2005
261
MacGregor Mac26D Richardson, TX; Dana Point, CA
Georgeous

That looks really nice... Spring got here last Saturday in North Texas. Woke up - the birds told me all about it. Two days later, the air is full of pollen and "stuff". Mosquitos out on the same day.... It's time to get out... How long before you can get out and really go places? --jerry
 
Dan Johnson

Dan Johnson

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Oct 14, 2005
2,191
1983 Hunter H34 North East, MD
REFI...

on a 15 year loan at 5% with cash taken out to buy the boat in full adds less than a boat loan payment would be and has no lien on the boat.
 
Landsend

Landsend

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Aug 9, 2005
772
Hunter 28.5 Palm Coast, FL
If the boat has a head, a galley, and a bed...

You can deduct it as a 2nd home. This alway helps a bit.
 
L

larry w

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Jun 16, 2005
476
- - long beach, CA
loan schmoan

The boat is paid off, but the yard bill was nearly seven grand. OUCH- it's a good thing I LOVE IT, or I might do something rash, like...
 
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