Now I realize that this is probably an unfair question, as everyone's financial situation is different. But I also realize that this board is an ending source of experienced and knowledgeable advice. My question is, what is the longest term that you would take on a boat? I'm thinking of a '98-'99 310, and to put the payments were I can COMFORTABLY afford them would require going 15 years. Not sure if I could swing it at 10. I financed my H26 for 7, but need to move up as my family has grown. I figure 15 years from now, the kids will be heading out, and it'll be time for the wife and I to move up to a 40+ for retirement. But that's down the road. Now with cars, I would I prefer 4 years and never consider going longer than 5, although some will go as long as 7. I just can't envision paying for a car that long. So how long can you envision financing a 4 year olf boat? Tom
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Check the BoatUS site for financing.
Tom: Check the BoatUS site for financing rates and terms. I think you can go 15 years. The rates are low now, so you may be able to go for a shorter period. My suggestion is to just pay a little more each month and keep your term longer. That way if you are short of cash you do not need to pitch in the extra for a month or two. We now how a project can sometimes get a little expensive!
Tom: Check the BoatUS site for financing rates and terms. I think you can go 15 years. The rates are low now, so you may be able to go for a shorter period. My suggestion is to just pay a little more each month and keep your term longer. That way if you are short of cash you do not need to pitch in the extra for a month or two. We now how a project can sometimes get a little expensive!
T
Terry
TOM, WE WENT 20 YEARS ON OUR P42...
it kept our payments lower and, as Steve suggested, you can always apply more towards the principal when you have the extra cash. We did seven years on our previous H28. Terry
it kept our payments lower and, as Steve suggested, you can always apply more towards the principal when you have the extra cash. We did seven years on our previous H28. Terry
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Rich Wallace
Just Financed a P42 On A Line Of Credit
I did a lot of checking over the last few weeks and decided to use a home equity line of credit. Boat US was around 6.5% but found a 4%variable that will be 1/2 percent under prime (with a base of 4%) for the life of the loan. It lowered the 10 year payoff rate from around $1600 to about $1000. We can pay only interest for the first five years if we are in a bind so it is very flexible. The real shocker was realizing we paid nearly twice what we did for our home. Ain't boating great!!!
I did a lot of checking over the last few weeks and decided to use a home equity line of credit. Boat US was around 6.5% but found a 4%variable that will be 1/2 percent under prime (with a base of 4%) for the life of the loan. It lowered the 10 year payoff rate from around $1600 to about $1000. We can pay only interest for the first five years if we are in a bind so it is very flexible. The real shocker was realizing we paid nearly twice what we did for our home. Ain't boating great!!!
S
Steve Winkle
Boatsbank
Tom, We just concluded refinancing our H380 this week and got 5.75% for 20 years. We pay extra on the principal each month, so we don't intend to use the whole 20 years. My wife found the lender by filling out the info requested from Boatsbank which can be found through yachtworld.com. Evidently, they're a clearing house much like Lending Tree for home mortgages. She did everything over the internet and phone and the lender sent us the paperwork. We signed it, had it notarized, and fed-exed it back to him. Painless. And we'll be saving around $150 a month. Fair winds, Steve S/V Options
Tom, We just concluded refinancing our H380 this week and got 5.75% for 20 years. We pay extra on the principal each month, so we don't intend to use the whole 20 years. My wife found the lender by filling out the info requested from Boatsbank which can be found through yachtworld.com. Evidently, they're a clearing house much like Lending Tree for home mortgages. She did everything over the internet and phone and the lender sent us the paperwork. We signed it, had it notarized, and fed-exed it back to him. Painless. And we'll be saving around $150 a month. Fair winds, Steve S/V Options
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Don
other considerations
Keep in mind the potential for writing off the interest portion of a boat loan as it is considered a second home under certain circumstances for tax purposes and therefore the interest may be deductible. This may not be significant in some cases, however, loans vary and you can negotiate the interest rate over the term such that any deduction can be optimized to your particular situation to maximize the benefit Don
Keep in mind the potential for writing off the interest portion of a boat loan as it is considered a second home under certain circumstances for tax purposes and therefore the interest may be deductible. This may not be significant in some cases, however, loans vary and you can negotiate the interest rate over the term such that any deduction can be optimized to your particular situation to maximize the benefit Don
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Peggie Hall/Head Mistress
The problem with long term loans
Especially on a new boat, is that boat depreciates faster than the balance on the loan decreases, creating a condition known as "upside down"--owing more than the boat is worth. This can be a real problem if you're forced to sell for any reason. It can be overcome--or at least offset considerably--if the down payment is big enough (at least 25%, more is better) and/or by making additional payments toward the principal...but before taking a loan for 15-20 years, it would be wise to check the book values of the same 2, 3, 5 year old boat and compare them with what your loan balance will be in 2, 3, or 5 years. And then reduce that by least another 10% 'cuz nobody is ever FORCED to sell when the boat market is strong.
Especially on a new boat, is that boat depreciates faster than the balance on the loan decreases, creating a condition known as "upside down"--owing more than the boat is worth. This can be a real problem if you're forced to sell for any reason. It can be overcome--or at least offset considerably--if the down payment is big enough (at least 25%, more is better) and/or by making additional payments toward the principal...but before taking a loan for 15-20 years, it would be wise to check the book values of the same 2, 3, 5 year old boat and compare them with what your loan balance will be in 2, 3, or 5 years. And then reduce that by least another 10% 'cuz nobody is ever FORCED to sell when the boat market is strong.
J
John Richard
Here's something to think about
The overall term of the loan can be shortened if you do one or the other of the following. One, contact the lender and tell them you want to pay half of the loan every 15 days. Not two weeks, but 15 days. Or, two, make an extra payment some time during the year and specify that it goes only to principle. By doing either, a 20 loan can be shortened (I think) by something in the neighborhood of 8 to 10 years. We're doing this on our home loan and boat financing can be similar. Check it out. John Richard s/v Jack's Place
The overall term of the loan can be shortened if you do one or the other of the following. One, contact the lender and tell them you want to pay half of the loan every 15 days. Not two weeks, but 15 days. Or, two, make an extra payment some time during the year and specify that it goes only to principle. By doing either, a 20 loan can be shortened (I think) by something in the neighborhood of 8 to 10 years. We're doing this on our home loan and boat financing can be similar. Check it out. John Richard s/v Jack's Place
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