Used Boat Financing

NOLV4V8 · **Posted:** Wed Dec 04, 2013 4:59 pm

To the larger boat owners...

I am considering stepping up to a much larger boat this coming season (sadly not Four Winns) and am looking at a 2000 model year vessel.

What should I start to investigate interms of getting something like this financed. I have considered my home equity or a boat loan. I do have some understanding that you can deduct the interest on your income taxes like a 2nd home. I have a decent downpayment, but I would rather take advantage of the deduction if possible.

Can anyone point me to a good educational resource or some good insight to finding the best option?

Thanks in advance....

kd4pbs · **Joined:** Thu Sep 05, 2013 10:34 am **Posts:** 350

Common sense dictates that it's foolish to borrow money against one's home for something other than one's home (eg. new kitchen, expansion, etc.)

Most financial institutions won't loan money on boats older than 10 years.

Personal loans are always an option, but that carries high interest rates.

BoatUS does finance; you might have better luck with a specialty lender such as that.

ric · **Posted:** Wed Dec 04, 2013 10:57 pm

Cash money my friend. 2000 era boats are old, ain't nobody going to finance that.

rpengr · **Posted:** Wed Dec 04, 2013 11:42 pm

kd4pbs wrote:

Common sense dictates that it's foolish to borrow money against one's home for something other than one's home (eg. new kitchen, expansion, etc.)

Yes, there's a certain logic to that statement. However, Interest on a Home Equity loan is tax deductible if you itemize (1st & 2nd mortgage is deductible only up to an amount equal to your original purchase price of the home plus value of all improvements since purchase).

NOLV4V8 wrote:

I do have some understanding that you can deduct the interest on your income taxes like a 2nd home. I have a decent downpayment, but I would rather take advantage of the deduction if possible.

If the boat has "sleeping, cooking and toilet facilities" it can qualify as a second home:
http://www.irs.gov/publications/p936/ar02.html

ric wrote:

Cash money my friend. 2000 era boats are old, ain't nobody going to finance that.

Not True...especially with larger boats.
My Credit Union gave me a boat loan on my 2000 at 5.99% 1 year ago. (12 year old used boat). That's a little higher interest than a new boat would have been. They would have loaned more than I paid for it.

kd4pbs wrote:

BoatUS does finance; you might have better luck with a specialty lender such as that.

True

Here is a nice resource:
http://www.yachtworld.com/randallburg/randallburg_14.html

strick · **Posted:** Thu Dec 05, 2013 8:18 am

Check out Essex Credit. They specialize in boat loans and have lower rates than almost everybody.

ric · **Posted:** Thu Dec 05, 2013 9:37 am

Oh forgot about credit unions. Yeah they are usually more relaxed about things

kd4pbs · **Joined:** Thu Sep 05, 2013 10:34 am **Posts:** 350

Indeed one can deduct the interest. To me, that doesn't outweigh the fact that you're taking equity out of your home. Miss payments on a boat loan, they take your boat. Miss payments on a home equity loan you used to buy a boat, you lose your home. Plus you don't get the increased value that putting that money back into the home would bring. Plain foolish, and one of the main reasons this country is so screwed up right now. I'd borrow against my 401K for a boat before I'd take out a home equity loan for one.

230 Mike · **Posted:** Thu Dec 05, 2013 11:10 am

kd4pbs wrote:

I'd borrow against my 401K for a boat before I'd take out a home equity loan for one.

+1.

erie cruiser · **Joined:** Mon Jun 06, 2011 6:40 am **Posts:** 68

The problem with our country is people living beyond their means. If you have already determined a budget and accept the monthly payments then its all about interest rates, it does not matter if its a home equity, 2nd mortgage, boat loan, credit union or loan on a 401K.....If your good at managing money its all about the best rate. When cds hit bottom I was getting less than 1%, so pay off cars and boat and pay those monthly payments to myself (ranging from 3 to 6%). Its all about the best rate, used boat loans may run as high as 10%, a home equity loan to a person with good credit could be as low as 3.5 or 4%.

230 Mike · **Posted:** Fri Dec 06, 2013 10:52 am

IMO the problem with our country is the loss of common sense, not the inability to play a shell game with your money.

ric · **Posted:** Fri Dec 06, 2013 3:54 pm

20 grand and under? Cash no questions asked. That shouldn't even be a year's worth of savings.

strick · **Posted:** Fri Dec 06, 2013 5:13 pm

Generally I recommend against the 401k loan route unless you are CERTAIN of your job security. In most 401k plans, if you separate from service, the outstanding loan (which usually has a 5 year maximum length) becomes immediately due :shock:

or is treated as a pre-retirement distribution and is taxable as income plus a 10% penalty if you are under 59 1/2 yrs old. I'm an investment manager with 20 years experience & have seen this happen on 2 occasions to people, with VERY bad consequences for them.

If the boat qualifies for getting "2nd home" treatment for a tax deduction (based on the previously stated boat criteria), you don't need to monkey with cost and closing expenses of home equity loans, just a regular loan will do, and you can deduct the interest.

That being said, debt is bad... unless managed very carefully. Always keep your loan to value in consideration and don't get upside down.

That also being said, we are at historically low interest rates and money is "cheap" to borrow. I did not hesitate taking out a loan for part of our recent Meridian purchase, even though we can't deduct it (have 2 houses already). It will be the first thing I pay off, and sooner rather than later.

Just my 2 cents...

firecadet613 · **Posted:** Fri Dec 06, 2013 6:20 pm

Here's a great loan broker. They did great when I bought my 318 a few years ago.

http://www.your-marine-lender.com/

Flyer51 · **Posted:** Sat Dec 07, 2013 9:26 pm

I'll second the opinion of using a credit union. I sit on a board of one and I know we will loan on a older vessel as long as the ltv is within our guidelines. You'll find the cu much easier to deal with than a bank. If your not already a member I would pick one to join and develop a good relationship. There are some good ones out there.

NOLV4V8 · **Posted:** Mon Dec 09, 2013 1:29 pm

Thanks to those who provided the info I was looking for.

I am going to look into my options as well as a few others provided locally here.

www.iFourWinns.com

Used Boat Financing

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