[Jeff_H]

First one quick minor correction, mortgages are on real property. Boats are not real property so you get a boat loan and not a boat mortgage. In most states it does not matter whether the boat is your primary residence or not since homestead provisions only apply where the primary residence is real property.

Banks generally are not a great place to get a boat loan. They tend to have higher rates, only make loan on newer boats with shorter terms. Marine loan companies generally work out better all around. Your loan will include restrictions such as requiring that the boat be documented and may restrict where you can take the boat. Marine loan companies will make loans on older boats after survey. They loan some percentage of the lower of the value of the boat or the purchase price, but that percentage (usually 80%) varies from company to company.

I borrowed against a 19 year old boat and opted for 10 years to pay it off (I think that I could have gotten 15 years). I got a lower rate by borrowing less than 60% of the boat's value/purchase price for a shorter period. The company that I dealt with did not include tax, registration, documentation fees and services, transporting the boat from Maine, or commissioning in the price of the boat. They did include some percentage of improvements made to the boat it the first 30 days after purchase.

Essex and Trident are two lenders that have good reputations. I have dealt with Trident and had a very good experience with them. The provided very good service and even negotiated a lower rate than the original rate with no fees when the rates dropped a couple years into the loan. You do need to make sure that there are no prepayment penalties. Unlike home loans marine loans sometimes have a pre-payment penalty clause and these can come back to haunt you when you pay off early as I did. The lack of a penalty clause was one reason that I went with Trident.

Marine loans typically require a survey, a certain level of insurance, and documentation.

I also want to talk about Halekai's point, boat loans do make sense if you are in higher income brackets, can use the boat as a primary residence or second home, and can earn money on your money. In my case, at the time my boat loan was a slightly lower rate than my house mortgage. With the tax deduction for a second home, I was paying something around 3 1/2% interest. I was able to obtain a much higher return on my invested money at the time. Cars are a different story since the interest is not deductable. Also, I have generally broken even or come out ahead on the boats that I have owned, if you don't factor in my maintenance costs which are easy offset by the benefits of not spending money on other forms of entertainment when the boat is use.

Jeff