Financing

[blackjenner]

I know most financing deals ask for 20% down. We are currently looking at a "boutique" boat (not a large production run like Hunters or Catalinas) that is vintage 1981.

So it's older and only a 160 run. Big ketch, full keel, well made.

Any recommendations on boat financing companies that offer 10% down programs? We'll have the 20% but I'd like a little more cushion up front for possible transition costs to live aboard.

We are in Washington State.

[LauderBoy]

I'm also very curious about this. I'm currently in the process of selling most everything I own to raise the funds for moving aboard a mid 30ft sailboat. I live in Florida and being able to put 10% down vs 20% would have a fairly big impact on what boat I could afford.

I'm also trying to keep as much cushion as possible for insurance, surveys, moving, misc things breaking right up front, and so on.

[night0wl]

For a boat that old, it'll be nearly impossible to get traditional boat financing...especially in this credit constrained market where so called "prime" borrowers are paying ~6.25% (and higher) with 25% down at a minimum. Of course, much depends on the boats value. Items over $100k with a recent survey may be different.

[blackjenner]

Originally Posted by night0wl

For a boat that old, it'll be nearly impossible to get traditional boat financing...especially in this credit constrained market where so called "prime" borrowers are paying ~6.25% (and higher) with 25% down at a minimum. Of course, much depends on the boats value. Items over $100k with a recent survey may be different.

The age has been mentioned. One place has said they do fine with older boutique boats with a good survey at 20% down. I was just looking or any options. Don't know until you ask.

[wind_magic]

Originally Posted by LauderBoy

being able to put 10% down vs 20% would have a fairly big impact on what boat I could afford.

Lower down payment does influence how much boat you can afford - the lower the down payment, the higher the interest, which means you can afford less boat.

[blackjenner]

Originally Posted by wind_magic

Lower down payment does influence how much boat you can afford - the lower the down payment, the higher the interest, which means you can afford less boat.

Really?

Same boat.

Using my loan calculator...

100k boat

20% down

80K finanaced

6% financing (yes I was just quoted that rate)

20 years at $573.14 a month

100K boat

10% down

90K financed

8% financing (I was tempted to put 7 but, what the hey)

20 years at 752.80 (7% was 697)

I think that anyone with a good credit score shouldn't lose the loan for 179.00 a month. If they would, they are playing it too close anyway.

For some folks, that might work better if the initial outlay is tight.

I'm planing on 20% down myself, but was looking for options.

In my case, I'll be shedding a nice Seattle condo and all it's costs (mortgage, HOA, taxes, utilities) so that makes the boat costs (payment, the moorage, insurance and $6,000 a year planned money in a maintenance savings account) much easier to afford.

[wind_magic]

Originally Posted by blackjenner

Really?

Same boat.

Using my loan calculator...

100k boat

20% down

80K finanaced

6% financing (yes I was just quoted that rate)

20 years at $573.14 a month

100K boat

10% down

90K financed

8% financing (I was tempted to put 7 but, what the hey)

20 years at 752.80 (7% was 697)

I think that anyone with a good credit score shouldn't lose the loan for 179.00 a month. If they would, they are playing it too close anyway.

For some folks, that might work better if the initial outlay is tight.

I'm planing on 20% down myself, but was looking for options.

In my case, I'll be shedding a nice Seattle condo and all it's costs (mortgage, HOA, taxes, utilities) so that makes the boat costs (payment, the moorage, insurance and $6,000 a year planned money in a maintenance savings account) much easier to afford.

My point was that being able to buy something isn't the same thing as being able to afford it.

Look at it this way ...

If you pay cash (100% down) you can buy a 100k$us boat for 100k$us.

If you pay 20% down at 6% for 10 years you can buy a 90k$us boat for 100k$us.

If you pay 10% down at 8% for 10 years you can buy a 76.5k$us boat for 100k$us.

In any case you're paying 100k$us for the boat, but the lower the down payment (and higher the interest), the less boat you're getting for your money. Cash buys more boat.

Being able to buy something is about lowering your down payment, stretching payments out over a huge amount of time, etc, to lower your monthly payment to the lowest level possible and thus have the least impact on your monthly budget.

Being able to afford something is a totally different concept.

Like I said, the lower the down payment, the higher the interest, and the less boat you can afford.

[blackjenner]

Originally Posted by wind_magic

Being able to buy something is about lowering your down payment, stretching payments out over a huge amount of time, etc, to lower your monthly payment to the lowest level possible and thus have the least impact on your monthly budget.

I think you and I see "buy" and "afford" a little differently.

I'm OK with that difference. Thanks for the answer back.

[SailKing1]

You might find it better to acquire the boat financing while you still own your home as many lenders will not finance for liveaboard.

[blackjenner]

Originally Posted by SailKing1

You might find it better to acquire the boat financing while you still own your home as many lenders will not finance for liveaboard.

I have heard that and we are taking that into account. Thank you.