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Go Back   SailNet Community > General Interest Forums > Boat Review and Purchase Forum
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  #1  
Old 02-11-2008
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Frustrated newbie

I don't post much, I just lurk and learn. A year ago I jumped into my dream instead of wishing and bought a Pearson 26 for a minimal price. The boat has been kind to me, letting me make mistakes and still allowing me to get back to the marina. I find myself still wishing, obsessing even, wanting the next boat, a step up. I stay practical. I think my budget would 10-15k and I look at Tartan 30's, Pearson 30's, and lately a Ranger 33. When I go to the boat finance companies though it is the same story, the boats are too old!
Has anybody been in these circumstances? Do you be content with what you have until your circumstances change and you can buy a boat that fits the finance companies requirements? Do you take out a home equity loan?
I sail in the Hampton Roads area by the way and I have the bug bad!!
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Old 02-11-2008
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Quote:
Originally Posted by morgan5152 View Post
Do you be content with what you have until your circumstances change and you can buy a boat that fits the finance companies requirements? Do you take out a home equity loan?
I think many, myself included, dream of something more than what we have, but when I am out sailing my boat, the dream of the other boat dissipates into the wind...I just love being on the water...end of story

If your looking at Tartan 30 or similar your looking at $20,000 +/- , that's just a matter of a good savings plan Personally, with the housing market right now, I wouldn't be doing home equity loans, will bite you in the ____.
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Old 02-11-2008
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It can certainly be hard waiting, but in the long run, you'll be better off waiting until you can afford something bigger. A little self-discipline now, could save you from making a rash decision that you regret later.
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Old 02-11-2008
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Is it not only the age of the boats, but possibly the small amount of the loan? lack of down payment?

What loan brokers have you talked to? You may need to go to someone that specializes in boat loans, like Excel. I think that is one, or something equal. Or go for a newer boat, that is slightly more money, that one can get a loan on.

We got a loan on a 22K 20 yr old boat.


Otherwise, save, save save.

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Old 02-11-2008
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Most marine mortgage companies won't even finance less than 50k at a competitive rate! A 15-20k "fixer upper", which is the reality, is not a boat that should be financed IMHO. Live within your means for a little while and save for it..

Start saving and when you get to 25k buy a boat for 18k and use the rest for upgrades, repairs & a security blanket which will be necessary on an older boat in that price range. I've yet to see one that did not require at least 10-20% of purchase price for repairs or upgrades...

DO NOT use a home equity loan or line of credit in this market to buy a boat with your house securing the loan. There are literally hundreds of thousands of US homeowners "upside down" in their homes right now because they did stupid things like buying a Hummer or Boat with the so called "equity" in their homes.

Then again, if in this market, you still have 200k of equity then 15k is nothing. However, if your house is currently worth 300k and last year it was worth 350k and you currently owe 275k don't even think about it...

Trust me it's not worth risking showing up at a closing with a check for 100K just to sell your house..

P.S. The above is MY opinion only and you can do what you want to as it's your life not mine...
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Old 02-11-2008
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Boats are considered a luxury item -i.e., you don't need one you want one; therefore if your money gets tight it will be the first payment you miss (as opposed to a mortgage or car payment).
That makes finance companies a little tighter with their money.

I'd say save a little longer and up your down payment so the bank can see you have a (higher) vested interest in not letting it be repocessed/go into default.

It also depends of course on you credit rating.
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Old 02-11-2008
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Not sure if you have any military service or family with some, but USAA offers boat loans and I don't think they care about the age of the boat. Furthermore, they are in my opinion the best customer service you'll find anywhere. I do all of my banking and insurance with them.
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Old 02-11-2008
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I agree with Punjabi with one exception.

USAA uses Progressive Insurance for boats in NJ. Thier quote for my 30 yo boat was $ 974.00. BOATUS was $ 327.00. Same coverage.

Shop around for loans, parts, boats, insurance and everything else.

It is your dream. There are always options to live it. How you chose to support it is your decision, based upon your circumstances....

Check with your local credit union. If you are not a member...join!

Have a 401K you can borrow against at a REALLY low rate? Yeah, yeah, yeah, I know...I know...how long ya' gonna live anyway? How much money do you need when you have Altheizmer's (SP). How much money do you wanna' leave the kids who did not thank you for putting them through college.

Find a way to buy the boat. They can sell it when you're gone....or give you a Viking funeral.
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Old 02-11-2008
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I have had loans on most of my boats. They have been deductible as second mortgages and I could often get better returns on investing the the money that would have bought the boat than I paid interest on the boat loan.

I also have financed boats in a number of ways, second mortgages on the house, personal unsecured loans, loans on the boat and previous owner financing. I have even bought a boat with a credit card taking advantage of the low introductory rate and paying it off before the rates went up. Even with an older boat, it has not all that hard to get financing but you will need to focus on instititions that finance smaller loans on older boats if you are going the marine loan route. Typically, financing institutions will require surveys on older boats.

No matter how you finance, but especially with alternative financing methods such as credit cards or second mortgages, you need to be religious about getting the boat paid off in timely manner.

As noted, the problem that you may be encountering may be one of borrowing less than the minimum for that lending institution. A Ranger 33, Tartan 30 or Pearson 30 should have a sales price down around $12-14,000 which is a bit less than most loan companies will do. You may actually come out ahead buying a slightly more expensive boat at the lower fixed rates that are typical of boat loans vs home loans.

Some of the marine loans that I have gotten have been through BoatUS who will finance up to 80% of the boat value but they only make loans that are more than $25,000. The last time I dealt with Trident Funding they had a minimum of $15,000. Essex Credit has given me a competative quote on small loan an older boat. I had a boat loan through Citizens Bank of Rhode Island and they were very good to work with as well.

Good luck,
Jeff
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Old 02-11-2008
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Quote:
Originally Posted by Dunlookn View Post
IUSAA uses Progressive Insurance for boats in NJ. Thier quote for my 30 yo boat was $ 974.00. BOATUS was $ 327.00. Same coverage.

When I looked at Progressive, they wouldn't even insure a boat more than 20 yrs old?
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