Purchase financing

[LakePirate]

I have owned 4 boats so far. I paid cash for the first two and did what I would call short term financing (less that 4 years for less than $20,000)on the last two. I'm now looking at some boats that are in the $150000.00 range and wondering what the average term is on a boat in that price range.

[kd3pc]

easily 20 years...with a local bank. Maybe more if your credit is good, 20% down and means to pay it back

[SPC]

If you can get standard financing using the boat as collateral or can use equity in your home to acquire a home equity loan, then you can finance the boat and deduct interest like a home mortgage (there is a minimum nights per year on the boat but it isn't much and ...).

Also, at least here, the home equity lines are currently at a remarkably low rate.

[primerate84]

Actually, if your boat has sleeping quarters, a working galley, and a head, you are allowed to deduct the interest as a second (vacation) home. That is, as long as you don't already have a second home that you are deducting. If you use your primary residence as the collateral, ie, a home equity loan or a typical amortizing second mortgage, your interest is also deductible. As SPC said, the rates on the home equity lines are very low right now, but they generally are variable, so when (not if) rates go up, your interest expense will increase.

[dhays]

I believe that BoatUS has 20yr loans in the $100,000+ range at about 6.25% right now. I'm still waiting to hear from my bank as to what they will do.

Dave

[sailingdog]

The head and galley have to be permanently installed—no portapotties or camping stoves. Also, the boat HAS TO BE THE COLLATERAL for the loan.

Originally Posted by primerate84

Actually, if your boat has sleeping quarters, a working galley, and a head, you are allowed to deduct the interest as a second (vacation) home. That is, as long as you don't already have a second home that you are deducting. If you use your primary residence as the collateral, ie, a home equity loan or a typical amortizing second mortgage, your interest is also deductible. As SPC said, the rates on the home equity lines are very low right now, but they generally are variable, so when (not if) rates go up, your interest expense will increase.