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I am in the market for a sailboat in the 40 to 50ft range I need to finance about 60% of the boat . My question is this, would I be allowed to leave for an extended cruise to the Caribbean if the boat is not paid off but insured. If anyone has experience with this I would love some insight. I would appreciate sticking to the topic of financing and not weather I can handle that size boat or my abilities (retired USCG Master mariner any ocean any gross tonnage) I have lived down in Costa Rica the last 17 years and am not that up on what the banks will allow you to do. Is anyone here sailing outside the us with a boat that is financed ??? any recommendations for lenders will be helpful
 

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The banks used to require you to be documented . I do not know about now, I would blow it off and just go , hey you could always say "I didn't know" .

So what are we getting huh huh come on ?
 

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I purchased my boat a year ago with a loan from Bank of America. Excellent interest rate that beat any other I could find, easy to work with, 20% down, for a 13 year old boat. The bank did ask where the boat would normally be kept and sailed, and they insisted on using their own documentation service. That was the only "fee." I paid that out of pocket. No points or closing costs.

If you put down 40%, the bank should be very happy. Banks will protect their interest, so that means the boat must be documented, have a good survey, and insured for full value. If you can get it insured for the Caribbean area, I can't imagine a bank would care. They just want their stake covered, which insurance will do. They wanted a copy of the insurance policy at closing.
 

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When i used USAA no questions asked other than year, make and model. They looked up the blue book and said OK. 0% down. Great rate on a 17 yr old boat. No closing costs. They treated the loan like a used car. I was approved in 5 minutes! No kidding. Sight unseen, no survey...nothing. Absolutely scary. I actually considered walking away because it was to easy. Just gave me the money. Keep in mind that i bought it 40% below market value. Long story short; distressed seller. Needed money immediately; within days. (Didn't hurt that i had zero debt and pristine credit)
USAA has never even asked me who my insurance carrier is !! I don't even know if i need insurance ! I carry it because most marinas mandate it and it would be imprudent to do otherwise.
I'm actually right side up on the loan; kinda nice.
 

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One possibility with a blue water capable sail boat is they could subject you to a tougher credit check or even a background check. I guess it would depend on the bank. You wouldn't be the first person to wave goodbye at the dock and sail off with the bank's collateral.

Admittedly, my boat financing experience is very dated. That said the difference between financing a power boat and a blue water sail boat was that extra effort the bank made to make sure that if i did go somewhere, i was coming back.

The power boat financing went much the same as described above. No different than financing a car.
 

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One possibility with a blue water capable sail boat is they could subject you to a tougher credit check or even a background check. I guess it would depend on the bank. You wouldn't be the first person to wave goodbye at the dock and sail off with the bank's collateral.
Never heard this before. I'd say my boat is bluewater capable. The didn't seem worried.
 

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Do car lenders ask where you'll be driving?
 

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One possibility with a blue water capable sail boat is they could subject you to a tougher credit check or even a background check. I guess it would depend on the bank. You wouldn't be the first person to wave goodbye at the dock and sail off with the bank's collateral.

Admittedly, my boat financing experience is very dated. That said the difference between financing a power boat and a blue water sail boat was that extra effort the bank made to make sure that if i did go somewhere, i was coming back.

The power boat financing went much the same as described above. No different than financing a car.
That's why they want it registered - a marine mortgage can be enforced worldwide that way.
 

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That's why they want it registered - a marine mortgage can be enforced worldwide that way.
Interesting. When i bought my boat it was a private sale. Once i had Title in hand i thought " What would keep me from walking away and never coming back?" What other country would know? I had a clean title in my hand.

Then i registered the boat in NY. There most be a National data base, because my title came back with the lien on it. (I didn't say anything to DMV)

The whole experience was almost frightening. It was harder to buy a car than a boat.
 

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bell ringer
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I am in the market for a sailboat in the 40 to 50ft range I need to finance about 60% of the boat . My question is this, would I be allowed to leave for an extended cruise to the Caribbean if the boat is not paid off but insured.

Yes!
 

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Discussion Starter · #13 ·
my biggest problem is I have lived down here in costa rica so long 17 years that even though my credit score is close to 800 and I own a 400,000 home and a 120,000 condo all paid for I don't have assets in the USA still trying to work around that problem I don't show any current loan history.
 

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Currently even if mostly using fixed return investments can get loans for rates lower the investment returns. Can use investments as colleral or in your case maybe real estate as long as not in trust. Would use insurance broker and bank will require insurance with them a first lien. Did this about two years ago. Took out loan for amount I knew I could pay off whenever I thought it wise. Therefore put around 50% down but they would have accepted less. Other issue is whether you will need to show more than last three years tax returns given I assume you are not filing U.S. Return.good way to figure down payment is end of world thinking " if everything goes wrong can I still pay off bank hold onto the boat and maintain a decent life meeting my obligations to family etc." Boats aren't investments but having to fire sale a boat is especially painful. Unusual time with interest rates so artificially low.
 

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Have you considered purchasing a smaller boat that you can afford, blowing off financing all together and being free? :)
C'mon, man, get real... The last people to have done that were probably Lin & Larry 40+ years ago, when their Panama Canal transit cost them less than 5 bucks :)

I can still hear my dad telling my older brother, back when I was way too young to understand the meaning of his advice, to "Never, EVER finance a TOY..."

Hopelessly old school, of course... But the primary reason I've still been able to keep sailing through the recession since '08, is the simple fact I paid cash for my boat, and routine maintenance and upgrades are the only costs of 'ownership'...

You mentioned AS LONG AS IT'S FUN awhile back, I'm enjoying it immensely, as well... Herb's writing is terrific, as always, and there's an awful lot of good perspective in their story that modern cruisers could do well to take away...
 

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Jon- of course you're right. It's a toy. A hole in the water. A cold shower ripping up thousand dollar bills. But each are different. As long as you can afford to pay cash and if you have the discipline to keep that money aside why not make use of the tax credit(s) for interest, and some improvements such as wind/solar installs? When everything else is paid off that interest credit looks pretty good.
 

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I used the, "It's like a second home, it's deductible" on my first boat, which the owner financed for me.

On every other sailboat I've bought, I saved up the cash and just bought it out right.

You say you have 40 per cent of the price saved. I would find a boat I could buy for that, and right now, sooner or later, you would probably find someone who would sell you their boat at 40 per cent of the asking price.

The older you get, the more you learn that debt is the enemy to all dreams.
 

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bell ringer
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Lets see:

save money for years and years to be able to pay cash for a boat and not sail for years.

or

finance it and get to sail it Now
 

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Barquito
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Do banks in San Jose have $$ to lend? Seems with that much in-country assets you should be able to get a loan to, um, float your boat.
 
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