SailNet Community banner

1 - 12 of 12 Posts

·
Registered
Joined
·
2 Posts
Discussion Starter #1 (Edited)
Ahoy! I have a couple of questions regarding purchasing a used sailboat. I want to sail from San Diego to Mexico for 4-5 months. Do lenders forbid leaving the country with a boat that has a lien on it? I read one particular lender forbid even using a financed boat as a live aboard. How much would insurance cost for a boat worth $50K that would do such a voyage. I have very good credit and approximately 30% down payment. Employed full time as well with a decent income and virtually no expenses.
 

·
Registered
Joined
·
1,730 Posts
Good someone started this line of questions because I have a few also. Such as, is a boat loan like a home loan where one pays points, mortgage guarantee insurance, escrow for taxes and insurance? Is there a closing where you sign a stack of documents? Thinking our next boat will be financed. Maybe some of the answers depend on what state one lives in?
 

·
bell ringer
Joined
·
4,757 Posts
I financed both of my boats and they were different lenders. Neither had any restrictions on boat use and where they could go. But I am sure some might and if you can not live with their restriction just go elsewhere.

Boat loans are more like car loans than house loans. I never paid any points etc and never paid any escrow for insurance.
 

·
Registered
Joined
·
2 Posts
Discussion Starter #5
I financed both of my boats and they were different lenders. Neither had any restrictions on boat use and where they could go. But I am sure some might and if you can not live with their restriction just go elsewhere.

Boat loans are more like car loans than house loans. I never paid any points etc and never paid any escrow for insurance.
I financed both of my boats and they were different lenders. Neither had any restrictions on boat use and where they could go. But I am sure some might and if you can not live with their restriction just go elsewhere.

Boat loans are more like car loans than house loans. I never paid any points etc and never paid any escrow for insurance.
Thanks Don. Do you remember which lenders you used?
 

·
Registered
Joined
·
3,166 Posts
Essex Credit makes boat loans. I believe they are affiliated with Bank of the West for servicing.
 

·
Registered
Joined
·
89 Posts
No Points etc. like a house, but you can deduct the interest on the loan from your Federal taxes if the boat meets the criteria. ( Head, Berth and Galley)
While this is true, one needs to remember that you can only take this deduction if you itemize your federal taxes. With the last changes in the tax code, we found that after 2017, it no longer was worth itemizing for my wife and myself.

We are thinking about financing our first boat as well. Assuming excellent credit, I'm wondering what percentage of the final price of a boat is typically financed, assuming a 5 - 10 year note and a 40 - 50K purchase price?

Jim
 

·
Registered
Joined
·
5 Posts
In my experience, lenders typically look for at least 20% down. Mortgage terms for boats also go out to as much as 20 years, although at the $40-50k purchase price, you may find that unnecessary.
 

·
Registered
Joined
·
7,048 Posts
If you finance the boat you will need to insure it as well. Not just the $1m liability most yards and marinas require but also hull etc. Insurance will dictate where you can go and when and with who. Your premium will vary depending on what you ask for in those variables.
Financing depends on your position and goals. You can pay for the boat off a home equity loan or other secured assets or as a loan/mortgage secured by the boat. The calculus should include the rate of return on your investments, tax credit on the loan interest and interest rate on the boat loan. It’s worthwhile to play with other people’s money if the math works out. You should never take out a loan so large you couldn’t pay it off entirely on demand with existing assets. You never know what’s down the road.
So for $50k judge if cheap liability insurance and otherwise self insure is comfortable for you or full expensive insurance and a loan is better. Judge your carrying costs with the different ways to do this. Then jump in and have too much fun.
 

·
Registered
Joined
·
23 Posts
Ahoy! I have a couple of questions regarding purchasing a used sailboat. I want to sail from San Diego to Mexico for 4-5 months. Do lenders forbid leaving the country with a boat that has a lien on it? I read one particular lender forbid even using a financed boat as a live aboard. How much would insurance cost for a boat worth $50K that would do such a voyage. I have very good credit and approximately 30% down payment. Employed full time as well with a decent income and virtually no expenses.
It is insurance that is a problem, not the loan. Why don't you consider having the boat "delivered" to you in Ensenada? Save the California sales tax. If you are going to be in Mexico for at least 90 days, you can take delivery and avoid the California sales tax. Talk to a good broker. Having the boat already in Mexico is a plus. You save the boring trip from San Diego to Ensenada and from there the Baja coast gets really fun. You will have enough time to go up into the Sea of Cortez (highly recommended) plus sail over to the mainland from LaPaz.
 
1 - 12 of 12 Posts
Top