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Old 08-10-2011, 19:22   #46
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Re: Financing a Liveaboard

Thanx for the feedback-I soon found there was quite a bit on this in other threads.Think I need to find some coastal thoroughbred tracks...
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Old 14-10-2011, 19:33   #47
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Re: Financing a Liveaboard

A financial planner once told me that you should never finance a boat because they don't appreciate...and, if you can't afford to watch her sink, you can't afford a boat.
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Old 14-10-2011, 19:36   #48
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Re: Financing a Liveaboard

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Originally Posted by Amapola View Post
A financial planner once told me that you should never finance a boat because they don't appreciate...and, if you can't afford to watch her sink, you can't afford a boat.
Guess you shouldn't finance a house either.

Financing anything is ok as long as it is within reason and within budget. If you can afford to finance a boat and afford the insurance so you can pay your loan if it sinks, then why not finance?

It's all about living within your means.
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Old 14-10-2011, 20:46   #49
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Re: Financing a Liveaboard

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Originally Posted by maytrix View Post
. . . It's all about living within your means.
Absolutely dead on - but sometimes your means, means not having insurance or not being able to afford it. I suspect a lot of the 30 ft or less boats cannot afford comprehensive hull insurance and the boats are too old anyway to make it cost effective.

- - That's where the idea came from for "If you cannot afford to watch it sink, don't buy it." Same goes with spending $400 +/- on a professional marine surveyor on a $2500 boat. It is not cost effective.

- - On the other hand, knowledge and experience and proper outfitting of such boats can be your "insurance" against having to watch it sink.

- - Back to Topic, getting a loan on a small old boat most probably is not going to happen unless you have enough personal credit to get a signature loan. To a bank an old 30 foot boat is not good collateral.
- - So buying it outright or doing the direct buyer to seller type financing is about the only way to finance such a boat.
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Old 14-10-2011, 22:16   #50
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Re: Financing a Liveaboard

I'm over banks.

Two words: Credit Union.

Our last boat located in CA was financed by BECU located in Seattle.

We were livaboard, and had ZERO problems with them.
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Old 15-10-2011, 11:00   #51
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Re: Financing a Liveaboard

Thanks to everybody for their imputs. We're still paying down debt as fast as posible and we have decided when we are ready that we'll look into boats that we can live on comfortably and we'll put down a large percentage of the purchase so we don't have that burden over our heads. Hopefully in a couple of years the housing market can come back a little and make all our lives a little easier. Thanks again.

Dave
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Old 30-12-2011, 10:19   #52
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Re: Financing a Liveaboard

Hi, I was looking for this information too. The primary lender that I have found that will finance a liveaboard is Essex. I completed a loan application with them online today. I felt better about not having to hide the fact that I intend to liveaboard. As for others out there, I am not sure. This has been the first one that I have seen even mention a liveaboard financing situation. Good Luck.
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Old 30-12-2011, 12:40   #53
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Re: Financing a Liveaboard

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Originally Posted by Amapola View Post
A financial planner once told me that you should never finance a boat because they don't appreciate...and, if you can't afford to watch her sink, you can't afford a boat.
That kind of financial planner sounds like one taught within the industry selling insurance, annituties and retirement plans.

There is nothing wrong with leveraging your financial position so long as you keep it within your means and can hedge against financial losses. A house may go down in markey value, but it's functional value remains to the owner. Keep making the payments for the function it provides and later the market value will likely return.

A boat, most boats do not appreciate in value, so what? It's the cost of ownership and your payments should reflect that meaning your payments should be enough to keep your liability less than the value of the item financed. Making an additional payment to principle will do that.

This is always a "use of funds" question and an additional payment may not be the best use of your money. Alternative investments may be a better soultion and allowing some of the "profits" gained to be reduced by the depreciation of other assets while keeping them. This will keep your head above water too. Few assets appreciate, most are consumed and you need to consider the consumption as part of the cost of ownership.

I have never heard of anyone getting ahead by buying a new car or other toy. I have heard of many people buying an older toy, making the necessary repairs and improvements and making money for the efforts, like a house flipper, you could be a boat flipper! Unless you're really a pro and know the market I would not suggest flipping boats, I'd think it would be worse than real estate. But you might break even or do a little better.

Interest is deductable if you itemize as a second home, but that may change soon.

I know a guy who bought houses using credit cards (bad idea for most everyone BTW) but he would load up a card (has several) and then transfer the balances to low interest offerings or even no interest new cards for awhile. This might help in a short term, like to make the sale, but never finance long term assets or holdings with short term financing as those loans can come due and if you can't refinance it, you lose it.

X2 on using a credit union. Other sources might be cash value life insurance policies, borrow it and forget it so long as you have enough of it. Refinance the home, I'd suggest not taking out a second where rates are today. Other assets, like a car or RV might be easier for most lenders to jump on. Another option is get the seller to finance the boat, but do not overpay for the boat for the right to finance it or pay a higher rate than the real costs of financing elsewhere. There are advantages to the seller financing the deal, any gain on the sale (I know, not likely but could be if it was in a business name) will be amortized and the interest is interest income, taxed at a lower rate....which means the sale price could be less and carry it at a higher interest rate. If you have other assets, consider pledging those instead of making a large down payment if your cash is better off doing something else.

I kinda agree with the watching it sink statement. If it's something you can't afford to watch sink in the water, get it insured, if it's something you can't afford to watch in value, you can't afford a boat, because the value will most likely sink. Grin and bear it! Good luck...
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Old 29-01-2012, 06:48   #54
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Re: Financing a Liveaboard

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Originally Posted by Wavewacker View Post
That kind of financial planner sounds like one taught within the industry selling insurance, annituties and retirement plans.

There is nothing wrong with leveraging your financial position so long as you keep it within your means and can hedge against financial losses. A house may go down in markey value, but it's functional value remains to the owner. Keep making the payments for the function it provides and later the market value will likely return.

A boat, most boats do not appreciate in value, so what? It's the cost of ownership and your payments should reflect that meaning your payments should be enough to keep your liability less than the value of the item financed. Making an additional payment to principle will do that.

This is always a "use of funds" question and an additional payment may not be the best use of your money. Alternative investments may be a better soultion and allowing some of the "profits" gained to be reduced by the depreciation of other assets while keeping them. This will keep your head above water too. Few assets appreciate, most are consumed and you need to consider the consumption as part of the cost of ownership.

I have never heard of anyone getting ahead by buying a new car or other toy. I have heard of many people buying an older toy, making the necessary repairs and improvements and making money for the efforts, like a house flipper, you could be a boat flipper! Unless you're really a pro and know the market I would not suggest flipping boats, I'd think it would be worse than real estate. But you might break even or do a little better.

Interest is deductable if you itemize as a second home, but that may change soon.

I know a guy who bought houses using credit cards (bad idea for most everyone BTW) but he would load up a card (has several) and then transfer the balances to low interest offerings or even no interest new cards for awhile. This might help in a short term, like to make the sale, but never finance long term assets or holdings with short term financing as those loans can come due and if you can't refinance it, you lose it.

X2 on using a credit union. Other sources might be cash value life insurance policies, borrow it and forget it so long as you have enough of it. Refinance the home, I'd suggest not taking out a second where rates are today. Other assets, like a car or RV might be easier for most lenders to jump on. Another option is get the seller to finance the boat, but do not overpay for the boat for the right to finance it or pay a higher rate than the real costs of financing elsewhere. There are advantages to the seller financing the deal, any gain on the sale (I know, not likely but could be if it was in a business name) will be amortized and the interest is interest income, taxed at a lower rate....which means the sale price could be less and carry it at a higher interest rate. If you have other assets, consider pledging those instead of making a large down payment if your cash is better off doing something else.

I kinda agree with the watching it sink statement. If it's something you can't afford to watch sink in the water, get it insured, if it's something you can't afford to watch in value, you can't afford a boat, because the value will most likely sink. Grin and bear it! Good luck...

So your advice to those who owe more on their boat than it's worth is . . . . . .
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