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Old 03-12-2009, 16:53   #1
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Financing Sucks

So you know what sucks? Financing a boat right now.

Earlier my gal and I found a boat we loved. A westsail 32. We applied for financing and found that we were denied due to them not wanting to put money on a 30+ year old boat. So what did we do?

We saved, for about 6 months. Got around 12k to put down cash and found a boat we loved that was only 20 years old. Called back. Now they only finance boats of 10 years old. Well one bank is financing older, but in order to qualify we had to have PERFECT credit. I was denied because in 1996 I was 35 days late on a credit card payment.

I guess we'll just save up and go buy cash in hand when the right one comes along.
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Old 03-12-2009, 17:58   #2
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Do you own your house? How about a Home equity loan? interest rates would be lower..

You could be 2 days late on a credit card payment...and they list it as 30
it's idiotic...

Do you know that a Banks largest source of income these days come from late fees and penalties.......
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Old 03-12-2009, 17:59   #3
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it'll be better anyway to pay cash for the boat. If you want to cruise you'll have no note to pay off beforehand.
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Old 03-12-2009, 18:09   #4
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Quote:
Originally Posted by Tempest245 View Post
Do you own your house? How about a Home equity loan? interest rates would be lower..

You could be 2 days late on a credit card payment...and they list it as 30
it's idiotic...

Do you know that a Banks largest source of income these days come from late fees and penalties.......

I pay a note on the house. And I just refi'd to lock down the low rates so I don't think that is an option. Its my only debt.

I know the banks are struggling. They'd rather lend on sure bets than boats. The boat loan people were really sad on the phone. I could tell they're sad to pass up giving me a loan because the underwriters are saying no.
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Old 03-12-2009, 18:10   #5
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it'll be better anyway to pay cash for the boat. If you want to cruise you'll have no note to pay off beforehand.
That is true, but we'd like to have the boat for a while before going cruise and we would have paid it off within a year anyhow. So now, we'll have a year of no boat with a cash sale rather than a year of boating experience and a bit of financing expense. Which to me is the poorer of the two options. I'd rather have another year with the boat before cruising.
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Old 03-12-2009, 18:25   #6
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I spent years digging myself out of debt. Well, revolving debt anyway (credit cards). I'm a cash person now. My only debt is my mortgage and car note. I didn't get the sleekest, sweetest boat, but it's all mine. In this economy, if I suffered an unexpected job loss, I could sell it and use the money instead of just paying off the note on it.
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Old 03-12-2009, 18:48   #7
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Quote:
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Do you own your house? How about a Home equity loan? interest rates would be lower..
That's what I did. I'm aiming to pay it off in 5 years, & I figure I need that much time to build up sailing experience & improve my skills anyway. Of course, that assumes I can spend 5 more years in my job without going stark raving bonkers! I suppose I could downsize the house in that case...
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Old 03-12-2009, 19:01   #8
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Immediate gratification...

Why not fly down and do a week's charter with the money you're not spending?

By not buying now you're saving about a third of the purchase price each year. Might even pay for a few more charters.

Get a close look at some newish boats.

And you'll be getting that all important experience in a way less stressful atmosphere.
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Old 03-12-2009, 19:24   #9
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We financed a 30 year old boat using wells fargo. We financed about 50% but I think they would have gone higher.

Having said that the whole experience was a nightmare because they don't know what they're doing and we're still waiting on the final paperwork to come through nearly two months after paying the boat off.

We've got a full rundown of all the things that went wrong with them and will post in the future, when the situation is finally closed.

On the other hand Target9000 having had the boat in our possession while financing has been a big win in terms of getting comfortable with her and getting a headstart on projects that need doing - so I agree with your outlook that not all financing is bad.
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Old 03-12-2009, 19:32   #10
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Why not fly down and do a week's charter with the money you're not spending?

By not buying now you're saving about a third of the purchase price each year. Might even pay for a few more charters.

Get a close look at some newish boats.

And you'll be getting that all important experience in a way less stressful atmosphere.
While that is appealing it is also very expensive.

Plane tickets to a place to charter = 1000-1500
Charter for a week = 5000?
Hidden costs of vacations = 1000-2000? (we've never not had this happen)

So I'd rather take that 6-8k for a vacation/charter and sink it into more payment for the boat. Once I have the boat, I can take it out whenever my schedule allows. And I'll be getting experience on MY boat and in MY waters. 8k is almost a quarter of the cost of the boats we're looking at.
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Old 03-12-2009, 19:41   #11
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I financed 20% of the boat with Key Bank about 18 months ago because I didn't want to sell stocks. BLOODY FOOL. Such outstanding wisdom, in hindsight. But in any event, Key Bank was good to deal with at the time.
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Old 03-12-2009, 19:58   #12
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The Banks are holding on to the stimulus windfall from us.

I know a couple brokers who have gotten out of the business because folks can't come up with financing.
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Old 03-12-2009, 20:30   #13
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If the seller really wants to sell and is not under a loan him/her self, he/she may be willing to carry a note to move the boat and get out from under the maintenance and up-keep. I'm guessing the Westsail 32 was under $50K, likely closer to $40K, in which case your $12K down is sizable. Offer a deal paying 6% to 8% ammortized over say 7 years. After a year or so you should be able to refi (which is easier than a new loan) with a conventional 50% LTV loan. You may also find that your local lender, with whom you already have a business relationship, is the best source for financing when you refi.

FWIW...
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Old 03-12-2009, 21:52   #14
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Agreed, the banks aren't hurting. they are maximizing their profit potential.
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Old 04-12-2009, 04:44   #15
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i wanted to buy an aluminium yacht (alubat ovni) and was told by them that they only finance up to 50% on aluminium boats and up to 80% on grp boats...

so now i'm gone buy a cheaper grp yacht cash as i'm not prepared to play their game.
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