Boat Loan APR?

[imagine2frolic]

Paid cash in Sept. 02 for Imagine. She still manages to eat money like a male teenager eats burgers & fries.....lololol

[Rhosyn Mor]

Paid Cash for 38 foot Jeanneau. I do think the concept of using loans might be justified if I made enough money to qualify for a loan or had any other assests. Everything I have is invested in the boat, its maintenance, the cruising Kitty and the vessel insurance.

[Tspringer]

We just closed 2 weeks ago on a 1981 Stevens 47. I financed $100K for 20 years at 6.5% through eboatloans.com and the loan ended up with Key Bank. Payment is $745 per month. It was easy as pie.... I didnt sign anything nor provide any paperwork or do ANYTHING prior to closing.

I could have paid cash, I have the funds. I chose not too because I think paying cash in my case would be stupid.

10 years ago I purchased a small house in a "questionable" neighborhood near downtown Atlanta for $41K. I rented it out for $750 per month. Over a 10 year period of time, it was vacant for a total of 10 months, almost all of that right before I sold it as we did renovations. Late last year, I spent $65K on renovating it and it just sold for $225K.

I am doing more of that. LOTS more of that. Instead of putting $100K into a boat and thus saving $750 a month in payments, I can put the same $100K into real estate that will yield over $1000 per month in rental income AND is likely to increase in value over the coming decade.

With a boat loan available at 6.5% and that interest being tax deductible....unless your just opposed to taking an active roll in your own financial future I think paying cash is crazy.

Now taking out a boat loan and taking on that payment because you do not have the cash and thus you do not have income producing investments that yield you a higher return than the boat loan costs..... thats a different ballgame. A losing ballgame. Don't play.



Terry

[shane86]

I have been reading the threads with great interest. About financing boats at this point I am considering purchasing a boat in California USA, sailing it back to Australia not for cash returns but a one way cruising holiday down the West Coast of USA/South America and then across to Australia.
Wondering if anybody can give me information on the best time of year to leave USA for confortable cruising down the West Coast.
And best route for the crossing to Australia, and maybe crew to assist.
Or any other relative information.
Cheers
Shane 86

[Amgine]

Isn't really a good place for coastal cruising.

If you're leaving from Seattle/Puget Sound, best departure is mid-late Spring - perhaps May.

If you want to see more of the Americas, you can head down coastwise as far as Panama or even push on to Colombia, but no further south. The best route is actually to head direct to Hawai'i or follow the coast to San Francisco and then off for Hawai'i. If you decide for more touring, plan on joining the BajaHaHa - a great group of boats heading south from southern California every fall, timed to minimize exposure to cyclone season.

From Hawai'i there are far too many possibilities - it's the cross-roads of Pacific. You may want to keep your options open and make final route decisions once you're there.

[shane86]

Thank you for your reply. I live on the East coast of AUS Gold coast, And sail a 95 .720 farrier tri . Own most every thing out right including house ,good credit rating aaa.what I am getting to, Is it possible for me to finance a boat in the USA to bring back to AUS. Beter % is the reason being. There could be a flaw in my thinking.

[Amgine]

Well, let me remind you that sailing the boat back to Australia will be considerably more expensive than shipping it. The wear and tear on the vessel and gear, the cost in food and maintenance of crew, the fixed costs of insurance and financing, all can be reduced or eliminated by getting the boat to AUS as fast as possible on deck of commercial shipping.

But it's more fun/romantic to do the delivery yourself, if you have the leisure and financial wherewithal to do so.

[shane86]

hi imagine ,shipping is quite xy. and no fun. funds ok .its another part of the anatomy that has me concerned. hense the ? on direction .and time of year. shane 86.

[Amgine]

Well, I'm in Vancouver, Canada, which is just up the coast from Seattle (where I have also lived.)

Leaving from this region means heading out the Juan de Fuca Strait, and traveling down the US west coast. The prevailing weather is controlled by the northern Pacific high. You will probably want to move down this coast during the "dry season", roughly May - October, when the high moves north. The winds along the coast at this time are usually WNW to NW, a beam to broad reach, and the current is moderate and favourable.

At about 40°N (or even further north, perhaps just south of the Columbia River, but for sure before Mendocino) you need to decide if you're going to stand off to Hawai'i, or the direct non-stop to Sydney, or if instead you're going to wander down through California, Mexico, etc.

If going to Hawai'i during the dry season, steer direct taking into account the local currents once you pick up the trades. To continue south-eastward down the coast, keep about 100 miles off shore and you should have favourable winds and currents to about San Francisco. British Admiralty Ocean Passages for the World says to pass westward of, and in sight of, Isla Guadalupe (you'll be hitting the ITCZ about here.) I don't have any personal experience here, so I suggest you talk with local sailors, read 39th parallel (magazine), and talk with the Baja HaHa organizers.

The direct to Sydney is much the same as to Hawai'i. Down the coast with good offing, trying to skirt the eastern edge of the Pacific high, and turn curving westward as soon as you're under it. Once in the trade, steer direct to Sydney, crossing the equator about 170°W, and passing west of Fiji, SE of New Caledonia, from June to August. At other times of the year cross the equator between 150-155°W, pass southward of both Tongan and Fijian islands. Make the Australian coast south of Sandy Cape. [British Admiralty passages. They reference the Yokohama to Sydney route for some details.]

[Mermaid]

Well, my bank told me that we would have no problem getting the boat loan for the amount we wanted with no money down (we have our mortgage with them as well as CD, etc.). So, they knew they had plenty of our "assets and credit was great etc. I wanted to get a pre-approval letter and found out that the underwriter explained that they don't finance boats to be used as liveaboard. (I thought it would be relevant for them to know that we would be renting our home to count it as "income" and not a liability and that we would be using the boat to live in - otherwise they would have wanted rental costs.) Apparently they are not the only ones that will not finance a boat if they know it will be used as a liveaboard as I found through 2 other companies. Does anyone know of any companies that will? Great credit, no bills except for the house, good income. Why don't they finance the boats if used as liveaboards? The house rent would bring more than we would have to pay for the boat and we wanted to get our dream underway... Not giving up yet!!!!

[gettinthere]

Mermaid
Contact Trident Funding. They specialize in boat loans. They have plenty of sources for livaboard financing. You will probably have to put 20% down.

[ssullivan]

People... it's important in the USA to never mention that "L" word when getting a cruising boat loan. It's loan origination suicide. The boat is to be used on weekends, in addition to your wonderful full-time land home, moored within 20 miles of where you live.

Banks don't lend on liveaboard boats because they think you can up and leave without paying.


Banks also lend based on past performance, rather than future predictions of things like "rental income." Show them what you have now, where you live now, and what you have and where you lived in the past. Buy a boat for the "weekends" and a "summer vacation" and then change you lifestyle later.

[Pblais]

Show them what you have now, where you live now, and what you have and where you lived in the past.

Stick to the facts as they are. Predictions of the future only raise doubts and adds uncertainty. Doubts and uncertainty indicate more risk. Solid past performance is stability and less risk. Discuss your hopes and dreams with anyone but not your banker. Why would anyone give you money based on something you have not done yet and only claim you will do. It can't help you but can hurt you.

Your investment broker yes. They want to make money so they need you working toward a goal for them to make money too. They want you looking ahead and reaching for things unseen.

Why do people buy boats: "for the weekends and a summer vacation"

It's always summer some place if you know where you are going.

[oldsalt_1942]

ZERO %!!! I'm a big fan of the ONE EASY PAYMENT form of financing. I'd rather have a smaller boat I can purchase that way than something requiring a monthly payment. Besides, the idea of the boat is to get away to exotic locations where the mail system is unreliable and the checks wouldn't reach the bank on time anyway.

[oldsalt_1942]

Originally Posted by ssullivan

HERE HERE!! You are my inspiration. I'm trying desperately to get to that point right now - hence my other long winded thread on how to dump this boat (really how to dump the loan - the boat is great!) and just buy something cheap that serves the same purpose.

It's actually HEAR! HEAR!, but that's the old editor coming out in me...like another pet peeve of mine where people use "jealous" when they actually mean "envious." But I totally agree with your sentiments.