Buy another home to buy a boat?

[8uddha]

Moved to the US and credit score is mid 700’s with a 45k auto loan and after two years. Banks requiring 2 years of a US home loan. I don’t need/want to buy another home, I have several. In the US, do all banks require US home ownership to buy a boat?

[Catalier]

When I was 18, I started working full time. I thought buying a house was a good idea for me. I had no credit history. Went to bank, asked for mortgage, was told I needed to build credit first. Bank lady said "buy a boat or motorcycle or new truck first, then after six months come see me again. So that's the story of how a 2001 honda shadow sabre 1100 helped me buy a house.

Credit is sometimes weird, and nearly always unfair.

[8uddha]

Seems like a highly risky time to take out a home loan. Are there any other options like owner financing?

[Catalier]

Finding the boat you want (difficult) with an owner willing to self finance (very difficult) seems like difficulty².

[S/V Illusion]

Old school theory - if you need a loan to buy a boat (or any depreciating asset), you can’t afford the boat.

New school theory - just whip out the credit card/application

[Shrew]

Originally Posted by S/V Illusion

Old school theory - if you need a loan to buy a boat (or any depreciating asset), you can’t afford the boat.

New school theory - just whip out the credit card/application

Bah!!!! I hear this occasionally and it's nonsense. Ideally, you want down payment and principal payments to stay ahead of deflation. However the true cost of a boat is to factor in the total number of dollars out the door over the term of ownership, divided by the number of months of ownership. This is the cost of boat ownership.

Either you're happy with that average monthly expense or your not. If you can afford it, you can afford the lifestyle. If you can't, then you can't.

Approaching it like an equity investment is ridiculous. Based on those money principals, I'd leave the sum of my wealth to survivors. I'm not working this hard to enable someone else to benefit from my labor. I'm enjoying life NOW.

[S/V Illusion]

Originally Posted by Shrew

Bah!!!! I hear this occasionally and it's nonsense. Ideally, you want down payment and principal payments to stay ahead of deflation. However the true cost of a boat is to factor in the total number of dollars out the door over the term of ownership, divided by the number of months of ownership. This is the cost of boat ownership.

Either you're happy with that average monthly expense or your not. If you can afford it, you can afford the lifestyle. If you can't, then you can't.

Approaching it like an equity investment is ridiculous. Based on those money principals, I'd leave the sum of my wealth to survivors. I'm not working this hard to enable someone else to benefit from my labor. I'm enjoying life NOW.

and your finance company thanks you.

[8uddha]

The prices of real estate don’t seem in line with salaries. And some other countries don’t profit from schools or basics like electricity. Seems like a massive bubble and buying a home is the last thing I want to do here. I’m going to wait for the prices to collapse further.

[Chotu]

Absolutely not. You don’t need a home loan to qualify for a boat loan. You need the right income multiplier, good credit, steady employment and to look like a good risk.

[roverhi]

Sounds like you are new to the US and have nothing more than a desire to live here to keep you here. The bank may be questioning loaning money to someone who could take the boat and sail back to wherever and default on the loan. They want you to develop deeper roots before they give you a loan on a portable asset.

Don't think loan officers have the latitude to make decisions that they used to but. When I bought my second boat had a very nice conversation with the loan officer/branch vice president about my love of sailing and previous experience living aboard. Was able to get a loan with payments that were more than 50% of my gross income because of connecting with the loan officer. Of course, thanks to Uncle Sam had a guaranteed income that was only going to go up.

[Sailor647]

Move all of your bank accounts and credit cards to a local Credit Union. Transfer your auto loan if you can - might even get a better rate.

Credit Unions are much easier to deal with than the big banks. After you establish a relationship with them, and they can see what payments are going in and out of your accounts, they are usually a breeze to deal with and will likely approve your boat loan, which can be considered a primary residence in some states.

Dealing with Credit Unions is far easier than dealing Bank of America, Wells Fargo, US Bank and the like.

Good luck!

[Hardhead]

Originally Posted by 8uddha

Moved to the US and credit score is mid 700’s with a 45k auto loan and after two years. Banks requiring 2 years of a US home loan. I don’t need/want to buy another home, I have several. In the US, do all banks require US home ownership to buy a boat?

Could you take out a 2nd mortgage, on any equity, in your existing real estate? That might be the simplest solution if it's doable.

[belizesailor]

Originally Posted by S/V Illusion

Old school theory - if you need a loan to buy a boat (or any depreciating asset), you can’t afford the boat.

New school theory - just whip out the credit card/application

Im old school, if I cant pay cash for a toy then I dont need it.

Financing a depreciating, high cost to carry, non-income producing asset is just adding insult to injury.

Of course, many will make the argument that they can beat interest rate cost thru clever investing...sort of like claiming to be able to predict the future.

[zemurray]

Originally Posted by belizesailor

Im old school, if I cant pay cash for a toy then I dont need it.

Financing a depreciating, high cost to carry, non-income producing asset is just adding insult to injury.

Of course, many will make the argument that they can beat interest rate cost thru clever investing...sort of like claiming to be able to predict the future.

it doesn't take clever investing at all. It just takes time and a low finance rate. 5 or 10 years, it can be a risk. 20, it wont be. A rolling 20 year return over the life of the SP 500 has always beaten current interest rates. The worst 20 year return ever was 6.4%. The best was 18%. Compare that with a 4 or even 5% finance rate. An additional risk mitigation to this is if you put enough down payment on the boat you can always get out of the boat and still have your investment funds making money. It’s just a different approach. Same reason I’m not paying my house off early although I could pay it off right now if I wanted.

[wolfgal]

to get into debt is voluntary enslavement.
freedom is another word for nothing left to pay.

if i had your car (it must be worth something as you've got a 45k debt to pay on it), i'd sell it, buy the boat in cash and a bicycle and make those changes in my life to make it work.

good luck to you!


wolfgal