Boat loans for Young Professionals

[Lake-Effect]

Originally Posted by boatsail

If you don't have a history, you cannot buy a home. IF you make 100k a year and do not have revolving credit cards and cars that have proven you have a track record of payment, you cannot buy a home.

That much I get... yes I had a charge card when I was 20 and a couple of small loans on some equipment. And a car loan once. But the OP has already got the "history" benefit of receiving credit for the truck and the student loan, and probably has a charge card or two...

Anyway, the OP is young and the cards are apparently falling his way, and the leverage angle makes sense if you're ambitious enough... fortune favours the bold.

[Zeb]

Payoff the car, save the money up and buy the boat with cash. Credit history never compares to the mental freedom of being debt free. Just my humble opinion.

- Zeb

[boatsail]

I'm with everyone who says the loan on the boat is bogus. Personally, I don't know why 25k is not spent on the boat, own it in cash. use the rest for refit. Own free and clear and go where you want, do what you want.

I'm going to butcher the quote and cant even cite where it comes from, but here goes:

"wealth is measured by how long someone can maintain their lifestyle without having any income come in" The longer the time, the more "rich" your are.

"i make myself rich by making my wants few"

both quotes butchered, but you get the general idea. I am not a fan of debt.

Personally, I sell homes. Due to the decline in home values.... For the most part, in my area, if you bought a home from 2006 to present day, you cannot sell it without coming out of pocket with money. This generation is going to have it really tough. I'm 34 and see it all day long. Debt up to eyeballs. Homes loans they cant get out of due to fallen values. Jobs that are not paying as much. Debt from school that does not equal the pay the degree generates. Is going to be a rough bunch of years ahead. There needs to be a different mindset in regards to being a slave to debt. The current mindset is not working.

[cheoah]

I purchased a 1988 PAcific Seacraft in 2010 and financed around 50K for 15 years at around 7%. It is the highest interest I pay, but only way I could get into it. For me it is a huge investment, but being my third boat, and having sailed for a while now, I bought the boat that I'll keep for many years. There's no real good financial angle to it (except the interest is tax deductible - for now), and there are all sorts of ways to blow your money. I do own a home though (39 yo with a 14 and almost 18 yo), and I'd highly recommend putting your money into a rental or something with the market the way it is. None of my business, but FWIW

Sterling Acceptance is a good company to work with, I recommend you give them a call. My loan is with Suntrust. You will have to have very good credit - over 720 or something. They don't really care about some of the stuff you've mentioned - like paying it off in 3 years. They're going to want to give you a term and then it is your business how you pay it from there. Look out for payoff penalties. Sometimes they last for the first few years of the term.

It is pretty hard to get a loan on a boat without stellar credit and with the boat being over 20 years old like others said. My first boat I financed in 2005 they just threw the money at me - but that's all different now. You'll need 10K or more liquid too, along with the good credit. Call Sterling Acceptance or some similar place that can lead you right through it, and prequalify you. I'd caution you like others not to go into too much debt, as while it seems improbable now, you will very likely want to sell that boat in a few years, in which case you'll more than likely lose money - if it ever sells. Negotiate hard, and only buy something with good resale value.

Good Luck-

[BlackOak]

the only thing I have gone into debt with was this house. Paid cash for the rest. If I was in your shoes, I would buy a boat with a solid hull, and redo the interior as the money flowed in. You could live on it, and make it they way ya want, as the cash permitted. That way you can experience the liveaboard aspect, make a boat you would love for years to come, and learn everythiing about your boat in the process and how to fix things as they break over time. Going into a serious debt with a boat is not a good idea!

[jpmccros]

Boatsail. I agree with you debt is evil. I would even argue that it's not just my generation, but has been an issue for everyone since the 1920's. That's america and that's why we feel like we can have/want what ever we desire. To the outsiders the rich appear rich, but like you said if they lost their job, they would fall hard and fast.

My plan is to take advantage of the option our country has to borrow money. Yet my plan is to get out of debt in 3 years. Many people my age are buying houses and are instantly locking themselves into a life of work to survive and stay afloat. I want everything paid off in 3 years and then start exploring the world...in my boat, bouncing from job to job to support my immediate needs, and not to make a loan payment.

Many will argue 3 years of debt is bad. But basically I have to work to pay my rent so even if everything was paid off, still making payments. I believe 3 years is acceptable. Any more and the potential for loosing your job increases and everything falls apart. Does this make sense?

[Capt.Alex]

Contact Sheryl Boddy at Essex Credit. She is great. She is processing mine as we speak!
sboddy@essexcredit.com

[jpmccros]

Thanks capt.Alex, I will do that.

[JRM]

Originally Posted by David_Old_Jersey

Or Owner finance? The price is likely a "fuller" sale price.........

+1

This is how we did it. I went round and round trying to figure out how to finance an older boat. Several of the "marine" places were more than happy to loan me $200K on a newer boat, but not $40K on an older one. Took a stab at an offer where the previous owner carried the note, and beyond negotiating a shorter term (down to three years), they accepted.

The only place I found that was willing to loan on the boat was my occupational credit union. However, they won't loan on any boat that doesn't have a trailer (so they can easily come repossess it). Didn't find that little nugget out until well into the process... I never thought to mention it didn't have a trailer as it's a 40' sailboat, nor did they think to ask because "of course all boats have trailers, how would you tow one without it?"

I guess it shows the regional differences, but if I could rent a house out here for $675 a month I'd be all over it. If you have a good income as described, that's chump change, doubly so if the young lady joins you.

I know it seems hard, but I'd wait a year and save. Toss every spare nickel into savings. Maybe two years. Here's a few thoughts...

You already have access to a sailboat, so you aren't missing out on sailing by not buying. Also, while they do exist, the live aboard boat that regularly leaves the dock is a rarity.

Your $675 in rent is probably more than a slip, but likely not too much. So you're not "throwing that money away" per se, because you'll be tossing almost as much at a sailboat to live on it, above and beyond the cost of the boat and maintenance.

While I would never suggest anyone live in sin , I have developed a theory that boats (of any kind) are like relationship amplifiers. Every little thing gets amplified several orders of magnitude. That goes for both the good and the bad. Owning a boat will make a good relationship better and a bad one worse. And while it's just a theory, it has excellent correlation in the samples I observe. Maybe invite the GF to share the house and the rent and take baby steps.

I'd definitely pursue the owner carry option. It's your best bet on an older boat, barring a rich uncle in the family. In the meantime, I'd save like mad and pay off the student loan by throwing extra monthly principle at it. And don't be afraid to look at cheaper boats. While there is no such thing as a "cheap boat" you might find something less expensive that you like.

Good luck,

JRM

[jpmccros]

Thanks JRM, boat slips around 300 here. And yes its good relationship test material which she has done well during our charter experiences.

[Dsanduril]

I second Mike O'Reilly, if you can't get satisfaction anywhere else try a credit union. I'd recommend mine, except we're on opposite sides of the country. I find them friendly, easy to work with, and able to think a little outside the box.

In your general neck of the woods it looks like the TVA has several CUs, a resourceful young professional ought to be able to figure out a way of joining one. The Knoxville TVA Employees CU says it is offering 2.49% for up to 66 months on used boats (https://www.tvacreditunion.com/rates/consumerrates.php). I'll leave finding out the details to you. At mine, they'll loan up to 100% of the Blue Book value (not that I'd recommend that, I'm in the "I hate debt" camp myself).

[jpmccros]

I was going to go by there and see what they say. I'm a member so that may help.

[Ishmael]

Originally Posted by boatsail

"wealth is measured by how long someone can maintain their lifestyle without having any income come in" The longer the time, the more "rich" your are.

"i make myself rich by making my wants few"

I LOVE that. It's exactly the point I've been trying to make to "the general" (I can't call her "admiral" because she wants NO part of my water world fantasy).

[boatsail]

Originally Posted by Ishmael

I LOVE that. It's exactly the point I've been trying to make to "the general" (I can't call her "admiral" because she wants NO part of my water world fantasy).

I think it's Thorneau or Capt Ron, can't remember;-)

[denverd0n]

Originally Posted by jpmccros

Does this make sense?

Yes, what you are doing makes sense.

Someone mentioned you have to have credit already, because you got a student loan. Nope. Doesn't work that way. GETTING a student loan doesn't take anything at all. People with the worst credit around can get a student loan, if their school helps. It is paying it off that establishes a good credit rating.

Which brings up another thing. Talked with a fellow once who said "I have a perfect credit rating! I've never borrowed any money, so I've never been late with a payment!"

Again, as others have pointed out, nope. Doesn't work that way. No credit rating is the same as a very, very bad credit rating. To have a good credit rating you need to borrow a bit now and then, and pay it off in full, on time, and not too fast.

What's that? Not too fast? That doesn't make sense. If I get a 10 year loan but pay it all back in two years I'll have a great credit rating, won't I?

Well, again, nope, doesn't work that way. The credit agencies want to see an established history, over a number of years, of making payments on time. A home mortgage, that you pay on time every month for years and years, is just about the biggest boost that your credit rating can get. A loan that you pay off too quickly certainly doesn't HURT your credit rating, but it doesn't help it all that much, either.

Anyway, good luck to the OP. Sounds to me like you've got a pretty reasonable plan laid out.