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Boat Financing
Other that what the dealer offers and BoatUS, are there any other places to
look for new boat financing? -- Peter Aitken |
Now that's a great idea!
"Harry.Krause" wrote in message ... Peter Aitken wrote: Other that what the dealer offers and BoatUS, are there any other places to look for new boat financing? Brokers, boat loan companies, credit unions, your bank. The same kinds of places that finance new cars for the most part finance new and sometimes used boats. |
Not sure if you've already checked with the boat dealer and you didn't like
what their banks were offering or not, but when we bought our current Baja, the dealer got us a much better rate and term at a local (PA) bank than we were able to get from our local bank (WV) or our primary credit union (DC). Sometimes the dealers actually can do better for you. -- G.D.Smith Harpers Ferry, WV FOR SALE: 2003 Swee****er 22' Pontoon Boat http://ICanHelp56.homestead.com/gs_pontoon01.html FOR SALE: 1999 Fleetwood Mallard 37' Travel Trailer http://ICanHelp56.homestead.com/Mallard001,html "Peter Aitken" wrote in message m... Other that what the dealer offers and BoatUS, are there any other places to look for new boat financing? -- Peter Aitken |
Specialty marine lenders. These are firms that know boats, aren't
afraid to accept a boat as collateral (iow-won't tie up your house in most cases), and exist in a competitive environment. Wherever you finance, make sure you compare. Make sure that "sweet!" deal on the new boat itself isn't offset by less than competitive but oh-so-convenient financing. Here in the Pac NW, we have marine specialty lending companies like Essex, Trident Funding, Seacoast, etc. There are undoubtedly similar companies but perhaps with different names in your area. |
Peter,
Got a home with enough equity for the boat? If you do that's a great, tax deductible source of money. Once you set it up, you can "pay cash" for your boat and walk out with the title. Negotiate the deal first since some dealers rely on financing kick backs for additional profit. There's nothing wrong with that but shame on them for not offering a fair deal from the start. Dan Peter Aitken wrote: Other that what the dealer offers and BoatUS, are there any other places to look for new boat financing? |
Dan Krueger May 31, 8:06 pm show options
Newsgroups: rec.boats From: Dan Krueger - Find messages by this author Date: Wed, 01 Jun 2005 00:06:33 GMT Local: Tues,May 31 2005 8:06 pm Subject: Boat Financing Reply | Reply to Author | Forward | Print | Individual Message | Show original | Report Abuse Peter, Got a home with enough equity for the boat? If you do that's a great, tax deductible source of money. ********** Tilt. If the money is used to buy a boat, the interest will not usually be deductible on a h.e. loan. The money needs to be used for education, home improvements, or other items on a short list of approved expenditures. Nothing stops a lot of people from lying, of course- but they are liable for back taxes, penalties, and interest when and if caught. However, if you take out an actual boat loan the interest on that *may* be deductible as a "second home" if the boat meets certain minimal requirements for accommodations and you are not already writing off the interest on a vacation cabin, motorhome, or etc under the "second home" provision. I would say, never, ever, ever, put your home at risk to pay for a toy. Take out a loan using the car, boat, airplane, camp trailer, whatever as collateral. If things go unexpectedly to hell, you may be able to stiff the bank for the payment on the boat or vehicle. It will ruin your credit, but if there isn't a huge "deficiency" judgment the lender would have a hard time coming after your house. When you borrow $400k on a $1mm house to buy a boat, the *entire* $1mm asset is at risk. Nobody has figured out how to repo just part of your house. Two years later when the $400k boat is down to $250k and the $1mm house is up to $1.2mm, the lender probably won't even have the decency to say "Thank you very much!" as you sign the deed.. |
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A home equity loan - or home equity line of credit- is a 2nd mortgage
where your home is your collateral just as a 1st mortgage. You can spend $10K on Pop Tarts and it's tax deductible. I don't see where "lying" comes into play. You get a 1098 for mortgage interest and no one asks, or cares, what you spent it on. Your point about leveraging your home for a "toy" is valid, but what if we are talking about only $20-40K for a boat? You pick up the tax savings and still have a title in your hand. If you couldn't qualify for a conventional loan you shouldn't risk your home. It's not a last resort - it's a tax advantage. Remember that this is about home equity. You could do the same with refinancing and taking out cash for other uses is never in question. Dan wrote: Dan Krueger May 31, 8:06 pm show options Newsgroups: rec.boats From: Dan Krueger - Find messages by this author Date: Wed, 01 Jun 2005 00:06:33 GMT Local: Tues,May 31 2005 8:06 pm Subject: Boat Financing Reply | Reply to Author | Forward | Print | Individual Message | Show original | Report Abuse Peter, Got a home with enough equity for the boat? If you do that's a great, tax deductible source of money. ********** Tilt. If the money is used to buy a boat, the interest will not usually be deductible on a h.e. loan. The money needs to be used for education, home improvements, or other items on a short list of approved expenditures. Nothing stops a lot of people from lying, of course- but they are liable for back taxes, penalties, and interest when and if caught. However, if you take out an actual boat loan the interest on that *may* be deductible as a "second home" if the boat meets certain minimal requirements for accommodations and you are not already writing off the interest on a vacation cabin, motorhome, or etc under the "second home" provision. I would say, never, ever, ever, put your home at risk to pay for a toy. Take out a loan using the car, boat, airplane, camp trailer, whatever as collateral. If things go unexpectedly to hell, you may be able to stiff the bank for the payment on the boat or vehicle. It will ruin your credit, but if there isn't a huge "deficiency" judgment the lender would have a hard time coming after your house. When you borrow $400k on a $1mm house to buy a boat, the *entire* $1mm asset is at risk. Nobody has figured out how to repo just part of your house. Two years later when the $400k boat is down to $250k and the $1mm house is up to $1.2mm, the lender probably won't even have the decency to say "Thank you very much!" as you sign the deed.. |
I understand you can only take out up to the amount you paid for the house
as tax deductible amount. Besides, is foolish to jepardize your home for toys. If you can not afford to pay a separate loan, buy something cheaper. You will lose the tax deductibility if not a live aboard type boat, but how much are you going to save taxwise on a $30k loan anyway? "Dan Krueger" wrote in message k.net... A home equity loan - or home equity line of credit- is a 2nd mortgage where your home is your collateral just as a 1st mortgage. You can spend $10K on Pop Tarts and it's tax deductible. I don't see where "lying" comes into play. You get a 1098 for mortgage interest and no one asks, or cares, what you spent it on. Your point about leveraging your home for a "toy" is valid, but what if we are talking about only $20-40K for a boat? You pick up the tax savings and still have a title in your hand. If you couldn't qualify for a conventional loan you shouldn't risk your home. It's not a last resort - it's a tax advantage. Remember that this is about home equity. You could do the same with refinancing and taking out cash for other uses is never in question. Dan wrote: Dan Krueger May 31, 8:06 pm show options Newsgroups: rec.boats From: Dan Krueger - Find messages by this author Date: Wed, 01 Jun 2005 00:06:33 GMT Local: Tues,May 31 2005 8:06 pm Subject: Boat Financing Reply | Reply to Author | Forward | Print | Individual Message | Show original | Report Abuse Peter, Got a home with enough equity for the boat? If you do that's a great, tax deductible source of money. ********** Tilt. If the money is used to buy a boat, the interest will not usually be deductible on a h.e. loan. The money needs to be used for education, home improvements, or other items on a short list of approved expenditures. Nothing stops a lot of people from lying, of course- but they are liable for back taxes, penalties, and interest when and if caught. However, if you take out an actual boat loan the interest on that *may* be deductible as a "second home" if the boat meets certain minimal requirements for accommodations and you are not already writing off the interest on a vacation cabin, motorhome, or etc under the "second home" provision. I would say, never, ever, ever, put your home at risk to pay for a toy. Take out a loan using the car, boat, airplane, camp trailer, whatever as collateral. If things go unexpectedly to hell, you may be able to stiff the bank for the payment on the boat or vehicle. It will ruin your credit, but if there isn't a huge "deficiency" judgment the lender would have a hard time coming after your house. When you borrow $400k on a $1mm house to buy a boat, the *entire* $1mm asset is at risk. Nobody has figured out how to repo just part of your house. Two years later when the $400k boat is down to $250k and the $1mm house is up to $1.2mm, the lender probably won't even have the decency to say "Thank you very much!" as you sign the deed.. |
http://www.irs.gov/publications/p936/ar02.html#d0e1821
See Part II: Limits on Home Mortgage Interest Deductions |
There are points and fees associated with a lot of the home equity
loans, additionally reducing the actual savings realized by deducting interest on a small balance. |
For a home equity loan (or line of credit) you are borrowing against the
"equity" in your home. They will do an appraisal. The price you paid has nothing to do with it. That's why they use the word "equity". It's the difference between the market value and your mortgage balance. How are you jeopardizing your home if you can afford to make the payments? This is no different than any other loan. If you can't pay for a boat loan from XYZ bank, you will lose your boat but your house can't be too far behind that. It's not about affordability, it's about tax savings. You can always pay off your home equity loan with a conventional loan but that wouldn't make any sense. The bottom line is that if you can't make the payments, you shouldn't be boat shopping anyway. The live aboard type boat you refer to only matters if it is a separate loan and you are declaring your boat as a second home. With a home equity loan, you can buy a canoe, a corvette, and a bag of peanuts if you qualify. You get a checkbook - literally. Tax savings can be huge. It could even drop you down into the next, lower, bracket. Over the term, you are saving thousands of dollars. I'm not in the biz of selling any type of loan so I am only speaking from personal experience. Dan Bill McKee wrote: I understand you can only take out up to the amount you paid for the house as tax deductible amount. Besides, is foolish to jepardize your home for toys. If you can not afford to pay a separate loan, buy something cheaper. You will lose the tax deductibility if not a live aboard type boat, but how much are you going to save taxwise on a $30k loan anyway? "Dan Krueger" wrote in message k.net... A home equity loan - or home equity line of credit- is a 2nd mortgage where your home is your collateral just as a 1st mortgage. You can spend $10K on Pop Tarts and it's tax deductible. I don't see where "lying" comes into play. You get a 1098 for mortgage interest and no one asks, or cares, what you spent it on. Your point about leveraging your home for a "toy" is valid, but what if we are talking about only $20-40K for a boat? You pick up the tax savings and still have a title in your hand. If you couldn't qualify for a conventional loan you shouldn't risk your home. It's not a last resort - it's a tax advantage. Remember that this is about home equity. You could do the same with refinancing and taking out cash for other uses is never in question. Dan wrote: Dan Krueger May 31, 8:06 pm show options Newsgroups: rec.boats From: Dan Krueger - Find messages by this author Date: Wed, 01 Jun 2005 00:06:33 GMT Local: Tues,May 31 2005 8:06 pm Subject: Boat Financing Reply | Reply to Author | Forward | Print | Individual Message | Show original | Report Abuse Peter, Got a home with enough equity for the boat? If you do that's a great, tax deductible source of money. ********** Tilt. If the money is used to buy a boat, the interest will not usually be deductible on a h.e. loan. The money needs to be used for education, home improvements, or other items on a short list of approved expenditures. Nothing stops a lot of people from lying, of course- but they are liable for back taxes, penalties, and interest when and if caught. However, if you take out an actual boat loan the interest on that *may* be deductible as a "second home" if the boat meets certain minimal requirements for accommodations and you are not already writing off the interest on a vacation cabin, motorhome, or etc under the "second home" provision. I would say, never, ever, ever, put your home at risk to pay for a toy. Take out a loan using the car, boat, airplane, camp trailer, whatever as collateral. If things go unexpectedly to hell, you may be able to stiff the bank for the payment on the boat or vehicle. It will ruin your credit, but if there isn't a huge "deficiency" judgment the lender would have a hard time coming after your house. When you borrow $400k on a $1mm house to buy a boat, the *entire* $1mm asset is at risk. Nobody has figured out how to repo just part of your house. Two years later when the $400k boat is down to $250k and the $1mm house is up to $1.2mm, the lender probably won't even have the decency to say "Thank you very much!" as you sign the deed.. |
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"Peter Aitken" wrote in message m... Other that what the dealer offers and BoatUS, are there any other places to look for new boat financing? -- Peter Aitken Most brokers can offer competitve rates, even on used boats. The dealer can shop banks, one of the benefits that you get from the seller's commision. Essentially the same as you going to your bank or credit union for the loan. John Cairns |
"Dan Krueger" wrote in message ink.net... For a home equity loan (or line of credit) you are borrowing against the "equity" in your home. They will do an appraisal. The price you paid has nothing to do with it. That's why they use the word "equity". It's the difference between the market value and your mortgage balance. How are you jeopardizing your home if you can afford to make the payments? This is no different than any other loan. If you can't pay for a boat loan from XYZ bank, you will lose your boat but your house can't be too far behind that. It's not about affordability, it's about tax savings. You can always pay off your home equity loan with a conventional loan but that wouldn't make any sense. The bottom line is that if you can't make the payments, you shouldn't be boat shopping anyway. The live aboard type boat you refer to only matters if it is a separate loan and you are declaring your boat as a second home. With a home equity loan, you can buy a canoe, a corvette, and a bag of peanuts if you qualify. You get a checkbook - literally. Tax savings can be huge. It could even drop you down into the next, lower, bracket. Over the term, you are saving thousands of dollars. I'm not in the biz of selling any type of loan so I am only speaking from personal experience. Dan Bill McKee wrote: I understand you can only take out up to the amount you paid for the house as tax deductible amount. Besides, is foolish to jepardize your home for toys. If you can not afford to pay a separate loan, buy something cheaper. You will lose the tax deductibility if not a live aboard type boat, but how much are you going to save taxwise on a $30k loan anyway? "Dan Krueger" wrote in message k.net... A home equity loan - or home equity line of credit- is a 2nd mortgage where your home is your collateral just as a 1st mortgage. You can spend $10K on Pop Tarts and it's tax deductible. I don't see where "lying" comes into play. You get a 1098 for mortgage interest and no one asks, or cares, what you spent it on. Your point about leveraging your home for a "toy" is valid, but what if we are talking about only $20-40K for a boat? You pick up the tax savings and still have a title in your hand. If you couldn't qualify for a conventional loan you shouldn't risk your home. It's not a last resort - it's a tax advantage. Remember that this is about home equity. You could do the same with refinancing and taking out cash for other uses is never in question. Dan wrote: Dan Krueger May 31, 8:06 pm show options Newsgroups: rec.boats From: Dan Krueger - Find messages by this author Date: Wed, 01 Jun 2005 00:06:33 GMT Local: Tues,May 31 2005 8:06 pm Subject: Boat Financing Reply | Reply to Author | Forward | Print | Individual Message | Show original | Report Abuse Peter, Got a home with enough equity for the boat? If you do that's a great, tax deductible source of money. ********** Tilt. If the money is used to buy a boat, the interest will not usually be deductible on a h.e. loan. The money needs to be used for education, home improvements, or other items on a short list of approved expenditures. Nothing stops a lot of people from lying, of course- but they are liable for back taxes, penalties, and interest when and if caught. However, if you take out an actual boat loan the interest on that *may* be deductible as a "second home" if the boat meets certain minimal requirements for accommodations and you are not already writing off the interest on a vacation cabin, motorhome, or etc under the "second home" provision. I would say, never, ever, ever, put your home at risk to pay for a toy. Take out a loan using the car, boat, airplane, camp trailer, whatever as collateral. If things go unexpectedly to hell, you may be able to stiff the bank for the payment on the boat or vehicle. It will ruin your credit, but if there isn't a huge "deficiency" judgment the lender would have a hard time coming after your house. When you borrow $400k on a $1mm house to buy a boat, the *entire* $1mm asset is at risk. Nobody has figured out how to repo just part of your house. Two years later when the $400k boat is down to $250k and the $1mm house is up to $1.2mm, the lender probably won't even have the decency to say "Thank you very much!" as you sign the deed.. But I understand the IRS rules say only hte money up to the purchase price of the house is legally deductible. |
"Dan Krueger" wrote in message
ink.net... For a home equity loan (or line of credit) you are borrowing against the "equity" in your home. They will do an appraisal. The price you paid has nothing to do with it. That's why they use the word "equity". It's the difference between the market value and your mortgage balance. How are you jeopardizing your home if you can afford to make the payments? This is no different than any other loan. If you can't pay for a boat loan from XYZ bank, you will lose your boat but your house can't be too far behind that. It's not about affordability, it's about tax savings. You can always pay off your home equity loan with a conventional loan but that wouldn't make any sense. The bottom line is that if you can't make the payments, you shouldn't be boat shopping anyway. The live aboard type boat you refer to only matters if it is a separate loan and you are declaring your boat as a second home. With a home equity loan, you can buy a canoe, a corvette, and a bag of peanuts if you qualify. You get a checkbook - literally. Tax savings can be huge. It could even drop you down into the next, lower, bracket. Over the term, you are saving thousands of dollars. I'm not in the biz of selling any type of loan so I am only speaking from personal experience. Of course you should not buy a boat unless you can afford the payments. The point though is that unexpected things can and do happen - layoff, serious illness, etc. If your boat is on a home equity loan then your house is at risk. If it's on a separate loan then the house is not at risk. If the boat qualifies as a 2nd home, tax savings can indeed be large. For example, on a $100,000 loan at 6% the first year tax savings will be about $2100 for someone in the 35% bracket (combined federal and state). -- Peter Aitken |
Bill McKee wrote:
But I understand the IRS rules say only hte money up to the purchase price of the house is legally deductible. It's a home EQUITY loan. Not much different than a refinance based on the CURRENT value of the home where cash is taken at the closing. Where did you read that? |
http://www.irs.gov/publications/p936/ar02.html#d0e2069
Explains debt limits for interest. "Dan Krueger" wrote in message .net... Bill McKee wrote: But I understand the IRS rules say only hte money up to the purchase price of the house is legally deductible. It's a home EQUITY loan. Not much different than a refinance based on the CURRENT value of the home where cash is taken at the closing. Where did you read that? |
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