Speedracer29

Like the title says- home equity loan for a boat?

Hypothetical situation-
-Home that's paid off.
-The "unicorn" of boats- custom manufacturer, highly regarded. Used boat, but built with EVERY option you'd put in if you did it yourself, in mint condition.
-No NADA values, not enough comps for a traditional boat loan at the local CU.

Do you let it slip by and wait (potentially years) for the next one, or do you pull equity?

Jonesyfxr

iTrader: (1)

I know a guy locally who took out a home equity loan for a DCB and he doesn't regret it one moment.

Speedracer29

These are the types of responses that make a guy jump on his Harley (also paid off) and drive down to the bank.... LOL!

Rattlesnake Jake

iTrader: (2)

I did it years ago only because the rates were lower.

Wildman_grafix

Is a home equity loan tax deductible?

3pointstar

THIS IS MY OPINION and nothing more

I would NEVER take out any type of home equity loan for a toy. Yes if we admit it or not - our boats are toys - very nice toys - but none the less a toy. A home equity loan puts a home in jeopardy if you should (Lord forbid) default on this loan -- Why would you want to take the risk and potentially loose your home?

I know I'm old school - but this has served us well -- We save "x" number of dollars for the toys in our lives and then pay cash. Yes, deals may come and go - and a deal of the century may pass you by - but at the end of the day when you put your head on your pillow - you don't have a worry about making the next payment.

As a side bar - If you have every read/heard anything from a guy by the name of Dave Ramsey- his philosophy is to be debt free - and you will have freedom like no other-- We did this long before we learned of Dave and it is true. The new status symbol is the "paid off mortgage" and not the BMW (or in my case Mercedes).

I don't every want to imply that what is right for me should be the same for you - that would be just stupid-

I really wish you all the best

3pointstar

thirdchildhood

iTrader: (6)

Absolutely! You'll get a lower rate, interest will be a tax deduction and you will have the option of carrying only liability insurance should you decide to do so. Later in life you will want to follow the advice in the above post which is where I am at 61 years old. Two houses free and clear. Four cars and a truck paid for, the boat paid off and no credit card debt. It is a good feeling. If you are deciding between financing a boat with a boat loan or home equity, the latter makes a lot more sense!

sy goldberg

Find out if you can get a home equity loan or home equity line of credit that equals your mortgage balance and use that money to pay off your mortgage,you will pay off your house much faster and save thousands..

Speedracer29

3pointstar,
I'm mostly in agreement with you. I've never considered a home equity loan, especially for a toy, until now.
I have financed toys (one at a time) but generally had a 50-75% "cushion" held back for the loan repayment, in addition to liquid assets tucked away to cover a couple months of bills, a medical emergency, loss of employment, etc.
If someone had asked me 3-5 years ago, I wouldn't have batted an eye before telling them "no way". It's not that this is the "deal of the century" as it is the rarity, condition, and option list. Shy of a winning Fantasy 5 ticket, I'm not going to be able to afford a new build like this, which is why I'm teetering.

I'm rationalizing (big time) here, but I could potentially lose the house to flood, fire, divorce, eminent domain claim, or ISIS attack. On an actuarial table, some of those possibilities are higher on the list than "default". Besides, I can sleep on the boat, I can't crush waves in the house....

This is mostly a timing thing, sort of a "bridge loan" until I sell off a couple assets and pay off the new loan, but I still don't know if I'm going to do it.

Speedracer29

Sy, I'm mortgage free.... Just don't know if I want to take one on, it is a good feeling. On the other hand, so is all the joy I'd get from this boat.