buying a boat
 

So I've got a bud who wants to get in the game around 50-60k but only has 25 in hand that he's willing to part with.
He asked me about who to finance with and I said lower your budget and pay cash or dig deeper into your purse, LOL.
Well I guess that isn't an option as he knows he'll get much more boat or a newer year model by stepping up to more coin.
Then I was like take a home equity loan against the house to purchase with cash in hand and you'll hold clear title instantly and enjoy more negotiating power since there's no waiting on closing.
I'm curious as to y'alls input for some quality advice on boat financing even though I say pay cash now and get the hurt over with.
As always thanks for your input, you guys and girls are always the best source of quality info.

Thanks,
Kelly

What kind of boat are you looking at?

Most banks are not going to want to do a small loan on a boat.

I agree he needs to dig deeper or start smaller.

Look at older clean boats. That's what I did and I am happy. No payment, and my 32' fountain is going to depreciate much slower then something newer. There is always going to be something newer, faster, nicer, etc. That's my .02.

Credit unions are a good outlet for boat loans. HELOCs can be a good idea too, if you have equity! LOL

Tell him to go to the banks and find out what they'll lend. Then he can look for something knowing what kind of cash he can put down and what the bank will back you on. My bank did a un secure loan on a older boat and I still held the title free and clear. It's always a pain to spend months finding a boat the spending just as much looking for a bank. I always went to my bank first.

After tax home equity rates are 2-3%. I'd pay the 25 down, borrow 25 and get in the boat he wants. As a friend of mine always says - life's not a dress rehearsal

Late model with a loan amount that equals a 20% book value of 25k or less. Get berried in payments...it's the American way. Buying a high performance boat is always the cheap part....keeping it going is another story. :)

Banks are going to want to see 10-20% down and less than 10 years old or so for a powerboat. That being said with 25k down your buddy should be able to buy a nice ride. Put the cash down and get something he will be happy with for a year or two.

Finance a house, finance an essential vehicle, pay cash for toys. That said, you cant beat credit union rates

That's great

Well I'd say that cover's the boat then :evilb:

WAY to many financial variables to give advice.

Have a good job? Will that job still be there 3 yrs. from now.

Own a home? How much equity? As stated, HELOC rates are way lower than boat loans without the hassles.

Other investments? I could see not wanting to come off an investment if you can get a 3% loan elsewhere.

How much do you put in your 401K?

How much other debt do you have?

I HATE having any debt, but depending on the situation it's not all bad.

Key bank just pre approved me for 85k on a 2000 go fast. No money down 20 yrs if I want 5.49 rate.

What is book value? Have you done business with them in the past? A bunch of different factors when making boat loans.

You're fun at parties.

I was also approved through Key, 80% NADA + options + trailer, 0 down, up to 20 years, but we are in the low 4% range (rates have gone up since I was shopping this summer)

I was a first time customer, but from what it sounded like if you had a strong credit history and proper income it was no problem. They made no distinctions on "performance" boats, and did not require a survey.

That is a good sign for our sport if the banks start playing ball again.

If your not going to do a home equity which is the best way with interest on your taxes. Then the credit union is the only way to go. Local bank around me where I have my personal and business accounts wanted close to 9%. I went to the credit union and I am under 3% with no money down. Go to the credit union get pre-approved for a dollar amount, then go find your boat. You will have to get it surveyed (inspection and value declaration). I can't remember the proper term. But the approved surveyor not some random boat guy will value the boat and that is what the credit union will use for value. They do not use NADA or KBB. The surveyor will set the value on the entire package boat and trailer. Getting the loan was the simplest part. Dealing with boats that did not pass compression/leakdown, hull survey was the most difficult and frustrating part.Tell him to go big and have fun.

This is not true with all banks. We just sold our Velocity and ended up with a decent amount of cash after payoff. We decided to take care of some higher interest things like a credit card and some other things. That basically left us with zero down (at the time of purchase. We didn't really plan on buying right away. We had planned on gathering a down payment first but the right deal presented itself). Anyway KeyBank gave us a zero down loan for a 2001 boat. It was pretty much no hassle loan. I do know We probably didn't get the best rate thru KeyBank because of the zero down (we have an 820 credit score).... Essex is offering a better rate with 15% down... So it all depends on what you want to do. But long story short, you can finance boats older than 10 years and you can do as little as zero down....

Yes rates have gone up.... We just closed with Key a few weeks ago and with an excellent credit score we ended up at 5.99%.... Essex is offering rates in the 3.5%-4.0%. Rates vary on amount borrowed. I believe but they require a decent down payment. With Key we actually financed well over NADA. Because the boat is an 01 but motors are 06. They seem to be one of very few banks that realize NADA is a guide line and not the bible when it comes to boat financing.... We did not have to get a survey either. I even got agreed value insurance on the boat through Foremost without a survey. The agreed value came in at just under $5k less than what we paid. If I get the survey done, I can get that extra $5k covered...

Damn key isn't in florida.

They might still finance out of state...... Not sure.

Actually they are, ask my banker last week. The have 1 branch, not sure where but it gets them in the state.

I was a first time borrower with Key, just opened a checking account with them so they can electronically withdraw payments. If there rate gets lower I can refi for about 125 which will be worth it if it drops back into the 4% range which it usually does durning spring.

Credit unions are are great if you borrow less. I called my local credit union and they had great rates but only on lower borrowing amounts. The more I borrowed the higher the rate.

That's the exact opposite with Key.... I borrowed $35k so we were on the low side. I think th rates are the same from $25k-$49k. At $50k the rate goes down a bit..

My first boat was a 88 240 sport in which my credit union approved 100% of average retail plus taxes, tags, and trailer. Average retail based on NADA values. They would have lent $14,000 on that boat and trailer combo if i needed it. When I bought my 2nd boat 92 24ft outlaw, they would have went to $22,000 for boat and trailer. So banks/credit will lend on boats, even older ones

Key doesn't loan in Texas. Kelly tell your buddy to just go to a local credit union and talk to a loan officer and they will give him the do's and don'ts before hand so he knows. What side of town is he on?? I will tell you that most in the Houston area won't go longer than 6-7 years. I also have used penfed and msufcu. If he has access usaa is a good option. A credit union will be his best bet IMHO. I just went through this last year...

I bought my outlaw in 2011 and my credit union loaned me 100% of money. It was only a 36 month note though.

Key banks website doesn't list florida.

https://www.key.com/personal/vehicle...boat-loans.jsp

Never finance toys!

I will always finance toys.

We all thank you for that life lesson.

And a lot of us disagree with it!!!!!!

I never finance anything cars,boats,homes,etc. oh wait i did finance a stripper one time (CREDIT CARD) after club charges,stripper fees,drinks etc. it was over 3grand and that was just me and one stripper...I think? Happy financing and stay warm.

My credit union wouldnt finance a boat older than 15 years. They didnt care if I wanted to borrow 5 dollars or if the boat was worth 100k.

Im not sure what kind of "toys":gfight: you're talking about but we are talking boats, hot rods, four wheelers, and that kind of stuff.

The right analogy is to not over finance anything.
I have financing on my house, car & boat. That said, the amount of financing is far less than even a fire sale price for each. So, if I ever get into financial trouble I can sell off and walk away clear (and with some cash in my pocket).

If everyone was fortunate enough to pay cash for everything, I'm pretty sure we would all be racing to the gas docks somewhere in the keys every morning!

Amen.

That's good advice. However if I don't finance my toy I will never have my toy.