Rates with new boats

What are the going rates right now for boats on 15 year loans with good credit? I'm trying to figure my budget and wonder how much I can buy. Wife is worried about the payment and not the price!

Todd,
I financed my last boat through boatsbank (keybank) and I just got an email from them offering me another loan at 5.9% with no fees.

(Message edited by bstroop on December 22, 2005)

That's pretty good - is that 5.9% only on a new boat and what term?

5.9% is very good. I had a beacon score of 752 and got around 7%, 15 years on an 04 (used) thru keybank, about 4 months ago.

Yeah 5.0 is awesome but I think I am about 7 thru my credit union and I have very good credit. I think if I did it again I would go thru a place that specialized in boats, may have gotten a better deal

USSA Federal Savings Bank

did 5.25% up to 180 months (this was back in July though?? )

(Message edited by andreas on December 22, 2005)

David,
It's for boats up to 5 years old and all the way to 180 months. The rate was the same from 120-180 months. Boats older than five years had a slightly higher rate and were limited to a shorter term. FYI I applied for the loan through boatsbank (I believe they kinda work like lending tree where they search for a lender with the best rate) and ended up financing through keybank. From what I've seen keybank is usually the best thing going, other than cash of course........

andreas,
From what I saw of your toy store I find it hard to believe you've had to search for a loan. Just kiddin, congrats on those beautiful toys.


B

(Message edited by bstroop on December 22, 2005)

(Message edited by bstroop on December 22, 2005)

Depending on your home/tax situation you may want to consider a home equity loan/line. After tax cost may be lower after you deduct the interest expense.

David,

You are right on with that comment. Makes alot more sence to do it that way if possible?? If anyone needs help with a refi in Ca. I would be more than willing to give you a few #'s or ideas. That is what I do for a living.

thanks

and thanks to David for the comment.

andreas

In the Midwest, let me know. That is what I do too.

Brian - with no closing costs - not bad at all. Damn, I bought 3 years ago new and have a rate of 7.9% !

Thought about doing a home equity line also since I have plenty of equity in both my homes...should of probably done it a while ago (now that I've paid all the hefty interest on the boat loan).

I guess the reason I haven't is because the floating interest rates worry me. My bank is offering prime -1% for life right now on home eq's.

Prime -1% is great !!!

We are 150 basis points below prime right now on Equity loans of 80% LTV or less.

Curently at 7, but about to pay it off on a home refi and the interest is a tax deduct.

1.5% below prime is even better.

The economy is suppossed to be doing well, by most accounts, through 2006 which means rates should continue to climb. Anybody dare to play forecaster here?

Consider the total cost before consolidating it into your home laon. I did 2 examples that are could be somewhat relevent to this situation.

1. Pay off 30k at 7.9% in 10 years. This is supposed to represent paying off your boat. From this point on you will make monthly payments of $362.46 and the total amount that you will pay for the boat will be $43,495.20.

2. Refinance your boat into your home loan. Finance everything on a 30 yr term. Int rate of 5.9%. The amount of your payment that would got to the 30k you owe on your boat would be $178.01 but the total amount you will pay to payoff the boat is $64,083.60.

This is the reason that I would advise against using a home equity loan to finance your boat. It can be convienent but even though you are getting a better rate you are paying much more.(in my example over 20k)

just pay cash...that is the only way to do it...otherwise you buy the boat like twice on a 15 year loan.

Elle, what you said is true, but think of it like this.....6-7% is fairly cheap money to borrow. avg person owns ther boat for only 5 years not 15. while the majority of the payment is going to interest I bet after the 5 year period the guy who paid cash isn't in a much better financial position than the guy who financed....not to mention he didn't drop 50k on a depreciating asset. Everyone has there own financial strategy on buying toys. If it weren't for good credit and leveraging myself appropriately I would not have half the "stuff" I have today.

on a 7% loan @ 50k you'll pay approx 30k in payments 14k in interest after 5 years. inital cost=$0. your payoff is now 34k. If you pay cash (50k) seller saves 14k over 5 years. A little under 3k a year is a minimal cost compared to having to come up with 50k IMO (for most people). Assuming depreciation (tons of variables) the boat is worth 35k in 5 years.

question is can you make more than 7% with your money...I say yes.

Not to mention if your interest was tax deductible (home equity) would make it even more inticing to finance.

(Message edited by acurtis_ttu on December 22, 2005)

(Message edited by acurtis_ttu on December 22, 2005)

(Message edited by acurtis_ttu on December 22, 2005)

Cash is good when interest rates are high and investments opportunities are dumping. But then you have to ask yourself can I make 6-7% in stocks/real estate or lock in that return by paying cash. Not hard to do in the last few years.

I agree with not "consolidating" into a home loan. I would never put depreciating assets (cars, boats, etc.) into a home first mortgage but like the flexibility of equity loans/lines.

Remember that prime is still moving up... .50% to .75% over the next year. With no reason to believe it will go lower in the near future. Once you put the boat on a heloc and you want to sell the home it would be harder to put a lien on an older boat in order to free up the cash to put into another home or investment property. This is what kept me from doing a heloc to finance my boat. In 2002 I would have had a rate of 4.75% tax deductable now it would be 7.0%+ and moving higher. Worse, even with the tax deduction than the 5.50% with my credit union.

I owe 20k on a boat that is worth 45K+. If I pay off the 20k with my refi, I'm paying a full point less of interest, and the interest is tax deductable, and when it's all said and done I'm saving over a 1k a month in payments.

J-Rod, But how long are you amortizing your loan for. You might be saving money monthly but if it is amortized over a longer period you will pay more in the end

Assuming you continue to pay the same amount you are paying now (home & boat) on the refi you will make out better. This also assumes that you are allowed to prepay the refi without penalty and nominal loan fees. Plus the interest now becomes tax deductible.

However, never do this if you are on shaky financial ground. You wouldn't want to risk losing your home if things got bad.

geez you guys have cheap finance. We pay 10%+ on a boat. The max rate we have had was 24%......not many boats are sold then.