boat finance

[1stmate]

We're about to take the plunge and looking at finance for our boat. Is it really necessary to use a marine finance company? Given that their APR seem higher than loans available through other finance companies, does a marine finance company give any advantages which are not immediately obvious?

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[qsiv]

The loan is likely to be secured against the boat (if on full register, not SSR), not other assets (house?), which gives a measure of comfort.

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[StugeronSteve]

The loan can still be secured against the boat if unregistered, provided the loan does not exceed a certain threshold (fairly high if I remember correctly).

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[DeeGee]

Unless it gives you a problem, your best bet financially is to take out or extend your house mortgage. The rates are so much better. Your boat would then be unencumbered. House mortgages are a loan secured by your house, and unless you hit a stupid clerk, you will have little difficulty. The same applies to buying a car.

It would be sensible to plan the payback period to be a lot shorter than your house mortgage, ie. keep the house and boat bits separate in your own mind.

I took out the latest mortgage on the house, to buy a boat, when the original mortgage had been paid off. There was no question that the loan was for house extension or any such flannel, it was for a boat, up front.

<hr width=100% size=1>Black Sugar - the sweetest of all

 

[cgull]

The RYA publication Buying a secondhaand yacht itells you all..

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[1stmate]

Thanks for all the advice - and with the money we'll save on finance perhaps we can afford some new kit ! Happy sailing.

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[trevor_loveday]

Deegee - not a bad idea but I feel the need to caution that interest rates are about to head up again... The Bank of England monetary policy committee only voted 5-4 to keep the base rate at 3.5% last month and it is almost inevitable that they will rise again next month. And I don't think they'll stop at 3.75% for long either...

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[Salty]

Trevor,

Yes, but the same interest rate moves would also impact marine mortgages. An upwards move in base-rates (likely, as you say) would hit all forms of borrowing. The most defensive move would be to lock into a fixed-rate house mortgage and use excess money to buy the boat.

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[steve_cronin]

I am putting together an article on boat finance for a mag. at the moment. There are re-mortgage products on the market offering (say) stepped discounts of 3%, 2% 1% 0.5% 0.5% starting at 2.44% with no extended tie -in and NO upfront charges, even free legals. Max LTV of 95% (80% for SE) if capital raising.

PM me and I'll give you further details.

I am an IFA and independent mortgage broker but this is NOT a solicitation for services.

Steve Cronin

<hr width=100% size=1>The above is, like any other post here, only a personal opinion

 

[Sybarite]

In France when you purchase a boat on a finance lease, the VAT on the lease payments is 50% of the normal rate for a category A boat, the reasoning being that a Category A boat is deemed to spend 50% of its time outside of territorial waters.

Does the same apply in the UK? If not, why not lease through France? (Vat therefore = 9.8% compared with 17.5%).

John.

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[DeeGee]

Too true, but of course your caveat applies to borrowing money anywhere. I was simply pointing him in the right direction to minimise his repayments and keep the boat unencumbered. It makes it easier to sell when the time comes if you don't have a boat mortgage. Quite apart from boat mortgages being more expensive than house


<hr width=100% size=1>Black Sugar - the sweetest of all

 

[apollo]

The only other problem with borrowing on the house is that there is no requirement to check title as there is with a marine mortgage (due to fact that Marine Finance co will take title on the boat until its paid for.)

Therefore you COULD end up buying a boat that the previous owner does not own.

At least with a Marine Mortgage you have some protection in this area.

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[EME]

Boat finance

Theory is fine. However when I have seriously looked at the options you may find, as I did, that the total cost of the package is even more expensive than financing through one of the Uk finance houses --- and thsi was regardless of what capital you put in. Before you ask , yes, I did discount the cash flow payment stream as well.

Yet to find anyone who on basic finacial grounds make the French leasing scheme 'save money'. Love to be proved wrong.

<hr width=100% size=1><font color=blue>I am WHAT I say I am</font color=blue>

 

[Gordonmc]

Beware one potential trip-up which I fell foul of.
I used a marine finance company (BOS under a different name). The sum was to cover boat purchase plus some necessary work identified in the survey. When it came to pay-out time the company refused to issue the finance to me personally and insisted it went to the vendor.
They came up with nonsense about needing to ensure the dosh was going to buy a boat so their personal loan section would'nt go in the huff.
In practice it meant I had a three month battle with the broker to get MY cash off them to pay the shipyard.
That didn't make me flavour of the month locally.

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[DeeGee]

Wow, now that's a real reason not to save money!!

Just register the boat part 1. establishes title. costs far less than the money saved.

;-)


<hr width=100% size=1>Black Sugar - the sweetest of all