financial advice

[Guest]

I'm going to Southampton determined to buy a boat this time, 25-30ft. Not being remotely wealthy I'll need to sell a kidney/the wife/my first-born etc. to raise the money (£25K top whack) but I'm quite keen to avoid a complete shafting, financially speaking.

I wondered if anyone had any hard-earned advice about financial holes on the road to ownership. And is there any such thing as an independent marine financial adviser?

 

[AndrewB]

RYA advice

There are quite a few wrinkles in buying a yacht, specially second-hand. A good broker will give you advice, though of course he is essentially acting for the seller. I found the RYA's booklets, either G10 'Buying a new yacht' or G21 'Buying a second-hand yacht', each about £5, extremely helpful. They outline the procedure and provide a lot of tips to safeguard yourself. Try http://www.rya.org.uk and click on 'Shop'.

 

[robp]

As has been said on here before, it's getting harder to buy a new boat that will not depreciate. Whereas earlier marques will almost certainly hold their value. So you can be assured of getting the capital outlay back. This though , has to be weighed off against possible re-fit/maintenence costs. It's the right time of the year soon, to be looking for that lovingly maintained Westerly and you have time to look for it. If you are determined to buy new, then do a survey here on what's best for 25K. Be careful of "essential extras".

Also don't be afraid to turn to any person at the show who might be near the boat you're looking at and ask their opinion.
There's a wealth of expertise and experience around and most are happy to share it.

I don't think there is any such thing as an actual "Independant Financial Advisor" in any field. (IMHO).

Happy hunting.

 

[JeremyF]

The RYA booklets are a great start.

Do you mean financial advice, or financial pitfalls? Financial advice - Watch out for 'Marine Mortgages'. They are no such thing. They are an expensive unsecured loan. Tesco sells these cheaper, but its best to extend the house mortgage, if you are happy with the risk.
Pitfalls - make a realistic budget and stick to it. Its so easy to be tempted to buy new toys. Work out your mooring and maintenance costs, and then give yourself a contingency for unplanned maintenance costs, and if unused, use it for toys

Jeremy Flynn

 

[steve_cronin]

Marine IFA

well there aren't many of us who would survive on marine business alone due to the fact that sailors are by nature tight and would resent paying our fees!

However, here's a freebee!

Yes the CHEAPEST way to finance a new boat is by taking out a further advance on your home so long as there is sufficient spare equity to still keep the Loan:Value ratio down to <75%. To offset the costs a complete re-mortgage might also be an idea. Current Base lending rate is around 5.74 to 5.95% and some lenders offer "Stepped Discounts" giving 3% off for the first year, then 2% for the next and so on down to nil discount after five years, free re-mortgage legal costs, free survey/valuation fees and daily interest. This can bring the initial costs of (say) a £35,000 mortgage over 17 years down from £227 to £162 per month and when you add on the new boat loan it comes out at £279.These will of course vary as rates vary but there are some fixed rates available too if that is your preference. You must of course remember that you are putting your home at risk if you can't keep up payments on the new toy!

As has already been said, the "Marine Mortgages" being offered by some finance companies on the peripheral stands at the boat shows, handing out tide tables and interco flag stickers, are Personal Loans by another name. However these often do not have fixed rates like simple Personal Loans from Tesco, Alliance& Leicester, M&S etc but have fixed PAYMENTS, the TERM being increased if rates increase and vice versa. With one of these a TEN year loan COULD run to thirteen or more if rates rise. With ALL Personal Loans there is an early settlement penalty which usually works out at three months interest being added to the debt at the time of settlement. With a proper mortgage, provided you aren't within any early redemption penalty period, no such charge is made. In fact with one deal we offer the lender actually allows 10% of the loan to be repaid without penalty during each year of the five year discount period, this being accumulative so you can pay off 20% in the second year if you want then another 30% in the fifth year. Of course after that the repayment restriction finishes so you can either re-mortgage again or if you have the funds, repay the balance again without penalty.

to sum up:-

Marine Mortgage - a myth unless we are talking about Lloyds register boats and comparatively low loan percentages - interest rates still about 7 -9% though. Boat re-possession possible on default.

So-called "Marine Mortgages" High (& variable) rates, repayment penalties and the possibility of extended terms. No re-possession risks since no charge can be registered against craft on the Small Ships Register - despite what companies hint at there simply isn't such a facility available on the SSR.

Personal Loans - expensive, fixed term and interest rates - repayment penalties. No re-possession risks but you could have defaults recorded against you at Experian or Equifax- the two National credit databases which will compromise your future creditworthiness. Ther is often a £15000 ceiling on these loans.

Further advance to house mortgage. Low rates -even better if accompanied by a re-mortgage. No early repayment penalties unless specified within terms of a special deal. risk to house if you cannot keep up payments. Lenders CAN be sympathetic in times of hardship but not obliged to be so.

Hope this helps. It's a bit of a nutshell guide as there is quite a lot more to consider.

Best method of all:- borrow from grandma or take it as an advance on your legacy!!

Steve Cronin

 

[sailbadthesinner]

Or you could always just charter
the repayments on 30 grand plus mooring fees all add up to a lot of weeks guaranteed sailing where you want
how many people take two weeks off in the uk only to have their plans dashed by weather.
as i used to say
if it F**ks Flies or Floats. Rent it.

...It was like that when i found it!

 

[david_e]

Re: Marine IFA

A little bit more than a nutshell Steve, very comprehensive!

I would only add that it is prudent to protect your payments for sickness and unemployment. If you are to do this then the remortgage route is probably the best, primarily because the premiums for protecting these loans are generally lower than those for personal loans. Haven't done a comprehensive check of late but when last comparing a car loan to a mortgage the difference was frightening. The Telegraph website is one good source of info for all of these products.

PS Nipper why are you green with a little yellow m flag?

<P ID="edit"><FONT SIZE=-1>Edited by david_e on 28/08/2002 16:34 (server time).</FONT></P>

 

[steve_cronin]

Re: Marine IFA

Well yes of course i would recommend ASU & life &CI cover but this wasn't a client recommendation!

We have Extranet 7 other on-line sourcing systems- we don't rely upon the press! Good god man! What a suggestion!!

Regards

Steve Cronin

 

[Jeremy_W]

Re: Marine IFA

Well, I'm not an IFA [nor was I a very good Direct Salesman either] but the Accident, Sickness & Unemployment policies are full of pitfalls. The accident/sickness cover is only medium-term and the redundancy cover may only last until the DSS has forced you back into the workforce in a NMW job, no matter how big the salary drop from your last employment. If you want real sickness cover look at Income Replacement (aka "Permanent Health Insurance" [sic]) rather than ASU.

All IMHO, FWIW, E&OE, BLT...

 

[Guest]

Re: Marine IFA

Very informative, you types, glad I came.
Sadly I'm too short to reach even the bottom rung of the property ladder, which is why I was looking at a boat - it has to be cheaper than rent. So from what you say, I'm in for a shafting by the Loan Ranger. What's the worst that could happen? Just how grim could this get, repossession and subsequent homelessness aside?

Nipper (The M is an honourary title afforded me by Mr Hollamby in recognition of services rendered to ybw)

 

[steve_cronin]

Re: Marine IFA

Not being a homeowner might also, I'm sad to tell you also be against you when it comes to embarking on that mystery routine "Credit Scoring". The worst would be however to be, Self employed for less that three years with diminishing profits, living with relatives AND no credit cards.

Try Lombard, Haven Knox Johnston or Barclays Marine Finance. These all offer Personal Loans either through themselves or associates or they offer the "Fixed Payment, Variable Rate so-called "Marine Mortgages I spoke of previously.