Financing a boat

[nickfabbri]

Another dumb question; when you buy a boat that is say worth 100k, how do most people buy them? Is it the norm to wait until you have the money in the bank or is it the norm to finance it? Or a bit of both? I have heard a great deal about boat mortgages but are these just a different name for loans with high interest rates? Can anyone shed advice.

Thanks

 

[andyorr]

Marine mortgages are running at about 8 or 9%. If you have equity in the house stick it on your current motgage, rates are lower. Alternatively downsize and release capital.
I want to do the "boat in the med thing" after selling my Moody 31. Got a taste for sunny sailing on a few charters recently. 100k should get a very nice boat! Some may consider chartering to offset costs. Lots of companies e.g. Sunsail do ownership/charter schemes but you still have to borrow or shell out a major wad of cash.

 

[Jonny_H]

Boat mortgages from my experience good, the following conditions usually apply:

10 Year mortgage if boat over 5 years old
15 Year mortgage if boat under 5 years old

15% deposit required

Repayments fixed and term will vary with interest rate (good for planning your finances I suppose)

Can't recall what rate ours was, but it was only around 0.5% higher than the house mortgage, (worked out cheaper as there was a penalty to pay for changing the house mortgage due to the 'deal' we are on).

They will require a survey on the boat.

Jonny

 

[nickfabbri]

So, it really does just boil down to buy it outright or take out a loan, and mortgages are not really mortgages just loans. Oh well better start saving

 

[Jonny_H]

[ QUOTE ]
mortgages are not really mortgages just loans

[/ QUOTE ]

Marine mortgages are loans secured on the boat (they retain the original copies of the boats VAT papers etc), so yes they are just loans but only the same way as a normal mortgage is a loan secured on your home.

Jonny

 

[pvb]

Mortgages...

[ QUOTE ]
So, it really does just boil down to buy it outright or take out a loan, and mortgages are not really mortgages just loans. Oh well better start saving

[/ QUOTE ]I think that they're called "mortgages" because, like house mortgages, the loan is formally recorded on the boat's registration documents.

 

[gjgm]

maybe one aspect you want to keep in mind is whether the outstanding debt actually equals the realisable value of the boat.. ie, how would you feel owing £75k if you can only sell the boat for £60k, for example.
I think running a boat often includes a certain playing with the numbers. If you pay outright, you only have the actual running costs... if you have the mortgage too.. thats interest and repayment each month, which might suddenly become an unaffordable monthly outgoing. Might not , of course...!

 

[PeterGibbs]

If you secure your mortgage on the boat you will probably need to register in Part 1, to show title etc. This will add to your costs through surveying of course, but perhaps be offset by saving any penalty charges arising from extending the mortage on your house.

If you are buying new there are a number of ways of managing your costs of purchase, legally. Come on back if you are taking this route.

PWG

 

[Jonny_H]

We didn't need Part 1 when we mortgaged with Bank of Scotland - they simply took the original copies of the proof of VAT and sale documents (we got copies in case we need them).

Jonny

 

[[2574]]

Jonny,

Interesting that they've kept the original VAT documents. I thought you needed to keep the originals on board for inspection by Customs and that copies would not be acceptable. Having said that with a colour photocopier who can tell an original from a copy these days!

 

[Jonny_H]

Robih,

We've got copies of the sale documents, VAT documents etc that are held by the bank along with a letter from the bank stating we only have copies as they have the originals - it has a phone number for any officials to call if they are concerned and want to speak to someone at the bank. Seems fair enough to me - although by the time we go out of Europe we will (hopefully) have paid off the mortgage so it won't be an issue!

Jonny

 

[wotayottie]

[ QUOTE ]
Another dumb question; when you buy a boat that is say worth 100k, how do most people buy them? Is it the norm to wait until you have the money in the bank

[/ QUOTE ]

yes if they have any sense. but waiting until you can afford something isnt fashionable these days

[ QUOTE ]


I have heard a great deal about boat mortgages but are these just a different name for loans with high interest rates?

[/ QUOTE ]

yes again.