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Deleted User YDKXO
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I know that bloke. He's a tosser. Don't take any notice of him
Look what got sent to me.....
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Deleted User YDKXO
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Agree with your points jfm. IMHO, borrowing against your house is a bad idea in principle because the outstanding capital will not depreciate as fast as the value of the boat depreciates. Of course, a rising property market will offset this but the temptation is to keep using your house mortgage as a way of upgrading your boat and, then when the downturn comes, you're in negative equity.
poltergeist
Well-Known Member
For years we were overpaying on our mortgage, and it was nearly repaid bar £4000, so we borrowed £48,000 to purchase our 2005 Sealine S28, which cost us £68,000. As we are on a tracker, and how interest rates have panned out, it currently works out an extremely cheap way of financing our boat. Even with the additional expense of three teenage kids, we overpay each month by £350, and I for one, cannot think of a better way that we could have financed it.
To say that borrowing against property is foolish ignores the fact that every case is different. If sensibly done, it could save you £1000's (that's if saving money could be used in the same context as boating, which, to be honest, I doubt !!!!!)
If borrowing against dubious increased property equity, when there is already a high loan amount in force, I totally agree that is pure folly.)
To say that borrowing against property is foolish ignores the fact that every case is different. If sensibly done, it could save you £1000's (that's if saving money could be used in the same context as boating, which, to be honest, I doubt !!!!!)
If borrowing against dubious increased property equity, when there is already a high loan amount in force, I totally agree that is pure folly.)
capsco
Well-Known Member
What you did seems to have worked out fine, would not recomend doing the same in the current climate.
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Deleted User YDKXO
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Fair points but you have sensibly overpaid on your payments to reduce the capital. The trouble is that most of the rest of the country seems to have used their property as a piggy bank to raid every time they wanted 2 weeks in Benidorm or plastic surgery for the wife
poltergeist
Well-Known Member
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What you did seems to have worked out fine, would not recomend doing the same in the current climate.
[/ QUOTE ]
We bought the boat in the current climate i.e after Northern Rock, if that counts. I'm in my early 40's, and left school when a supposed 1 in 10 were out of work (1982. Since then, we have witnessed one full blown house price meltdown, and what appears to be one that looms on an even larger scale. Without sounding cliched, both myself & my wife are from good working class backgrounds, where the value of money was instilled into us. We saved on good days, for times when the bad days arrived. I am on only just above average wages, & my wife works P/T in ASDA, but without trying to sound pious, have made it work.
There are many peeps around, that earn a heck of a lot more than we do, and have saddled themselves with alot more debt.
The point I'm trying to make is, that it's not the method of financing thats the problem, but some peoples lack of respect for money in general.
And if your thinking that I must have had a cosy & secure employment history, where there is a guaranteed wage, I'm on my 15th job since leaving school.
What you did seems to have worked out fine, would not recomend doing the same in the current climate.
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We bought the boat in the current climate i.e after Northern Rock, if that counts. I'm in my early 40's, and left school when a supposed 1 in 10 were out of work (1982. Since then, we have witnessed one full blown house price meltdown, and what appears to be one that looms on an even larger scale. Without sounding cliched, both myself & my wife are from good working class backgrounds, where the value of money was instilled into us. We saved on good days, for times when the bad days arrived. I am on only just above average wages, & my wife works P/T in ASDA, but without trying to sound pious, have made it work.
There are many peeps around, that earn a heck of a lot more than we do, and have saddled themselves with alot more debt.
The point I'm trying to make is, that it's not the method of financing thats the problem, but some peoples lack of respect for money in general.
And if your thinking that I must have had a cosy & secure employment history, where there is a guaranteed wage, I'm on my 15th job since leaving school.
poltergeist
Well-Known Member
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The trouble is that most of the rest of the country seems to have used their property as a piggy bank to raid every time they wanted 2 weeks in Benidorm or plastic surgery for the wife
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Two of many examples Mike - and agree totally.
The trouble is that most of the rest of the country seems to have used their property as a piggy bank to raid every time they wanted 2 weeks in Benidorm or plastic surgery for the wife
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Two of many examples Mike - and agree totally.
MapisM
Well-Known Member
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What jfm means is that even a contract for, say, routine maintenance exposes all of one's assets
[/ QUOTE ]Mmmm... not sure if that's what jfm meant. The debate was a tad more technical actually.
I mean, your example wouldn't fit a plain vanilla leasing contract, though it would fit the kind of boat leasing contracts jfm was talking about, 'cause according to him they're actually personal loans contract, just formalized as leases.
Which is perfectly possible, I simply wasn't aware of that.
Aside from it, surely any kind of personal responsibility could expose personal properties as in your example: debts for routine maintenance, your dog biting a child, not paying a bill - you name it.
But that's a different matter altogether, innit?
What jfm means is that even a contract for, say, routine maintenance exposes all of one's assets
[/ QUOTE ]Mmmm... not sure if that's what jfm meant. The debate was a tad more technical actually.
I mean, your example wouldn't fit a plain vanilla leasing contract, though it would fit the kind of boat leasing contracts jfm was talking about, 'cause according to him they're actually personal loans contract, just formalized as leases.
Which is perfectly possible, I simply wasn't aware of that.
Aside from it, surely any kind of personal responsibility could expose personal properties as in your example: debts for routine maintenance, your dog biting a child, not paying a bill - you name it.
But that's a different matter altogether, innit?
jfm
Well-Known Member
No, that is what I meant Mapis. People often confuse the fact that they've pledged an asset (house, boat) for a personal loan with the fact the loan is STILL a personal obligation with full recourse.
I don't see why you think there is lack of logic in the boat leasing situation. Lease contrats are invariably simple contractual obligations of the lessee. If Mr Punter leases a boat for €2000/month and defaults with 36 months still to run, he still owes the lessor a lot of money. Lessor can sell or re-lease the boat to someone else to recover some of his loss, but any shortfall is an obligation of Punter If Punter doesn't pay, Lessor ultimately gets Punter's house, just as BJB said. €1000 owed on maintenance (as in BJB's example) and €50,000 or whatever of broken lease debts are the same thing - they're just personal debts and you will lose your house (or whatever) if you don't pay. The fact Mr Punter didn't mortgage his house makes absolutely no difference
If I rent a car from Hertz for a day for €50 and my credit card bounces, when I return the car that evening I owe them €50. I cannot say "Hey, just take the car back and let's call it quits". If I dont pay the €50 then ultimatley Hertz will sell my house (thru a bailiff) and get their money that way.
To state the sometimes overlooked obvious, leasing and borrowing are mostly the same thing. A wants use of an asset, B has money and wants to earn interest. B can lend money to A, or B can buy the asset and lease it to A. Yes there are many differences in terms of detail and tax and things, but broadly they are the same transaction.
So in this whoke thread the suggestion "it is ok to have a loan mortgaged on the boat to buy a boat, but not a loan mortgaged on the house" worries me in case people think their house is out of reach of the boat-mortgage bank in a default. It isn't. That's all I'm trying to say!
I don't see why you think there is lack of logic in the boat leasing situation. Lease contrats are invariably simple contractual obligations of the lessee. If Mr Punter leases a boat for €2000/month and defaults with 36 months still to run, he still owes the lessor a lot of money. Lessor can sell or re-lease the boat to someone else to recover some of his loss, but any shortfall is an obligation of Punter If Punter doesn't pay, Lessor ultimately gets Punter's house, just as BJB said. €1000 owed on maintenance (as in BJB's example) and €50,000 or whatever of broken lease debts are the same thing - they're just personal debts and you will lose your house (or whatever) if you don't pay. The fact Mr Punter didn't mortgage his house makes absolutely no difference
If I rent a car from Hertz for a day for €50 and my credit card bounces, when I return the car that evening I owe them €50. I cannot say "Hey, just take the car back and let's call it quits". If I dont pay the €50 then ultimatley Hertz will sell my house (thru a bailiff) and get their money that way.
To state the sometimes overlooked obvious, leasing and borrowing are mostly the same thing. A wants use of an asset, B has money and wants to earn interest. B can lend money to A, or B can buy the asset and lease it to A. Yes there are many differences in terms of detail and tax and things, but broadly they are the same transaction.
So in this whoke thread the suggestion "it is ok to have a loan mortgaged on the boat to buy a boat, but not a loan mortgaged on the house" worries me in case people think their house is out of reach of the boat-mortgage bank in a default. It isn't. That's all I'm trying to say!
longjohnsilver
Well-Known Member
[ QUOTE ]
I know that bloke. He's a tosser. Don't take any notice of him
[/ QUOTE ]
Funny, I thought exactly the same /forums/images/graemlins/grin.gif
I know that bloke. He's a tosser. Don't take any notice of him
[/ QUOTE ]
Funny, I thought exactly the same /forums/images/graemlins/grin.gif