Mortgages

[Jerbro]

Does having a boat mortgage add to the feeling of 'buyers remorse'? Or is it just the done thing with boats now? Are there really only the two big players in the mortgage game? Are there independents who can give a good deal?

Any words of wisdom appreciated (as long as they relate to the questions above of course).

Jerbro
====
Click here for <A target="_blank" HREF=http://www.btinternet.com/~jerbro> My boat pics</A>

 

[tcm]

I can tell you that even with 7-figure mortgages there's no remorse, cos of course the larger the boat mortgage, the larger the boat and hence the more fridges meaning more drinks are/were in the fridge, and lots of mates come round and say cor wow.

Seriously, best (cheaper) if you can borrow money other ways, most obviosuly via remort on house up to the hilt, and then call it a day at that level.

Note: your house is at risk if you set fire to it.

 

[BarryD]

Dave Steward has been known to broker a deal or two but I'm not sure he works at the lower end (read sub £100K) of the market. I htink it really is only Lombard and Barclays who play.

Game (almost) over...

 

[c_j]

Not generally known but Clydesdale Asset Finance (Clydesdale Bank) have looked at providing Marine Mortgages. I know because they asked me to show them round the SBS and introduce a few people, as I have done business with them for many years on Plant and trucks and stuff. Nice lunch in the Exhibitors lounge!! But they may not have a service in place yet, nor even intend too, but in any case could probably provide you with a really good deal as a normal asset finance deal, certainly beating the other two on rate.


CJ
chris@stone.uk.com

www.stone.uk.com

 

[tripleace]

If you can do it on your home. thats the cheapest.

If you want to see what home mortgages are available then my website can help and we even pay you back teh broker commission...


Direct link to the commission calculator is:

Triple Ace Link

 

[c_j]

A 10 year loan redeemable with no penalty at any time at say 1.5% over Bank Base (I don't want to go into specific lower rates which are available as it depends on so many individual factors) secured solely on the boat, may be more acceptable in many cases where buyers feel uncertain about economic conditions say in two to three years time.

If you have stacks of equity, and I mean stacks then OK and there are fixed rate deals around, but if you are on the borderline of bigish boat ownership I would not put my house on the line for it.

CJ
chris@stone.uk.com

www.stone.uk.com

 

[byron]

<font color=blue>When I was a young man NO ONE had a marine mortgage. Indeed it was difficult to even gain a house mortgage. As a result I look at a boat and automatically assume whom so ever owns it has paid cash. It always comes to me as a complete revelation when someone tells me it is on H.P. For my part, fossil that I am, I have never had a loan to buy a boat.

http://www.alexander-advertising.co.uk

 

[Deleted User YDKXO]

I dont think its such a good idea to remortgage your house to buy a boat. Firstly, you may not be paying off the capital element of the extra mortgage fast enough to keep pace with depreciation on the boat and, secondly, many mortgages dont allow early redemption or flexibility on payments. If you get into real financial problems, then your house is more at risk also. Anyway, the way pension funds are performing, the equity most people have in their houses will be their main source of retirement income so best not fritter it away on a boat

 

[jfm]

Re: Mortgages - consequences of default

IMHO you may be looking at things thru rose specs when you say "will not put house on the line for a boat".

If, say, you have a 500k house and 200k mortgage, so 300k equity, that equity is ALWAYS on the line. If you use the equity to secure a boat loan, and then you can't make the repayments, the boat lender will of course enforce security and pretty quickly deprive you of your house. But if you take a marine mortgage, or unsecured loan, so the house isn't mortgaged, and then you dont make the repayments, the lender is still going to enforce the debt and you will have to repay them out of the equity in your house, in the last resort. So, either way, the house is on the line.

Yes there's a difference in that if the lender has security on the house he has a simpler legal process than suing you and making you bankrupt so that you have to sell the house, but this is splitting hairs imho.

I do agree Deleted User's comment though, that with poor pension fund performance many people will need their house equity to trade down and release a big enough £££ sum for retirement......

 

[TerrifiedTony]

Having just gone through this very thought process to buy a new boat I can only suggest that there is no one size fits all. Only you know your personal circumstances and your threshold for risk, one thing is for sure you shouldn't simply be seduced by interest rates which is what c_j confirmed.

I spoke to Lombard and Royal Bank of Scotland at the LBS and both offered very flexible payment arrangements but the more flexible they were the more interest you eventually paid even using the same base line percentage (obvious really). I finally decided to take out an advance against my house, there were 3 main reasons.

a) I wanted to put the boat in my daughters name so avoiding Inheritance Tax if I manage a few more years and this immediately put the finance houses in a panic.

b) If I lose my job I am in the pooh anyway and may possibly have to sell the house if I have a boat or not.

c) 2 pecentage points better interest than the finance companies.

As I said these were my decisions and fit my circumstances I could well imagine other people would prefer to keep boat and house separate.

One last thing, I come from an era where you convinced the bank you were building an extension or fitting a new kitchen, you got a friendly builder to give you an estimate, got the money, went out and bought a new car! These days you don't have any of that, as long as you have the equity you can simply say you are buying a boat, no estimates needed. Bit frightening really !

Hope this helps
Tony

 

[hlb]

Re: Mortgages - consequences of default

This seems to bring up a whole new pot of worms. If and lets face it, the largest preportion of people in the country are middle aged, and as you say. Wish to trade down. The effect would be that the smaller houses in less desirable areas would be worth nearly as much as the most expensive. By market forces.

I believe like Byron. Money for toys (Boats) should be spare money, after paying due regards to pensions, savings and home ownership. We had all the crap about negative equity in the early 90's. Most things we purchase have negative equity. We expect it. Shares for instance at the moment. Certainly cars and boats. Theres no law that says houses have to be different.

<font color=blue> Haydn

 

[c_j]

Re: Mortgages - consequences of default

I agree that in the two instances you depict that may well be the case but in an agreement solely secured by the boat such as a hire purchase agreement, then the only recourse for the lender is snatching back the equipment.

That is of course why most lenders want a marine mortgage, so as they can have recourse to you should the equity in the boat not settle the outstanding mortgage.




CJ
chris@stone.uk.com

www.stone.uk.com

 

[neale]

Minor correction to Tony's post:

It is the Bank of Scotland that do marine finance not the Royal Bank of Scotland.
A small point but it may just avoid some strange looks from the staff in RBS branches up and down the country when asked about their Marine Finance.

Neale

 

[TerrifiedTony]

Re: Mortgages - consequences of default

I think another point to consider in your deliberations is how much equity you have in the boat. I agree with Haydn that you should separate toys from homes but if you have enough equity in the boat to be able to sell quickly at albeit a big loss you will still be able to walk away with a roof over your head. Painful I know but I would never borrow 100% of anything on a loan.

If of course the whole economy collapses and you cannot get rid of the boat at any price , well we are all in the deep and sticky stuff.

Tony

 

[tcm]

Re: Frittering away?!!

Huh! the way the stock market has been going, i have been making a wise investment in large plastic boats, and whereas its the others who have been frittering their money away on pensions and shares.

 

[jfm]

lecture on mortgages

c_j:

You are correct that if the loan is solely secured by the boat then your house is safe. This would be a limited recourse loan. As far as I know, no lender in the retail market offers such a loan - I challenge you to find one who does. HP is generally not limited recourse. As the hirer you are contractually obliged to pay the hire charges and if you dont the finance company can take the boat but can also pursue you for the unpaid hire charges, out of the equity in your house or any other dosh you might have

Re your second para, the reason lenders want marine mortgage is categorically not so that they can have recourse to you if the boat doesn't repay the loan. They have that anyway. Even an unsecured lender has recourse to you. The reason they want a mortgage is so that if you go bankrupt they are first in the queue to get paid out of the boat's value, and all your other creditors cannot claim the value of the boat alongside them.

Mortgages are about where the lender stands in the queue to get paid (and also to short cut legal process in enforcement). They are not about whether he gets repaid at all - that's a function of your gross assets which is what it is and no mortgage or suchlike can change it.....

all imho

 

[jfm]

Re: Frittering away?!!

Bolx! You make money on the stock market because it moves, not because it goes up. It doesn't matter which way it moves, so long as you make the right trade. If you think something will fall, sell short.

But totally agree re pension products. They all seem total crap to me, even the decent ones seem to be worth now a bit less than 5 years ago.....

 

[terryw]

There appears to be two schools of thought here about whether to remortgage the home, or get a separate Marine mortgage. I have a new marine mortgage through Barclays Marine Finance, but went through the same thought process before taking this route, so why? you may ask did I decide on a marine mortgage.
One reason was the house is our home, and the boat is our toy, and by separate finance one does not unduly influence the other.
Another reason was ensuring stability in keeping our toy when the economy goes belly-up. Currently my home mortgage is 5% and the boat 6%. If the Base rate rises in the future to 7% my home will be 8%, but the boat will still be 6% (but for longer). With this I always know what the boat is going to cost, although I cannot say for how long.
Third reason is home mortgages are generally for longer terms than 10 years, so you may pay £20 per month less (at the moment) by having a combined mortgage, but for a longer period, and therfore probably end up paying out more in interest in the long run.
Finally, based on the third reason, do you still want to be paying for a boat in 15 years time, which you sell next year. At least with a marine mortgage the loan is always relevant to the boat you currently own.

These are my reasons, and suit me, although everyone to their own.

 

[EME]

Re: Frittering away?!!

Bolx !!!

Only clever sods I've never met make bucks out of a declining Stock Market.. How many Fund Managers do you know liquidated their entire portfolio 2 years ago and are 'winning' on short term movements....?? If you know him please send pm , he/she can manage my dwindled life savings...

My 'New Boat' has lost 10% of its value this month before I've even paid for it...(?????)

<font color=blue>I am WHAT I say I am</font color=blue>

 

[jfm]

Re: Frittering away?!!

Agree fund managers are useless unless bull market. To make money on short positions, it's best either to invest in hedge funds (which you might have to do indirectly) or day trade yourself. Get a good brokerage account or even on-line. Contrary to the olden days, if you sell short you do not have to close out your shorts within a set period like 2 weeks or something - if your account is modest and your individuial trades are say sub-100k you can keep shorts open for months if you want.

If you want to increase the roller coaster effect you can also trade on margin and double the risk-reward.

Seriously this aint rocket science. Get a good broker and just do it, imho