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Old 01-10-2019, 05:59 PM   #21
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Risking your home over a boat is generally not a good idea...
Assuming default raises a personal liability as well as giving the lender the right to sell the secured boat,not sure it makes much difference. Eventually the lender gets a judgement and can execute against assets, incl your house. Unless of course US law quarantines the house from debt recovery.
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Old 01-10-2019, 06:13 PM   #22
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Assuming default raises a personal liability as well as giving the lender the right to sell the secured boat,not sure it makes much difference. Eventually the lender gets a judgement and can execute against assets, incl your house. Unless of course US law quarantines the house from debt recovery.
In most states, primary homes (and some times secondary homes) are protected and a lender would not be able to go after one's home for defaulting on a boat loan.
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Old 01-10-2019, 08:02 PM   #23
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In most states, primary homes (and some times secondary homes) are protected and a lender would not be able to go after one's home for defaulting on a boat loan.
Not if you have a mortgage on them, like a heloc or equity loan. They will get the house. If one is so financial insecure to risk that, I could argue to just pay cash for the boat, which would be my first option.
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Old 01-10-2019, 08:05 PM   #24
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History has proven that toys are first to go/payments stopped on. Stopping payment on a home equity line that was used to pay for a boat would put one's home in jeopardy instead of just a boat being repossessed it could be a home being foreclosed on.

Most lenders do not look favorably upon toys (boats) that are revenue generators (i.e. used for chartering, commercial purposes). They are higher risk. You will see higher interest payments as a result and fewer lenders willing to loan. Its not like a home that has a legal income producing apartment or extra unit which a mortgage lender would consider to be favorable.
Well, yes, and no. You would need a proven history to be a favorable creditor. And a home has no more of a "legal" income than a boat.

However, the cheapest loans are SFH, owner occupied with a large down and a really high credit score. But, there IS money out there for good business loans.

Perhaps, I'm not the one to ask as I've had no use for a bank in year, except that the buyers of my homes I sell usually use them, and the notes I take "subject to" I have to deal with banks. But, that's fun.
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Old 01-10-2019, 08:20 PM   #25
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Not if you have a mortgage on them, like a heloc or equity loan. They will get the house. If one is so financial insecure to risk that, I could argue to just pay cash for the boat, which would be my first option.
does not matter if there is a mortgage (or not) on the house if you default on a boat loan that is collateralized by the boat in a state that protects your primary house that you are living in. now lets say you have a loan secured by your home that is for your boat and you default on that. now, your house is at risk.
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Old 01-10-2019, 08:22 PM   #26
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Well, yes, and no. You would need a proven history to be a favorable creditor. And a home has no more of a "legal" income than a boat.

However, the cheapest loans are SFH, owner occupied with a large down and a really high credit score. But, there IS money out there for good business loans.

Perhaps, I'm not the one to ask as I've had no use for a bank in year, except that the buyers of my homes I sell usually use them, and the notes I take "subject to" I have to deal with banks. But, that's fun.
thats a blanket statement. i will counter and say there are many loans with tiny to zero down payment where individuals with moderate credit scores can get access to some of the lowest rates. (some federal and state programs, some with income limits, some without, some for houses in certain zones, some without that restriction)

an investor loan on a house is typically 1%+ higher than something owner occupied. same with boat loans, you say you are going to use the boat for charter or commercial purposes, expect a higher rate. banks view it as higher risk. if you live in a home and owner occupy it is less risk. if you have a legal apartment or second unit with income and owner occupy it is even lower risk.

the history i was talking about was 2008. history showed that people started defaulting on auto loans, loans on toys, and then finally houses. there is actually something going on in the past year indicating auto loan defaults are rising.
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Old 01-10-2019, 08:35 PM   #27
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thats a blanket statement. i will counter and say there are many loans with tiny to zero down payment where individuals with moderate credit scores can get access to some of the lowest rates. (some federal and state programs, some with income limits, some without, some for houses in certain zones, some without that restriction)

an investor loan on a house is some times 1% higher than something owner occupied. same with boat loans, you say you are going to use the boat for charter or commercial purposes, expect a higher rate. banks view it as higher risk. if you live in a home and owner occupy it is less risk. if you have a legal apartment or second unit with income and owner occupy it is even lower risk.

the history i was talking about was 2008. history showed that people started defaulting on auto loans, loans on toys, and then finally houses. there is actually something going on in the past year indicating auto loan defaults are rising.
Mystery,

Probably true, but I'll stand by my comment. In 2008 there was a crises. Banks were hard to deal with , but I got several of my buyers to get loans on SFHs. The risks are what they are. A solid credit history, with a home, the rates are the best. So, if you want the cheapest money, borrow on your home for the boat. And timing changes dramatically. The lenders seem to go thru the same mistakes every several years. They never learn. So, if you borrow, get them when they are down and get the best rates.

Personally, that's not my thing. I would never borrow on toys, as to me it makes no sense, with the exceptions I listed above. And, toys typically have the worst terms and suspect the highest default rate.

As for "legal" there's no such thing as a "legal" apartment, or second unit.
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Old 01-10-2019, 08:40 PM   #28
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I have seen the OP’s question come up several times on this forum. To date I have yet to see anyone say they actually got a loan on a boat older than 30 years. I am under the opinion that there is no source of money willing to accept a 30+ year old boat as collateral.

I know I had a conversation with Peoples Bank that has a marine loan division. Their comment to me was, “ we can get you the money, we just won’t use the boat as collateral “. They don’t do boat loans on boats over 30 years old.
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Old 01-10-2019, 08:48 PM   #29
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We used our local credit union, but then it's an exceptionally good one with great customer service. They didn't really have a lending category for a boat as big as ours so they categorized the loan as an RV. Yes most boats are toys, but when you see what banks so easily lend on giant RV'S - which are often also toys - I don't understand why so many lenders makes boats so much more difficult. We got a good rate but then we were lucky and only had to finance about 50% of the current value, for a relatively short time. 18 year old boat at the time. 20 would have been their limit for RVs.

(I know the topic of loans for toys has been debated 1001 times on the forum so I won't rehash it, but now that we have kids I have a very different perspective. Sure, it's financially wiser to defer my gratification and pay cash years from now but they won't be with us forever. Family memories...)
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Old 01-11-2019, 08:46 AM   #30
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there is actually something going on in the past year indicating auto loan defaults are rising.


Someone suggested to me that a ton of loans for vehicles bought under some whims of being a full time Uber driver or making them assume that their uber driving would pay for the car are going under
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Old 01-11-2019, 09:00 AM   #31
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We used our local credit union, but then it's an exceptionally good one with great customer service. They didn't really have a lending category for a boat as big as ours so they categorized the loan as an RV. Yes most boats are toys, but when you see what banks so easily lend on giant RV'S - which are often also toys - I don't understand why so many lenders makes boats so much more difficult. We got a good rate but then we were lucky and only had to finance about 50% of the current value, for a relatively short time. 18 year old boat at the time. 20 would have been their limit for RVs.

(I know the topic of loans for toys has been debated 1001 times on the forum so I won't rehash it, but now that we have kids I have a very different perspective. Sure, it's financially wiser to defer my gratification and pay cash years from now but they won't be with us forever. Family memories...)
Kthoennes,

And that makes sense.
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Old 01-11-2019, 09:02 AM   #32
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I have seen the OPís question come up several times on this forum. To date I have yet to see anyone say they actually got a loan on a boat older than 30 years. I am under the opinion that there is no source of money willing to accept a 30+ year old boat as collateral.

I know I had a conversation with Peoples Bank that has a marine loan division. Their comment to me was, ď we can get you the money, we just wonít use the boat as collateral ď. They donít do boat loans on boats over 30 years old.
Tilt,

You can get the seller to finance it for you. There are other non bank sources, too. Occasionally requires thinking out side the box.
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Old 01-11-2019, 09:31 AM   #33
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I guess if you decide to make the boat your only residence (live aboard) it just gets worse trying to find a loan. It’s still considered a toy and not a home .
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Old 01-11-2019, 02:27 PM   #34
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When I bought, I borrowed 80% on a boat less than 15 years from manufacture. The percentage they would loan went down significantly based on the number of years since the manufacture. I financed with Essex, and they wound up selling the loan to Great West. That's not a complaint, just a point of interest...
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Old 01-11-2019, 02:42 PM   #35
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I have seen the OPís question come up several times on this forum. To date I have yet to see anyone say they actually got a loan on a boat older than 30 years. I am under the opinion that there is no source of money willing to accept a 30+ year old boat as collateral.

In several of those threads, including this one, I have posted saying we did exactly that, got a loan on a boat more than 30 years old.
There are still options available, but not many. If you insist on telling the bank you will use the vessel as a residence I think the number quickly goes to zero.
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Old 01-11-2019, 02:44 PM   #36
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Seevee,

Some day I will want to sell my boat and I don't want to carry the paper. Odd thing is I do hard money loans on multifamily projects. For now my exit strategy is to own the boat for so long that its residual value will be so small that I can give it away.
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Old 01-11-2019, 02:54 PM   #37
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Stripper, thanks for posting again. You did mention key bank. I wrongly discounted your post as I was pretty sure they were on the 30 year program. Now I see that you actually did a boat older than 30 years. I know of several older OA's in excellent shape looking for financing. I will send them to key bank.
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Old 01-12-2019, 06:14 AM   #38
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Seevee,

Some day I will want to sell my boat and I don't want to carry the paper. Odd thing is I do hard money loans on multifamily projects. For now my exit strategy is to own the boat for so long that its residual value will be so small that I can give it away.
Haha that's a very realistic plan.
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Old 01-14-2019, 07:45 AM   #39
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Seevee,

Some day I will want to sell my boat and I don't want to carry the paper. Odd thing is I do hard money loans on multifamily projects. For now my exit strategy is to own the boat for so long that its residual value will be so small that I can give it away.
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Seevee,

Some day I will want to sell my boat and I don't want to carry the paper. Odd thing is I do hard money loans on multifamily projects. For now my exit strategy is to own the boat for so long that its residual value will be so small that I can give it away.

Tilt rider,

Heck, just take a note against the guys house or other property. Often a second has a ton of value.
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Old 01-14-2019, 08:18 AM   #40
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Tilt rider,

Heck, just take a note against the guys house or other property. Often a second has a ton of value.
Good luck collecting though if the boat payments ever stop. That's the problem, having a claim against an asset by itself doesn't put a dime in your pocket.
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