Financing an older boat

Don L · 05-19-2023, 04:42 PM

Yes I know there are old threads, but .....

The Admiral wants to move from sail to a trawler. In looking into it seriously it looks to me that we would be looking at a 1980-1990 boat. In that range I can see a seemly jump in boat condition that would exceed the liquid funds I would have to put into the boat. Now I can acturally come up with the funds, but it comes with a 20+% hit and therefore would be less to finance it.

So who has recently managed to finance an 1980s boat at say a 30-40% loan to value ratio? If you did who did you use?

kthoennes · 05-19-2023, 05:10 PM

You're right, this has been covered in previous threads but very quickly, before we bought our current boat, we did buy a 1985 Carver at one point, fairly recently. We used our local (well, state-based) credit union and they financed it like an RV, used the category of "recreational vehicle" they used for RV's, boats, ATV's and the like. We also have accounts with the big national banks like Wells Fargo and Bank of America, but we didn't even bother try those. Valuation on old boats can be a challenge because sales data is so limited, but it was a breeze for us. We financed our current boat that way too but didn't have the age challenge because it was newer. Our loan to value ratio was about 50% on the old boat, about 30% on the current boat.

FWT · 05-19-2023, 06:50 PM

Looking in forums or social media is a natural first start, but it won't take you far. kthoennes used his local credit union but each and every one will be different. What matters on that avenue is the ones near you, so you just have to ask yours.

Ask the questions and research, but don't waste too much time doing it. Instead you are just going to have to commit the time to dig out a lot of sources and make the phone call to ask. Local banks. Lots of specialized boat lenders with an online presence you can find. Just make the lists, get the numbers and go down the list and call. There are no short cuts. It would not be shocking if you have to try a dozen on that age of boat. Count your blessings if its less.

I will second the comment above. Your notion of loan to value and theirs may well differ and differ substantially because their opinion of value can be very different than your purchase price. Since you have some room this should be surmountable.

Good luck.

Edited to add: if you buy via a broker, the broker will likely know what lender is likely to make the loan.

Action · 05-20-2023, 03:36 PM

Other solution would be to get a loan not secured to the boat. Taking the factors of the boat out of the equation.
Line of credit secured to Real Estate
Cash out loan on a F&C primary residence.
Unsecured loan
Cash out of some other asset

Comodave · 05-20-2023, 03:55 PM

There are some specialty loan brokers that have banks that will do older boats. We used Sterling Associates for our last boat.

Seevee · 05-20-2023, 07:16 PM

I could make an argument to not finance toys, but there are reasons for financing a boat...could be your home, or you're getting a better return on investing your dollars than the rates for financing.

If financing is needed, getting a loan on a dirt home (second or HELOC) is probably the cheapest money.

However, worth shopping it.

Don L · 05-20-2023, 08:52 PM

Quote:

Originally Posted by Action

Other solution would be to get a loan not secured to the boat. Taking the factors of the boat out of the equation.
Line of credit secured to Real Estate
Cash out loan on a F&C primary residence.
Unsecured loan
Cash out of some other asset

Got no restate. Have more than enough in 401k/IRAs etc. But taking money out of them acturally works out to 20%+ loss/tax so a personal/boat loan is a better deal.

tiltrider1 · 05-20-2023, 10:39 PM

Right now I don’t know of anyone financing boats built before the 90’s. This doesn’t mean you can’t find some one. It does mean you will need to work hard at it.

You can borrow against a 401K but I don’t recommend it.

Sometimes, when it’s very difficult to do what you are trying to do, it’s a sign that maybe it’s not a smart thing to do.

Comodave · 05-20-2023, 10:55 PM

I can’t make any arguments either for against anyone else financing a boat. That is entirely their decision and everyones needs are different. It may take some effort to find a lender but keep at it and there is probably someplace that will do it.

Cartouche · 06-05-2023, 07:57 PM

Quote:

Originally Posted by Don L

Got no restate. Have more than enough in 401k/IRAs etc. But taking money out of them acturally works out to 20%+ loss/tax so a personal/boat loan is a better deal.

Mean this with the greatest of respect but if you need to finance a 50K boat and do not have Real estate you are probably going to run into problems as the boat needs fixing, as we all know older boats the purchase is only the beginning. I would stick to sailing and leave my retirement funds alone, just my 2 cents

SeaDogAK · 06-05-2023, 08:25 PM

I’ve financed several boats through a credit union, generally at more than 40% loan to value, without problems. One advantage to financing is that you may qualify for a second home tax deduction on the interest.

Don L · 06-05-2023, 09:18 PM

Quote:

Originally Posted by Cartouche

Mean this with the greatest of respect but if you need to finance a 50K boat and do not have Real estate you are probably going to run into problems as the boat needs fixing, as we all know older boats the purchase is only the beginning. I would stick to sailing and leave my retirement funds alone, just my 2 cents

you didn't understand the question at all

SeaDogAK · 06-05-2023, 09:57 PM

I should have added that the credit unions I’ve dealt with didn’t care how old the boat was, as long as it surveyed for enough.

Action · 06-05-2023, 10:06 PM

Quote:

Originally Posted by SeaDogAK

I should have added that the credit unions I’ve dealt with didn’t care how old the boat was, as long as it surveyed for enough.

In the past I have had the same experience. Especially if the risk (loan amount was low to value) was low enough. Many times if the loan is attractive a CU is open to bending some rules. Unless that have had a default.
Know that my experience is a couple of decades old when I financed a boat. I have not financed any boat or RV in this century.

Things do change so was not sure if that is the same now.

Action

Pete Meisinger · Yesterday, 07:45 AM

Use a home equity loan.

pete

Comodave · Yesterday, 08:50 AM

Quote:

Originally Posted by Pete Meisinger

Use a home equity loan.

pete

Ha said he has no real estate.

Don L · Yesterday, 01:14 PM

Quote:

Originally Posted by SeaDogAK

I should have added that the credit unions I’ve dealt with didn’t care how old the boat was, as long as it surveyed for enough.

mine cares about the boat age