So You're Thinking About Financing a Boat...
Once you've made your decision to buy a boat the first thing
that usually crosses your mind is, "How am I going to pay for
it." The majority of purchases involve some level of boat
financing, whether it's a credit line through the home, an
unsecured loan, or a conventional boat loan. Choosing the right
financing source can be as important as choosing the right boat.
A great way to learn about your marine financing options is a
boat loan brokerage like SeaDream Marine Financing,
www.seadreaminc.com.
There are several factors to take into consideration when
choosing a boat finance source. The first might be to determine
how long you intend on keeping the boat. If you are purchasing
an entry level first boat, it will make sense to find a boat
loan that will be flexible in the event of early payoff through
a private party sale or trade-in. Conversely if you are
purchasing the boat of you dreams and expect to have it for a
long time it will be important to lock in at a fixed rate loan
with terms that will allow the comfort of a low monthly payment.
This will allow you to make sure the boat will always be
affordable in future months.
Another factor to consider is the down payment. Most lenders
would like to see ten percent down for a boat loan. However,
zero down scenarios do exist for people with optimum credit
profiles. Generally, the down payment does not significantly
effect the monthly boat loan payment. You may be more
comfortable keeping the extra money in your account in exchange
for a payment that is not significantly higher. However, there
is one caveat to this approach. If you buy a boat with zero
down, make minimum monthly payments and then decide to sell the
boat soon thereafter, you may actually owe more than it is worth.
The recent combination of high property values and low interest
rates has made home equity loans and credit lines a viable
option for boat financing. This option can be particularly good
for individuals with a challenged credit profile. These loans
are based on the equity available in the home and can allow a
person with poor credit to get affordable terms that otherwise
would not be available. The drawback to these loans is that the
home equity is now tied up in a boat purchase. Conventional boat
loan rates are very low. A person who can qualify at agreeable
terms is usually better off with a conventional boat loan. This
will allow a person to keep the equity in the home for an
emergency along with the ability to sell without encumbrances.
Choosing the right boat loan is an important step in the buying
process. A good place to start is with a boat finance brokerage,
that can show you how each of the options will fit into your
profile. This will give you the ability to find the loan that
fits you best. Then you can concentrate on the important stuff -
like your first trip to the water.