Home   |  Message Board   |  Information   |  Classifieds   |  Features   |  Video  |  Boat Reviews  |  Boat DIY
Home equity line of credit for boat - Walleye Message Central
Walleye Message Central

Go Back   Walleye Message Central > Boat Insurance and Financing (Sponsored Forums) > Boat Loans / Extended Warranties 101

Notices

Reply
 
Thread Tools Display Modes
  #1  
Old 07-15-2015, 11:19 AM
Cwuest34 Cwuest34 is online now
Minnow
 
Join Date: Aug 2014
Location: Cheesehead
Posts: 64
Default Home equity line of credit for boat

Is anyone familiar with these? I'm looking to purchase a used boat in the 2003-07 range. It seems like this is a better route to go vs a short boat loan. My local credit union only offered a 4yr boat loan.

Experiences?!?! Thanks
Reply With Quote
Sponsored Links
Advertisement
 
  #2  
Old 07-15-2015, 01:04 PM
97roughneck's Avatar
97roughneck 97roughneck is offline
Wallhanger
 
Join Date: Sep 2009
Location: S.Deezy
Posts: 690
Default

I just did a HELOC (home equity line of credit) but I did it to buy more rental property, not to purchase toys.

Having said that, I know that lots of people do this to purchase toys, it makes sense to the point that the interest is deductible on HELOC, whereas on consumer loans it is not.

I don't know if they're all structured like this or not, but on mine, there is only an interest payment due every month. It's up to me how much principle to pay and I like having that flexibility.

Also, it was a lot easier for me to qualify for a HELOC than it was for a 30 yr. mortgage on non-owner occupied real estate. The Great Recession really put the clamps on that particular type of loan.
__________________
"On the plains of hesitation lie the bones of millions."
Reply With Quote
  #3  
Old 08-13-2015, 01:50 PM
mk cant log
Guest
 
Posts: n/a
Default

Quote:
Originally Posted by Cwuest34 View Post

Experiences?!?! Thanks

If you pay the HELOC off in a short time its a good idea.

Problem is.. many people don't and then they roll the HELOC into the first mtg. by refi'ing and end up paying for a car or boat for 30 years or more. There are many Millions of people that are paying for kids tennis shoes, tanks of gas, dinner at Applebee's, and vacations for 30+ years because they paid off their credit cards with the HELOC and then refi'd it into a new first mtg.


As long as you pay it off in a few years, its not a bad way to finance a used boat. Having the line of credit available is very tempting, more so than many people can resist.


Also, most, if not all, HELOCs have variable interest rates. If rates go up, your rate and payment goes up. They've been level for quite a long time but who knows about next year.
Reply With Quote
 
  #4  
Old 08-14-2015, 01:09 PM
Ferg85 Ferg85 is offline
Minnow
 
Join Date: Oct 2012
Location: Winchester, WI
Posts: 35
Default Line of Credit

I keep a Line of Credit open. I have used it for Cars and Boats. Great tool with several advantages. Buying power when buying from a dealer, the interest is usually a tax deduction like your home mortgage interest, and convenience.
__________________
2012 LUND 186GL
175 Opti Pro XS
Reply With Quote
  #5  
Old 08-21-2015, 09:42 AM
GBS GBS is offline
Wallhanger
 
Join Date: May 2005
Location: White Bear Lake, Minnesota, USA.
Posts: 1,439
Default

We've done it several times, and actually have a couple of HELOC's available to us (currently unused) if needed. Fixed interest rates through our credit union are unbelievably low, as compared to other loans. Add in the tax deduction, and it is as close to "free" use of someone else's money as you can get. Our financial advisor actually prefers the careful use of this over pulling money out of investments, as we only are reducing long term gains, rather than giving them up completely by pulling out money.

BUT - this is what in the old days would be a 2nd (or 3rd) mortgage. Meaning it is your house on the line if you don't pay, and they have to be completely paid off if you ever sell your house. So you can be in big doo-doo if you get over exuberant with the concept!
Reply With Quote
  #6  
Old 09-24-2015, 02:04 PM
Phil T Phil T is offline
Wallhanger
 
Join Date: Jul 2008
Location: Moorhead, MN
Posts: 4,819
Default

Every summer my credit union has boat or RV loans for around 3%. Why risk anything attached to your house? In my cheap opinion, if you can't pay for a boat in 4 years, you can't afford it. Toys depreciate quite quickly, but a home appreciates (long term) with inflation or better.
Reply With Quote
  #7  
Old 09-24-2015, 05:25 PM
Catch 22 Catch 22 is offline
Keeper
 
Join Date: Jul 2013
Posts: 391
Default

You have had some good insight here so far. All I will add is that HELOC's can be a pro or con depending on your personal decision making and discipline .

First of all, is it to provide a source for more income???.......great.....choose wisely...

If it is for gratification and toys......think.... if you honestly can pay it back on regular intervals ....OK....

For so many, however......HELOC's are easily forgotten about and serve only to be a drain on equity.............another way of saying that you may end up way underwater on your home.....

Recent history calls eh????
Reply With Quote
  #8  
Old 10-04-2015, 01:03 PM
MN1965 MN1965 is online now
Keeper
 
Join Date: Sep 2015
Posts: 316
Default

I don't like the idea of anything attached to my home. I wouldn't do it.
Reply With Quote
  #9  
Old 10-04-2015, 03:39 PM
grizzley grizzley is online now
Wallhanger
 
Join Date: Mar 2012
Location: NE pa.
Posts: 1,696
Default

[QUOTE=Phil T;4223482] Why risk anything attached to your house?

Quote:
Originally Posted by MN1965 View Post
I don't like the idea of anything attached to my home. I wouldn't do it.
I'll third that!
Even though a lot of people use a home equity loan, I would never jeopardize my home to buy toys, never!
Reply With Quote
  #10  
Old 05-18-2016, 09:11 PM
WillowAce WillowAce is offline
Minnow
 
Join Date: May 2016
Location: Minocqua, WI
Posts: 12
Default

From an accountants perspective using a HELOC to purchase a boat isn't the worst idea. Yes, the interest is tax deductible. Also in today's lending environment the interest rate is attractive if you must finance. Somewhere around 4% tax deductible interest is a lot better than 6 - 7% nondeductible interest. The key is that the loan is fixed rate and you are both disciplined enough and have the disposable income to pay it off.

With-that-said, should you use your home to buy a boat? I will say this, as long as the return on your investment is higher if you keep the money where it is at than the interest on the loan use borrowed money. If the interest on the loan is greater than return on investments use your money. It makes no sense to use someone else's money if the weighted cost of capital is greater than your internal rate of return.
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -6. The time now is 08:36 AM.


Powered by vBulletin® Version 3.8.8
Copyright ©2000 - 2017, vBulletin Solutions, Inc.
vBulletin Security provided by vBSecurity v2.2.2 (Pro) - vBulletin Mods & Addons Copyright © 2017 DragonByte Technologies Ltd.