Approved for a boat loan, but bank does not like the boat.

[BDofMSP]

Not sure this works anymore under the new tax laws. If you're writing off the interest as mortgage interest on a second home, I believe this has been done away with.

Tator

Second home deduction has not been eliminated. Just capped at $750k in loans total.

 

[sunchaser]

Greetings,
Mr. s. Re: Post #27. It's not the $1000 IMO, it's the fact that the PO proceeded with the deal based on faulty/incomplete advice from the bank and that money is out of HIS pocket, NOT the banks.

I fully agree $1K is chump change in the greater scheme of the boating world.

In post #1 it seems to say the buyers spent $1000 for travel etc to look at the boat. Better than spending the same going to Disney World, he got to see and talk about boats.

 

[Seevee]

That is an approach that I'm sure works well for you. I have a loan at 3%, and investments which make far greater than that. When the loan is paid, I'll still have the principal. Or, I could spend years saving it until I have two few years left and in too poor health to enjoy the pile of money I give away at my death.

Why would I take interest generating principal and invest it in a depreciating item? That doesn't make a lot of sense either.

Shrew,
You plan sounds fine. You have a great rate for the boat but have other passive income that will cover you (I assume).

However, I could argue to take that 3% money and invest it in whatever is giving you a much greater return, and take the income from those items to pay cash for your boat, and you still have the income stream, not debt on a depreciating asset. You could use the income from the 3% money to make the boat payment if you can get another 3% boat loan, so your cash flow is zero, but you have the boat, plus an investment.

Another valid argument you make is that you're at an age where you're running out of time. And taking on the debt now so you can enjoy the boat now is not a bad idea. Kinda like a reverse mortgage. Investing in debt to enjoy it rather investing in debt to product an income stream.

The point that I'd like to make is that a lot of younger folks, without a lot of assets or backup money built up, feel good about taking on consumer debt to by toys. Boat, car, tv, motorcycle etc., and wonder why they are always broke, or worse, on the edge of bankruptcy.

 

[RT Firefly]

Greetings,
Mr. s. I've never been to Disney World nor do I plan to. I think the entry fee for FLIBS is in the $30 range if all one wants is to see and talk boats.
Moreover, this is a firm the OP has dealt with since the '70's. One would expect a certain amount of trust would be placed on the banks comments.


Basing a loan on the AGE of a vessel, I've heard of but NOT on what repairs may have been done in it's past. Bottom line for the bank is what is the survey value?

 

[BandB]

Greetings,
Mr. s. I've never been to Disney World nor do I plan to. I think the entry fee for FLIBS is in the $30 range if all one wants is to see and talk boats.

Wifey B: Poor RTF. You've lived a deprived life. No Disney World?

 

[RT Firefly]

Greetings,
Ms. WB. "You've lived a deprived life."

Homer has taught all other poets the art of telling lies skillfully. Aristotle

 

[Ski in NC]

RTF- Well done, sir.

 

[OldDan1943]

My boat is financed through UNIBANK in Whitinsville, MA.
Something for you to consider.
They were happy to lend me the money.

 

[alormaria]

RTF,


You've never seen the "Tiki Tiki Tiki Tiki Tiki Room"?

Where all the birds sing words and the flowers croon?

 

[Ventana]

We just purchased an old boat, financed through a bank. I did a lot of homework and out of the MANY places I tried, there was only one that would finance a boat over 25 years old, Key Bank. They would not have been my first choice, or even in my top ten, but they were the only choice. You don't mention the bank name that you were dealing with, but this should give you another option if it wasn't them.

 

[BandB]

RTF- Well done, sir.

Wifey B: Yes, darn it, RTF.

 

[Seevee]

One issue with borrowing money is the red tape and BS and intimidation one must go thru to get a loan. I think a lot of us can remember when your banker just said sure, here's the money go buy your boat, and I'll workup the paperwork for you later. All two pages.

Now, they want your life history, all of your assets and your dog's assets, anything that you have of value and anything you own on. And all the disclaimers, and promises and regulations just make it not fun anymore.

And the loan package is the size of a book and a special agent has to spend hours with you going over the whole thing. And then they give you a good rate, but smother you with hidden fees. And that was about 15 or 20 years ago for the last loan I'd even do with a bank.

 

[OldDan1943]

When I bought my first boat, a bank representative flew down and we signed the papers in the airport and he flew home. I guess that was about 20 years ago.
This time, the representative lives in town. The boat was less than 10 years old when I bought it. We met, I told him, if I cant get the loan, I am prepared to pay cash. That was the statement that got his attention.
I got the loan. SMILE

 

[Mrwesson]

Lightstream loans through suntrust.

Unsecured loan so they really don't care. I have about 3.8% APR on a 1979 Mainship 34.

 

[Marshmallow]

My local bank that did not tell me about the engine deal is actually giving me a great rate. 5.5% for 15 years. I would just assume use their money, and go have fun as I am not getting any younger.

Hunting around for other loans, most banks have a max age on the boat set at 20 years old, and one place had it set to 30 years old. Again my local bank beat that also. One thing that a lender did tell me was to think about an exit strategy. If I buy a 30 year old boat and keep it for 5 years, when I go to sell it, it will be 35 years old and the next buyer will not be able to get a loan on it.

 

[South of Heaven]

My boat is financed through UNIBANK in Whitinsville, MA.
Something for you to consider.
They were happy to lend me the money.

That is Sterling.

 

[ssobol]

Areas where boating is a popular activity tend to have banks that are more comfortable making boat loans. In areas where not much boating happens banks are less likely to make boat loans. One credit union I belong in the Midwest would not make a loan on the boat I currently own. The one I belong to in Seattle had no problem making the loan and did it in about 1/2 an hour.

 

[Andiamo2018]

We used USAA. As far as I remember their only thing was a good survey - unless your boat shows up on their boat version of 'blue book' value. They were pretty easy to work with but it did seem to matter who you talked to on the phone - it was all over the phone and email by the way.

Our boat is a 1984...

 

[Papa Charlie]

Banks are funny with regards to boat loans. There are fewer and fewer banks that make boat loans. We had this issue when we purchased ours, which is a 1991.

What we did find is that the smaller banks and credit unions have the most flexible rules when making decisions on loans.

You might reach out to several of the boat brokers in your area to find out which institutions are more flexible in their decision making.

 

[Blue Tortuga]

Fewer and fewer banks are doing boats over 30 years old unless you have substantial holdings (meaning you could pay cash for the boat). The bank should have told you at what age they wouldn't go. If you have any military background, USAA is dynamite to work with and will finance just about anything.

 

[ben2go]

I have know people to take lending institutions and insuring agencies to small claims court and win simply because they documented their troubles well. It may be a possible recourse.

 

[ProMaritime]

Close you account immediately. I have done this over trivial issues and they are usually shocked when you do it. Then send a letter to the CEO, tell that person why you closed the account and ask that they not reply further. Make a clean break.

 

[ben2go]

 

[BandB]

Easy to close an account but a challenge to find somewhere better to open a new one.

 

[RT Firefly]

Greetings,
Mr. BB. "...a challenge to find somewhere better to open a new one." Really? You must frequent different banks than I do. I've yet to see a bank yet that refuses to take your $$ although I guess stiffing a client $1K might be low on the gouge-o-meter.

 

[jimisbell]

Lightstream loans through suntrust.

Unsecured loan so they really don't care. I have about 3.8% APR on a 1979 Mainship 34.

I had never financed a boat in the past as I, like others earlier in this thread, feel that if you cant afford it, "you cant afford it". However as some have commented there times when you want to finance a boat if it is cheaper than liquidating other assets or to preserve a cash flow position.


This time I financed a 1978 Mainship 34. It is 41 years old. Does not have the original engine, and is not in Bristol condition. But I didnt go to the bank, the last loan holder financed it at 5% interest. He was facing foreclosure on the previous loan and didnt want to go thru the legal work to do it. Easier to just swap debtors and keep on with the loan. I didnt need to finance it but wanted to keep the money in the bank since I was involved in Hurricane Harvey rebuild of several properties and the best FEMA would do was 6%

 

[BandB]

Greetings,
Mr. BB. "...a challenge to find somewhere better to open a new one." Really? You must frequent different banks than I do. I've yet to see a bank yet that refuses to take your $$ although I guess stiffing a client $1K might be low on the gouge-o-meter.

Oh, they're willing to take your money and charge you all the fees they can, try to trick you into anything they can, set up accounts you never agreed to, and generally just engage in practices they shouldn't. They're just not very interested in really providing you with service.

While I haven't personally had problems, I've seen so many victims of their practices.

 

[RT Firefly]

Greetings,
Mr. BB. Given the "service" Mr. M (OP) has recently received from his bank, which he has a long history with, I doubt he could do much worse by closing his accounts and moving.

 

[BruceK]

Oh, they're willing to take your money and charge you all the fees they can, try to trick you into anything they can, set up accounts you never agreed to, and generally just engage in practices they shouldn't. They're just not very interested in really providing you with service.
While I haven't personally had problems, I've seen so many victims of their practices.

You might need what we are having, a Royal Commission into Banking and Financial Services. Final report yet to come but the elite of the finance, banking and insurance sector have found themselves in the witness box, answering questions they`d rather not. Like about fees charged for no service provided,eg when the insurer knew the customer had died but charged the account for advice fees anyway. Criminal charges are likely for some,on top of civil penalties and fix up costs.
In part I blame ASIC,the financial "watchdog",long referred to as "the watchpuppy",for not going in hard. But it comes back the the financial organizations themselves, which need their butt kicked, hard.

 

[Southx10]

Try a credit union, they are easier to work with and as a bonus most CU's charge interest to the loan after your pymt most banks charge before the punt. Doesn't sound like much but over the period of the loan the cost is lower.