So You're Thinking About Financing A Boat...
By Tom Schumacher, Thu Dec 8th

Once you've made your decision to buy a boat the first thingthat usually crosses your mind is, "How am I going to pay forit." The majority of purchases involve some level of boatfinancing, whether it's a credit line through the home, anunsecured loan, or a conventional boat loan. Choosing the rightfinancing source can be as important as choosing the right boat.

There are several factors to take into consideration whenchoosing a boat finance source. The first might be to determinehow long you intend on keeping the boat. If you are purchasingan entry level first boat, it will make sense to find a boatloan that will be flexible in the event of early payoff througha private party sale or trade-in. Conversely if you arepurchasing the boat of you dreams and expect to have it for along time it will be important to lock in at a fixed rate loanwith terms that will allow the comfort of a low monthly payment.This will allow you to make sure the boat will always beaffordable in future months.

Another factor to consider is the down payment. Most lenderswould like to see ten percent down for a boat loan. However,zero down scenarios do exist for people with optimum creditprofiles. Generally, the down payment does not significantlyeffect the monthly boat loan payment. You may be morecomfortable keeping the extra money in your account in exchangefor a payment that is not significantly higher. However, thereis one caveat to this approach. If you buy a boat with zerodown, make minimum monthly payments and then decide to sell theboat soon thereafter, you may actually owe more than it is worth.

The recent combination of high property values and low interestrates has made home equity loans and credit lines a viableoption for boat financing. This option can be particularly goodfor individuals with a challenged credit profile. These loansare based on the equity available in the home and can allow aperson with poor credit to get affordable terms that otherwisewould not be available. The drawback to these loans is that thehome equity is now tied up in a boat purchase. Conventional boatloan rates are very low. A person who can qualify at agreeableterms is usually better off with a conventional boat loan. Thiswill allow a person to keep the equity in the home for anemergency along with the ability to sell without encumbrances.

Choosing the right boat loan is an important step in the buyingprocess. A good place to start is with a boat finance brokerage,for example www.seadreaminc.com, that can show you how each ofthe options will fit into your profile. This will give you theability to find the loan that fits you best. Then you canconcentrate on the important stuff – like your first trip to thewater.

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About the Author: Tom Schumacher is the president of SeaDreamInc. Boat Loans and Boat Insurance - www.seadreaminc.com, theWest Coast leader in new and used boat loans, boat refinancing,and boat insurance. He as over 15 years of experience in theboat finance industry and is widely regarded as one of theindustry experts on boat financing.

About the author: Tom Schumacher is the president of SeaDream Inc. Boat Loans andBoat Insurance- www.seadreaminc.com, the West Coast leader innew and used boat loans, boat refinancing, and boat insurance.He as over 15 years of experience in the boat finance industryand is widely regarded as one of the industry experts on boatfinancing.