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loan rates


Ifinallygota21v

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I have a different view. Borrowing $$ at 4% is cheap. Timing is off to make a good example of the market at a 7% avg return however, there are other great investments out there right now (ie. real estate). If you can get a 20 yr loan because you have great credit, do it all day long as this is a great rate and we don't know how long these low rates will last. Put enough $$ down (at minimum 10%) to never get upside down (although as mentioned these boats hold their value incredibly well) and use your excess $$ for investments that will yield a much higher return than a 4% slowly depreciating asset will.

Then when the market tanks... again... there goes your cash, you could possibly get laid off and be stuck with a long term boat loan.
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Then when the market tanks... again... there goes your cash, you could possibly get laid off and be stuck with a long term boat loan.

Fair point however, I was suggesting alternate options for investments. When the market tanked last time, I pulled out my cash and invested in real estate (rental properties) which proved to be a wise move. It's all about risk/reward and where you want your $. I want mine where I have the best option for return and putting it into a boat when I can borrow for it at 4% isn't my first choice. One thing is for sure, if we're talking apples to apples in down payment (same for 5 yr vs 20 yr note), I would rather get laid off with a commitment to a low payment as opposed to one that would be multiples of that. Also, remember that you always have the option to add principal with a longer term loan, with the flexibility to put this extra $$ elsewhere in any given month.

Edited by NCSurfing
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I see no issue in a 20 year like others have said. You're gonna put 10 to 20% down and sell later anyway. Boatings what we do, every weekend I will never have that sort of cash to buy out right and I want to build memories with my kids while they want to build them with me, now not when I finally save up. Even if I take hit when I sell I just consider it the price of fun and good years while we're young. As soon as this sells we're going new with a long term note and if the economy goes bad big deal they repo a boat. I'll have bigger worries in that situation.

That is great financial planning that will ensure the financial success and security of your family.

if we're talking apples to apples in down payment (same for 5 yr vs 20 yr note), I would rather get laid off with a commitment to a low payment as opposed to one that would be multiples of that....

I never said to not get a 20 year notes, I said if you NEED a 20 year note in order to afford a boat, you can't afford it. Assuming similar interest rates, get a 20 year loan and just make 4x payments a month. Then it is a 5 year loan with the security of a low payment if an emergency were to happen. That's smart financial planning.

If you can't afford a boat without a 20 year loan, you simply can't afford it.

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I never said to not get a 20 year notes, I said if you NEED a 20 year note in order to afford a boat, you can't afford it. Assuming similar interest rates, get a 20 year loan and just make 4x payments a month. Then it is a 5 year loan with the security of a low payment if an emergency were to happen. That's smart financial planning.If you can't afford a boat without a 20 year loan, you simply can't afford it.

Gotcha...we're saying the same thing in terms of smart financial planning. I still don't see a problem with 20 yr notes for people who need them - if it makes them happy and they can manage their finances responsibly then I say go for it.

Edited by NCSurfing
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You can set your watch to it! Suze Orman pops into every single financing thread. LMAO.

Same as the guy in the tow vehicle thread (regardless of what kind) who says, "I can't even FEEL the boat back there!"

I prefer Dave Ramsey.
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+1 for Dave, cash is king and there is something refreshing about being debt free. To each is own though but making payments on something that sits in my garage for 6-7 months out the year never settled well for me. I like pink slips :-)

Edited by Fman
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I like pink slips :-)

Speaking of which, where does the term "pink slips" come from? I guess I've only titled things in Ohio (which are brown/tan/white for the most part). I've bought a few things out of state, none of which had any kind of documentation that was pink in color.
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I changed my financial situation when I bought the boat. I had always leased my cars. Always had a new cars every 2-3 years. When I bought the boat, I basically traded my new cars for a nice boat. I now have older cars that I own and have a loan on the boat. I justify it because I have a car allowance from work that is more than double my boat payment. My mortgage and boat are my only debt to speak of. I took a low interest, long term loan with a small payment and put a chunk down. I make big payments most of the time but have the ability to tighten up when I need to. I believe in being fluid and I have a solid exit strategy if need be. When rates do go up, and they will, I will be happy that I have cash in hand and a low interest loan in the boat. In my experience, that is when investment opportunities arise. Another great thing about my loan is that it is simple interest but any over payments allow me to not have to make a payment. Not to many loans that I know of, allow for this. As of now, I could go 3+ years without making a payment. I won't, but I could.

Edited by isellacuras
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Im a ramsey fan only to a point. Financing is not the work of the devel, but it can get you into bad trouble. I use it as a tool, financed boat cars and house when rates are low. If rates were 10% id rethink though, but these days, i say go low intrest rate, have a well thought out plan, exit plans to sell all if needed and have fun. When the kids grow up and leave, then sell if the boat is still newer or financed and then buy the low cost cash boat.

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Costco has 4% up to 20 years

Yeah, but even if you put a lot down or don't buy such an expensive boat, just borrowing say $50k for 5 years at that interest rate would cost you nearly $10k in interest in the time period. That's a large chunk of change and you still owe over $40k on the boat.

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I agree having no boat loan is best. However look at this from a different perspective. If John and Jane Doe have 3 kids, they set aside $500 a month every month for a once a year trip to Disneyland. No one sees a problem with that, but if John and Jane get a $500 boat payment to spend 10x as much time with thier kids then 1 week at Disneyland it is poor financial planning? I whole heartedly disagree. Spend as much quality time with your kids as you can, if that means a boat payment THAT YOU CAN AFFORD. Then do it. I am not advocating putting yourself into a payment to where you can't afford gas, but financing is not evil.

Same thing with autos. According to the wisdom here I should write a check for $60k instead of 0.9% financing? No way does that make sense.

Dang DarkSide I want your boat that runs on lollipops and rainbows when you finance it!

For me just towing to the lake and filling the boat run about 200 a day. So without even considering boat payments, I'm spending a whole lot more than John and Jane are (not to mention insurance, maintenance, having an inefficient tow vehicle for a DD, buying all the cool accessories you guys always find, etc).

Agree that boating is a fantastic way to spend time with family. But to equate it to saving 3K for a family vacation isn't realistic in my experience. Probably would be more reasonable to compare it to doing disneyland, hawaii, and a ski trip to Aspen. True cost of ownership (boat payment or not) is kinda staggering when you really think about it.

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If you need a 20 year loan in order to afford a boat, you can't afford it. IMO anything you can't comfortably pay off in 5 years is too much - car or boat. A house is about the only thing reasonable to finance longer.

Most people don't need it, but the longer term loans usually carry a much lower interest rate. I took a 12 year loan on mine and I make double payments. It's also great because if I'm tight on cash one month I can make the lower minimum payment to get by that one time (haven't utilized that option at all).

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Most people don't need it, but the longer term loans usually carry a much lower interest rate. I took a 12 year loan on mine and I make double payments. It's also great because if I'm tight on cash one month I can make the lower minimum payment to get by that one time (haven't utilized that option at all).

This is exactly what I do. I pay extra but if it's a hard month I can pay the min which is under $300. I would rather pay a few thousand in interest and have a boat now than to have one in 5 years when I'm too old to enjoy it like I do now.

Also keeping money saved up so you can pay all your bills if you have to go a few months without a job is better than dumping all of your savings into a toy.

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Shawn,

Your math is wrong, 500 x 12 is 6000 not 3000. Plus they only run on lollipop's and rainbows when you don't finance them. :-)

I do understand the point you are making though. It is an expensive hobby after the purchase of the boat. Also keep in mind people like you and I are outliers. The average is only 50 hours a year, not the 150+ that some of us are.

My point is also valid though, example a used axis with payment of $300, leaves $2400 a year for gas, insurance and maintenance. Which should be more than enough for the AVERAGE John/Jane. Again using averages, 50 hours a year,even at 10gph fuel usage is only 500 gallons so $1000 a year in fuel. That leaves roughly $1000 a year for maintenance, after $400 for insurance.

Your point is also valid, if they normally drive a prius, then the whole scenario doesn't work.

Edited by DarkSide
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Your point is also valid, if they normally drive a prius, then the whole scenario doesn't work.

Hey now, I had to buy a prius because daily driving a 3/4 ton diesel was ravaging my wallet.

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Nothing but love for the prius, just validating Shawn's point if they have to get a different tow vehicle it adds considerable cost to the equation.

I feel you, if I had to drive my truck as a DD, I would not have the same truck.

Edited by DarkSide
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Nothing but love for the prius, just validating Shawn's point if they have to get a different tow vehicle it adds considerable cost to the equation.

I feel you, if I had to drive my truck as a DD, I would not have the same truck.

Just giving you crap!

However I have to agree with SD on a tow boat costing more than 6k a year. I was paying 150 a month for covered storage. I think 1k a month or 12k a year is more realistic if we are talking financing everything (tow rig, boat, etc). The tow rig payment alone could totally blow the 6k a year budget.

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I like what a lot of people are saying but I do think its funny how one can justify ANYTHING that they want one way or another. Yes, family memories on a boat are great, but does a guy need a $100k wakesetter to make these memories? Ill look back to when I was a kid and my parents bought a new fridge and we used the box as a slide for the stairs for a months, pretty sure we wouldnt have cared if that was a 10 year old box or brand new.

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