Here are ten tips for getting the best boat loan fromBoatUS, just in case you’re still looking for a new ride for this summer. Or print this out and take it with you to the shows next fall. It will help make the boat-buying process a lot easier.
1.Undeerstand the basics. A fixed-rate, simple-interest loan is the most common, with the same monthly payment for the life of the loan, usually from ten to 20 years, after a 10 percent to 20 percent down payment. Variable rate loans usually offer a fixed rate for a few years, and then a variable rate.
2.Don’t fall for the ads. You might see an ad for a relatively low rate, say 4 percent. But then there’s usually some fine print. That rate might apply for just a few years, or the loan period may be for a short period of time.
3.Forever young. Interest rates are lower and loan terms are usually longer for newer boats than they are for older ones. You may have to pay a larger down payment, with higher rates for a shorter term for an older boat.
4.Calculate your monthly payment. Figure out how much boat you can afford. The lender will review your debt ratio and other things.
5.Credit check. Before you apply for a loan, make sure your credit report is accurate and get your current credit score. The closer to 700 or more, the better rate you’ll get.
6.Get preapproved. Ask the lender if you can get approved before you start shopping seriously or have a signed sales agreement.
7.Home equity line of credit (HELOC). You can still finance a boat using a HELOC, but under the new tax laws you can’t deduct the interest on anything that does not apply to your principal residence.
8.Second home deduction. If you itemize your taxes, you can still deduct the interest on a boat loan if it has a berth, head and galley. This is the second home deduction, and it’s capped at $750,000.
9.Don’t count your chickens. Even if you think you’ve found your dream boat, and you’ve qualified for a loan, make sure you hire a good marine surveyor before any money is exchanged. You never know…
10.Closing costs. Make sure you know all the fees and closing costs associated with your loan in advance. Read more:
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