Best route of finance

[Knotty]

Hi all

 

We have an appointment next week to organise finance for our boat.

 

After looking around the forums we are not sure whats the best to go for now! We thought about releasing equity in our house, as the mortgage pays for itself now ( we have tenants in)

 

has anyone else been in this postition when buying a boat..

 

We dont have cash lying around to purchase, however we have clean credit history, good equity, etc

 

Whats the best road to go down, and are there any things your definatley wouldnt advise doing?

 

We want to keep hold of the house, as its a little nestegg

 

Thanks

 

Knotty xx

[DaveR]

We went to Tesco's they offer the best rates and between the wife and myself we got what we wanted (2 loans).

 

Simple, easy and a damned good rate.

[NB Alnwick]

We dont have cash lying around to purchase, however we have clean credit history, good equity, etc

 

Whats the best road to go down, and are there any things your definatley wouldnt advise doing?

 

We want to keep hold of the house, as its a little nestegg

 

To get a decent low rate of interest in the present climate you will have to provide some form of security and if you use the boat for that you may not get the full amount you need and the interest will still be significantly higher than a mortgage.

 

If you take out a mortgage on the hyouse you can get some very good deals - we were recently offered 4.2% APR FIXED FOR FIVE YEARS but it is best to go to a good mortgage broker and make him really work for you to get the best possible deals - he will also explain all the small print and tell you what could happen if things go wrong - banks and supermarkets don't always do that. The other important thing is to use a broker that:

 

a) does not charge a high fee for working for you - you may need to shop around; and,

 

is a 'whole of market' broker - in other words he doesn't just look at the lenders that pay him the highest commission

 

These are not my words of wisdom - I have been reading Martin Lewis's money saving tips - essential reading in my opinion.

Edited February 4, 2007 by NB Alnwick

[tomandsophie]

We've just moved our boat payments from RoyScot Larch where we were paying a whopping 9% interest (!) over to HSBC where we are paying 5.4% interest, thus reducing our repayments by 2 years! Well worth shopping around.

[Hobart]

We've just moved our boat payments from RoyScot Larch where we were paying a whopping 9% interest (!) over to HSBC where we are paying 5.4% interest, thus reducing our repayments by 2 years! Well worth shopping around.

 

We're trying to escape the clutches of that bank. but really hard as all our student debt is tied up there, and all the banks who think it's a good idea not to support unethical trade are so picky about who they take as customers, they won't even consider giving either of us a current account. And we've got a reasonable credit history. Weird. Credit history - there's another ridiculous concept... I won't go on.

 

Back on topic. There's quite a few companies out there that specialise in Marine Mortgages, but the only high street bank I can think of is Barclays (Barclays Marine Finance), but that's if you have a 20% deposit. Otherwise, like us, you'll have to get personal unsecured loans. Not that easy if you tell them it's for a boat. Apparently it's much easier to get a loan if you say it's for 'home improvements'. Surely a boat is a big improvement on a house anyway! If you're a wishy-washy person who wants to waste their money on a depreciating asset, the computer will say 'no... cough cough'.

[Big John]

We've just moved our boat payments from RoyScot Larch where we were paying a whopping 9% interest (!) over to HSBC where we are paying 5.4% interest, thus reducing our repayments by 2 years! Well worth shopping around.

Sounds very interesting. What sort of loan do you now have? Is it secured by the boat?

[Knotty]

Hi all

 

Thanks for your replys, some really interesting information and links...eternally gratefull!

 

Well Shauns of to the bank this week so hes decided to vagely test the waters ( scuse the pun!) see what they have to say, and if they can offer any deals ( Natwest) Then I think we will look at all the options posted here... shop around like you say! always good to save a few beer tokens here and there!

 

Will Keep you all posted!

 

 

xx

[charles123]

To get a decent low rate of interest in the present climate you will have to provide some form of security and if you use the boat for that you may not get the full amount you need and the interest will still be significantly higher than a mortgage.

 

If you take out a mortgage on the hyouse you can get some very good deals - we were recently offered 4.2% APR FIXED FOR FIVE YEARS but it is best to go to a good mortgage broker and make him really work for you to get the best possible deals - he will also explain all the small print and tell you what could happen if things go wrong - banks and supermarkets don't always do that. The other important thing is to use a broker that:

 

a) does not charge a high fee for working for you - you may need to shop around; and,

 

is a 'whole of market' broker - in other words he doesn't just look at the lenders that pay him the highest commission

 

These are not my words of wisdom - I have been reading Martin Lewis's money saving tips - essential reading in my opinion.

 

 

As Graham says the Martin Lewis site is a good one for many aspects of finance, I have learned many things from it over the last couple of years. With interest rates high at present we have all "missed the boat" for 4 or 5% loans for the moment.

You dont say how much you need but some of the banks have close to base rate loans with no fee and no penalty to overpayments or paying off the loan, these are loans not mortgages, but they will be against the equity in the house. If you go to anywhere but banks for a loan you will be paying way above base rate. I would consider selling the house with the tenant, buy a smaller one or appartment and put a tenant in that, this should release a usefull chunk of cash towards the boat purchase and you will still have a nest egg for the growth in the property market

 

good luck

 

Charles

[tomandsophie]

Sounds very interesting. What sort of loan do you now have? Is it secured by the boat?

 

No, just a regular unsecured loan. It was a 'January Sales' offer though, finished on 31st January. Sorry!

[Knotty]

We are looking at £40k release of money as a budget for our first boat.. but looking to spend upto 35k/36k ideally on the actual craft. This gives us enougth to ensure a survey is done, cover insurance licence etc, and any teething problems with no doubt there will be!

 

We thought about maxing credit cards up, as we have recently paid them all of and switch to interest free offers but we would rather keep them as a standby for any emergency money if needed for the boat in the future.

 

I have put the link of Martin Lewis into my Fave folder Thanks !

 

We have also decided to sell our 4x4 and buy a little run about as we wont be living up in the fells ( were liturally in the clouds!) we dont need it any more and of course we will be having the worlds biggest Car boot sale soon! ( yeahh cant wait!)

 

Every little helps!

 

 

 

No, just a regular unsecured loan. It was a 'January Sales' offer though, finished on 31st January. Sorry!

 

 

DAMM!! lol

[bottle]

Hi Knotty

 

I am in no way an 'expert', who is, but I would advise suggest against 'equity release' mortgage, you may be to young any way.

 

A 'second' mortgage may enable you to get a lower interest rate than a 'personal loan' but there is the problem of the sitting tenant.

 

Do not use credit cards for boat buying though I doubt (unless you are highly paid) you could get a 'credit rating' to cover a £40,000 limit.

 

The suggestions already given are good, do explore all options, I am sure you will.

 

Now just to prove how good my advice is, I am selling my house and getting out of the property market to liveaboard but I have a pension (early retirement) and my daughter has moved out. The equity from the house will be 'invested' to pay the running cost of the boat.

 

Some on here have advised against getting out of the 'market' and I probably agree (don't tell them), but we cannot afford to stay in and live on the boat, so we maybe mad and it could all go wrong.

 

We just have to do it.

 

Good luck

 

ps I don't think I have welcomed you and your family so, welcome and enjoy.

[Knotty]

Hi Knotty

 

I am in no way an 'expert', who is, but I would advise suggest against 'equity release' mortgage, you may be to young any way.

 

A 'second' mortgage may enable you to get a lower interest rate than a 'personal loan' but there is the problem of the sitting tenant.

 

Do not use credit cards for boat buying though I doubt (unless you are highly paid) you could get a 'credit rating' to cover a £40,000 limit.

 

The suggestions already given are good, do explore all options, I am sure you will.

 

Now just to prove how good my advice is, I am selling my house and getting out of the property market to liveaboard but I have a pension (early retirement) and my daughter has moved out. The equity from the house will be 'invested' to pay the running cost of the boat.

 

Some on here have advised against getting out of the 'market' and I probably agree (don't tell them), but we cannot afford to stay in and live on the boat, so we maybe mad and it could all go wrong.

 

We just have to do it.

 

Good luck

 

ps I don't think I have welcomed you and your family so, welcome and enjoy.

 

Hi thanks for the advice greatly appreciated..

 

I have put some feelers out on the martin lewis website to.

 

 

We now understand about what an equity release scheme is!! Thanks for all your guidence

 

If it was up to me ( lenny!) I would sell the house and say goodbye to the lot of it...But well my other half is a bit more cautious and says its his nest egg.

 

We have about 120k equity in the house after our last valuation, and a £50k mortgage, with 14 years left on it. presently covered by tenants. We recently changed the mortgage to a letting mortgage to, so were hoping the natwest who were very helpful in first quest to lower mortgage and change circumstances with it...will be nice to us again..but you can never tell with banks!!

 

I am getting the general picture to not fly into the bank blarting out about living on a canal boat!!

 

I have done some test quotes on the martin website and there are some good deals out there which are coming out for alot less then we thought loan wise.... so thats a good back up it seems if the bank decide to be ' computer says naaaaa'

 

 

I am getting impatient!! I knew I shouldnt of viewed those boats last weekend!! I fell in love with one within budget.

 

I'm keeping fingers tightly crossed... if bank says yes we can put the deposit down !!

 

oh its exciting!!

[anhar]

Hello Knotty

 

Here's another great independent financial site, the rather oddly named Motley Fool.

 

http://www.fool.co.uk

 

Apart from all the information on their front pages about choosing finanancial products like loans, credit cards, mortgages, savings, investments etc., their message boards are superb and there is such a huge range that you can find one for almost any topic, both financial and non financial.

 

For example here's the group of boards that deals with mortgages and the like. Ask any question on the relevant board, such as the one you've posed about boat funding, and you are very likely to get a range of intelligent answers from other readers who know their stuff.

 

http://boards.fool.co.uk/Boards.asp?fid=5008

 

I'm not sure if you have to register or not but it's free and almost everyone who discovers the Fool finds it rewarding in some way. Highly recommended.

 

regards

Steve

[bottle]

I am getting impatient!! I knew I shouldnt of viewed those boats last weekend!! I fell in love with one within budget.

 

Hi Lenny

 

A dangerous thing to do, especially with a boat, you must be guided by your head, just another little bit of 'advice' get the boat surveyed, not cheap but may save you thousands.

 

If nothing else it will give you a lever for bargaining, do not pay the asking price, boats are like houses in that way.

[Knotty]

Hi Lenny

 

A dangerous thing to do, especially with a boat, you must be guided by your head, just another little bit of 'advice' get the boat surveyed, not cheap but may save you thousands.

 

If nothing else it will give you a lever for bargaining, do not pay the asking price, boats are like houses in that way.

 

Yes a survey will be done regardless, of any prospective purchase that we make, more so definatley as I have reading some horror stories on here!! Especially as this will be our home, with our daughter on and a long lived dream. Found some great info on site

 

Bottle,...........I know I know...slap my wrist with a rubber cagool !! Thou must not fall in love ( well until survey reports arrives!!)

 

Thanks again

 

Lenny xx

[tomsk]

Yes a survey will be done regardless, of any prospective purchase that we make, more so definatley as I have reading some horror stories on here!! Especially as this will be our home, with our daughter on and a long lived dream. Found some great info on site

 

Bottle,...........I know I know...slap my wrist with a rubber cagool !! Thou must not fall in love ( well until survey reports arrives!!)

 

Thanks again

 

Lenny xx

 

 

I prefer the expression, 'Well whack me round the back of the head with a damp copy of last weeks Sporting Life'

Edited February 5, 2007 by tomsk

[charles123]

Hi Knotty

 

I am in no way an 'expert', who is, but I would advise suggest against 'equity release' mortgage, you may be to young any way.

 

A 'second' mortgage may enable you to get a lower interest rate than a 'personal loan' but there is the problem of the sitting tenant.

 

Do not use credit cards for boat buying though I doubt (unless you are highly paid) you could get a 'credit rating' to cover a £40,000 limit.

 

The suggestions already given are good, do explore all options, I am sure you will.

 

Now just to prove how good my advice is, I am selling my house and getting out of the property market to liveaboard but I have a pension (early retirement) and my daughter has moved out. The equity from the house will be 'invested' to pay the running cost of the boat.

 

Some on here have advised against getting out of the 'market' and I probably agree (don't tell them), but we cannot afford to stay in and live on the boat, so we maybe mad and it could all go wrong.

 

We just have to do it.

 

Good luck

 

ps I don't think I have welcomed you and your family so, welcome and enjoy.

 

 

Knotty

 

Going on from what I noted earlier, you should be able to get a secured loan from your mortgage company and based on the amount of equity you have in the house the amount you need should not be a problem. Nor do they need to know the reason for the loan since they are lending it to you secured on the house, so buying a boat will not be a problem. The rate will be the banks variable SVA, standard variable rate a point or so higher than the bank of england rate and you can pay it off when ever you can, and there will be only a small admin fee to set it up and no lock ins etc

 

Charles

[Knotty]

Thanks v.much for your advice..Think what charles said and looking round seems the best option.

 

God you lot are a wealth of information

 

were not worthy!!

 

 

 

lenny xx

[beatnik]

We don't have a house, so needed an unsecured loan (as far as I'm aware they are max. £25k) for our sailaway.

 

Called one bank, said it was for a narrowboat and they said no immediately. (Like we were going to sail it off into the sunset or something....)

Called another bank, said it was for a car , and they gave it to us.

 

 

We went down the bank loan route because the rates were much much better than a marine mortgage.

 

And now that we have a big loan, we were suddenly able to get a ridiculous amount of credit on a new 0% for 12 months credit card (Halifax). I think we're officially labelled as 'credit suckers' on some sort of official register.

 

That's our debt story for what it's worth. We heartily recommend lying.

[Knotty]

We don't have a house, so needed an unsecured loan (as far as I'm aware they are max. £25k) for our sailaway.

 

Called one bank, said it was for a narrowboat and they said no immediately. (Like we were going to sail it off into the sunset or something....)

Called another bank, said it was for a car , and they gave it to us.

We went down the bank loan route because the rates were much much better than a marine mortgage.

 

And now that we have a big loan, we were suddenly able to get a ridiculous amount of credit on a new 0% for 12 months credit card (Halifax). I think we're officially labelled as 'credit suckers' on some sort of official register.

 

That's our debt story for what it's worth. We heartily recommend lying.

 

Well havent been on the boards for a while, Had some ups and downs! We have decided now to just sell the house, release the equity that way and just life a nice unmortgage un loan free lifestyle. I guess we are maybe jumping in head first, but we have thought long and hard about this, and have great advice on pro's and cons' from pro keep house liveaboards and pro sell the lot!

 

We have both decided it will be a nicer way to live, and also would have the option of wider cruising as we wont have to be tied to a big job to ensure a minimum income

 

well we are both nervous but more so excited!!

 

also the boat I like is still for sale!

[WJM]

Just a general observation - a steel boat is a significant asset (ie; holds a realisable value well) so as much as you can you should allow the boat itself to carry the burden of security. High street banks just love getting their grimy fingers on the deeds to your house - dont let them have it - insist the asset itself carries a reasonable amount of the security and only use a second mortgage for any amount you cannot secure on the boat.

 

And dont be too hung up on the cost of money - like many things in life, you get what you pay for - cheap money can came from a snatch happy lender who will kick you when you are down.

[Knotty]

Just a general observation - a steel boat is a significant asset (ie; holds a realisable value well) so as much as you can you should allow the boat itself to carry the burden of security. High street banks just love getting their grimy fingers on the deeds to your house - dont let them have it - insist the asset itself carries a reasonable amount of the security and only use a second mortgage for any amount you cannot secure on the boat.

 

And dont be too hung up on the cost of money - like many things in life, you get what you pay for - cheap money can came from a snatch happy lender who will kick you when you are down.

 

exactly hence why we are now selling up! at the end of the day we feel we are selling one asset, made of bricks ( on a main road!) to purchase a steel asset ( on a peaceful canal)

 

I guess it was just getting over the selling of the house..but now we can look forward..up our budget a little to find a nicer boat...and hopefully soon have our dream!

[sharma]

exactly hence why we are now selling up! at the end of the day we feel we are selling one asset, made of bricks ( on a main road!) to purchase a steel asset ( on a peaceful canal)

 

I guess it was just getting over the selling of the house..but now we can look forward..up our budget a little to find a nicer boat...and hopefully soon have our dream!

 

Good for you. We're in the same situation as you were but still wondering which way to go. Sell up or rent our house out.

Well done for being so decisive and good luck

[Knotty]

Good for you. We're in the same situation as you were but still wondering which way to go. Sell up or rent our house out.

Well done for being so decisive and good luck

 

well its taken a bit of umming and arrring..my other half is ALOT more cautious than me, and I guess that hes been the one holding back ...but on the reverse hes great as I'm useless!

[WJM]

"exactly hence why we are now selling up! at the end of the day we feel we are selling one asset, made of bricks ( on a main road!) to purchase a steel asset"

 

 

BIG BIG BIG difference - a house and a boat are both assets BUT! - a house is an appreciating asset, a boat is a depreciating one.

 

Buying a boat can never be equaled to buying a house, your house can be your pension, your medical insurance fall back, your retirement cruise, your bequest - a boat really will only ever be (at best) a sort of break even bit of fun!

 

Financially, you would be better to rent your house out and have fun in your boat (or downsize your house for a smaller rental property if you need to release capital and/or make the numbers stack up for you)