Marine Mortgages

[Rob and Heather]

Hi,

 

Does anyone out there have any experiences / recommendations on financing a second-hand narrow boat; we’re tenants and can afford the normal 20% deposit . We just wondering if a tenant can secure a marine loan.

 

Many thanks,

 

Robert and Heather

[mayalld]

Hi,

 

Does anyone out there have any experiences / recommendations on financing a second-hand narrow boat; we're tenants and can afford the normal 20% deposit . We just wondering if a tenant can secure a marine loan.

 

Many thanks,

 

Robert and Heather

The mortgage is a chattel mortgage secured on the boat, not secured on the boat, so would be open to a tenant (and indeed to somebody who has no land based address)

 

I've just come out of a marine mortgage, because the variable interest rate has been creeping up (9.5%), and I managed to refinance onto an unsecured loan at 7.5% fixed.

 

There are two main suppliers of marine finance; Barclays Marine Finace, and RoyScot Larch. I dealt with RSL, and they were very professional at all times.

[Ray]

Have you tried your bank? We looked at marine finance when we were buying our sailaway. However, we were householders and managed a re-mortgage. Nonetheless, it might just be worth asking them to see if they're any cheaper.

 

Ray

[WJM]

it makes sense to me to secure the borrowing for your boat on the boat itself.

 

dont get too obsessed with finding the cheapest money - consider the whole picture - like everything else, you get what you pay for. Consider any details that might affect you. Securing on your house might make it difficult to sell your house, cheaper money can have tie-ins or penalties for early completion, which may or may nor have a bearing on your plans.

 

 

RSL in my experience are fine.

[mayalld]

it makes sense to me to secure the borrowing for your boat on the boat itself.

 

Unless you can get it without securing it on anything :-)

 

If you have a good credit rating, you can probably get an unsecured loan for up to 25k at a better rate

[arlow11]

have to say rsl is 9.4 - 9.9 apr barclays marine is 8.3 apr giving money away on intrest is insane,best to get a large loan 25 grand with tesco over 10 years is 6.7 apr 282 per month ...........

 

 

http://www.moneysupermarket.com/loans/

[tired old pirate]

The mortgage is a chattel mortgage secured on the boat, not secured on the boat, so would be open to a tenant (and indeed to somebody who has no land based address)

 

I've just come out of a marine mortgage, because the variable interest rate has been creeping up (9.5%), and I managed to refinance onto an unsecured loan at 7.5% fixed.

 

There are two main suppliers of marine finance; Barclays Marine Finace, and RoyScot Larch. I dealt with RSL, and they were very professional at all times.

 

Ooh thats a good idea, I'm with RSL and find the interest a bit scary, nice company tho. Is there a penalty for early repayment with RSL? how do they react when you pay them off?

[anhar]

Unless you can get it without securing it on anything :-)

 

If you have a good credit rating, you can probably get an unsecured loan for up to 25k at a better rate

I agree with the first sentence. The point about secured loans though is that, generally, where the borrower has a choice, the trade off is that a better rate will be obtained in return for the security. However some loans are available only on a secured basis so that the borrower has little choice anyway.

 

Marine loans are of course secured on the boat but as others have suggested it is well worth checking to establish whether an alternative loan might be available elsewhere at a better rate, secured or otherwise. The possible problem with a "marine" loan is that some naive borrowers may be persuaded by the description "marine" into thinking this is the only way to finance a boat purchase. It is not.

 

The best way of all to finance a boat is by cash, not moneylenders. Unless possession of a boat is essential, such as where it is the occupant's sole abode as a liveaboard, I wouldn't advocate borrowing money at all for what is then just a frivolous leisure pursuit.

 

regards

Steve

Edited June 25, 2007 by anhar

[mayalld]

Ooh thats a good idea, I'm with RSL and find the interest a bit scary, nice company tho. Is there a penalty for early repayment with RSL? how do they react when you pay them off?

 

They are absolutely fine.

 

If you are on the same system as I was (fixed monthly payment, variable rate, which meant that the term was increasing), then there is absolutely no penalty.

 

You just ask for a settlement figure, which will be the amount on your last monthly statement, plus the interest to the next monthly statement, to be paid by the day prior to the next normal payment falling due.

 

Hence the only theoretical penalty is that you pay interest for the whole month no matter when in the month you pay it off.

[bottle]

I agree with the first sentence. SNIP>>>>>>>>>>>

 

The best way of all to finance a boat is by cash, not moneylenders. Unless possession of a boat is essential, such as where it is the occupant's sole abode as a liveaboard, I wouldn't advocate borrowing money at all for what is then just a frivolous leisure pursuit.

 

regards

Steve

 

I agree 100%, also do not just look at how much you can get and the repayments,

 

Look at the total repayable, you could end up paying three times or more, the amount borrowed.

[mayalld]

The best way of all to finance a boat is by cash, not moneylenders. Unless possession of a boat is essential, such as where it is the occupant's sole abode as a liveaboard, I wouldn't advocate borrowing money at all for what is then just a frivolous leisure pursuit.

 

Whilst I am, in general, very much of the "save up then buy it" school of thought (the car is not on finance), there does come a point where you have to say "If I wait until I've saved enough to pay cash, I'll probably be too old to enjoy it"

 

I'm fairly comfortable in that;

1) The finance on the boat is less than a third of the value of the boat

2) The interest rate is such that I'm not feeding the moneylenders too much (7.3% with 25% of the interest returned at the end of the loan)

 

In my particular case, assuming that I saved up what I'm currently paying to the bank each month, it would probably take me to the end of the current loan term to save enough to buy a boat like Mr Jinks, so it makes very good sense for me to finance part of the boat.

 

I agree 100%, also do not just look at how much you can get and the repayments,

 

Look at the total repayable, you could end up paying three times or more, the amount borrowed.

 

Only if you don't get a good deal!

 

I will be paying back about 25% more than I borrowed over an 8 year term.

 

That seems fair enough to me.

Edited June 25, 2007 by mayalld

[bottle]

Dave

 

It seems that you have it sussed and obviously checked on your total repayable, my warning was for those that are not so money wise.

 

It surprise me that so many people only look at the repayments and not what they will actually be paying back.

 

All of these adverts on the television frighten me as to the trouble people are getting themselves into.

 

I know it is difficult for some, especially those on low wages, but the only loan I have had is for the house (mortgage) and even with that I worked out what I could comfortably borrow/afford not what the building society was willing to lend.

 

My rule has been, If I cannot afford it, I do not buy it until I can.

 

I have been lucky in that my job was fairly well paid.

[WJM]

So far ignored is the reasonably important question of what your money provider will do if there is any kind of problem during the term. It could be argued that low price lenders will go in heavy, snatch your house, seek to bankrupt you etc. (so called unsecured lending) It could also be hoped that the better quality of lender will seek to rework the deal so you both walk away with a result. Its like anything in life, you should not simply buy on price; lending involves provision of much more than the actual cash. The argument could be that by paying a small bit more for your money you are buying security.

[tired old pirate]

They are absolutely fine.

 

If you are on the same system as I was (fixed monthly payment, variable rate, which meant that the term was increasing), then there is absolutely no penalty.

 

You just ask for a settlement figure, which will be the amount on your last monthly statement, plus the interest to the next monthly statement, to be paid by the day prior to the next normal payment falling due.

 

Hence the only theoretical penalty is that you pay interest for the whole month no matter when in the month you pay it off.

 

brilliant,thanks for that I will try and raise the cash!

[mayalld]

So far ignored is the reasonably important question of what your money provider will do if there is any kind of problem during the term. It could be argued that low price lenders will go in heavy, snatch your house, seek to bankrupt you etc. (so called unsecured lending) It could also be hoped that the better quality of lender will seek to rework the deal so you both walk away with a result. Its like anything in life, you should not simply buy on price; lending involves provision of much more than the actual cash. The argument could be that by paying a small bit more for your money you are buying security.

Very true.

 

My new loan is with the bank wot I have been with for over 20 years.

[Freetochat]

I think the use to which you will be putting the boat also needs to be considered. If you are providing just a leisure facility, then I would view payments/costs in a different way than if I was buying a livaboard. A livaboard can be compared more with land based rent or mortgage in costs terms. Whenever borrowing money, I always look at what I am prepared to pay for the benefit of the purchase. That being the case, for leisure, what am I prepared to pay for the holidays and time on board. This must be cheaper than hiring or the package holiday?

[Gary Peacock]

I think the use to which you will be putting the boat also needs to be considered. If you are providing just a leisure facility, then I would view payments/costs in a different way than if I was buying a livaboard. A livaboard can be compared more with land based rent or mortgage in costs terms. Whenever borrowing money, I always look at what I am prepared to pay for the benefit of the purchase. That being the case, for leisure, what am I prepared to pay for the holidays and time on board. This must be cheaper than hiring or the package holiday?

 

I think you have just summed up why the new build recreational narrowboat market is in the state it's in.

[Orphiel]

So far ignored is the reasonably important question of what your money provider will do if there is any kind of problem during the term. It could be argued that low price lenders will go in heavy, snatch your house, seek to bankrupt you etc. (so called unsecured lending) It could also be hoped that the better quality of lender will seek to rework the deal so you both walk away with a result. Its like anything in life, you should not simply buy on price; lending involves provision of much more than the actual cash. The argument could be that by paying a small bit more for your money you are buying security.

 

It could certainly be hoped, but working as a debt adviser tells me is not normally the case... 'So called' (curious about the so-called bit) unsecured creditors very rarely force anyone into bankruptcy, unless they're Revenue and Customs. The standard sanction for defaulting is county court action, which involves a court judgment, yes, but if you're a genuine 'can't pay' rather than a 'won't pay' the court will set the rate of repayment at an affordable level. If you then default on this, a creditor can apply for a charging order over your house, which is not an order to sell it. There are all kinds of safeguards in the court process, and it normally takes years of random threatening letters before any court action is taken in the first place. And if you don't own your own house, the creditors have very little to no recourse to get their money back. (That's a brief precis of why you should never become a moneylender!)

 

Whereas in all the cases I've seen of arrears on secured loans or mortgages, whether or not the bank knows you, you have been banking there for years, etc, they have gone straight in for possession proceedings, and you have a good chance of losing your home, or boat as the case may be.

 

It's comforting to think that reputable high street banks, with whom you have had many years of happy custom, will remember this and treat you right, but it is mostly not the case. When they stop getting your money, they do not care any more about you.

 

Obv this is not to argue there are not even worse 'sub-prime' lenders out there to screw you even more, but these actually tend to be ones with higher interest rates than normal.

 

Sorry, now all back to the actual discussion!

 

Meg

[WJM]

every reason to ring fence your boat and secure the borrowing on it - when you cant afford the boat anymore all you loose is the boat - which is the very thing you want to be shot of - clean, no mess!

[carlt]

every reason to ring fence your boat and secure the borrowing on it - when you cant afford the boat anymore all you loose is the boat - which is the very thing you want to be shot of - clean, no mess!

Unless it's your home.

 

Unless the repoman bungs it in an auction, recoups a fraction of what you owe and leaves you with a big debt still...and no boat.

 

If you can get an unsecured loan then you can sell the boat and, hopefully clear the debt, if it all goes belly up.