Question Regarding loans

TimC said:
Wow I didn't realize a simple loan question could stir the pot around here so easily.

Woody- It was a question about a boat loan not financial advice I was looking for. You shouldn't take shots at people that are simply trying to answer questions that others ask. I appreciate it but I think I would go to a more qualified person than a boating forum for real financial advice.

I appreciate everybody's concern about what I do with my money (boats depreciate, buy a house etc.) but if I needed somebody to tell me what to do with my money I would have gotten married.

Since I'm still in control of my wallet, love boating, have a very demanding job that I don't think about when I'm at the lake. It may be totally irresponsible but I think I'm still going for the boat!
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Hey now, you can have fun boating and still be responsible. How about considering a smaller boat or better yet, get a friend with a boat!
 
Hampton said:
We deducted the interest on our 250 for 6 years at which time I paid the rest off. We now deduct the interest on our 340. It is like only paying 75% of the loan amount, except of course, that I double the principal payment. Each month, I pay the loan amount, and in a separate and distinctly marked payment, I pay a chunk of cash to knock off the principal. That payment will have to increase, as the loan amoritization shows, the amount going to principal each month increases as the amount going to interest each month decreases. To keep up, I have to increase my extra principal payment so my boat will be paid off in 1/2 of the loan time.

The reason interest goes down and principal goes up is that the amount of interest is determined by: Interest rate divided by 365 gives daily interest rate. Amount still owed times the number of days between payments times the interest per day = the amount of interest owed that period (month). The amount of interest subtracted from the agreed-to payment amount is the amount paid to the principal (principal is the amount you are currently borrowing). As the loan ages out, you owe less, so the interest paid goes down and the principal paid goes up.

http://www.bankrate.com/brm/popcalc...=0&txtloanAmount=300,001.00&productList=1_f_5

The table is based on the payment being received in exact monthly increments - the actual loan will be calculated based on the formula above. If a payment gets there 3 days early, the amount of interest paid goes down and the amount of principal paid that month goes up.

Clark Howard tells people who have credit card debt to pay 1/2 of the payment 2 weeks early, and the other 1/2 on time. You will pay off your debt in 1/2 of the time.

You may be able to write off your boat even if you do not own a house. Seek professional advice. Follow the law. Take advantage of the law as it is written. Don't feel guilty, just follow the rules. Many people live in Florida 185 days a year, and in Michigan (or other northern state) for 180 days. That way, they can claim Fl as their primary residence and be subject to Fl income tax (zero). It is the law.
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I do this as well for the exact same reason. The extra payment goes to pay off the principal thus the interest paid over time will decrease. I hate seeing my monthly payment mostly pay the interest so I feel like I'm gaining ground when I make the extra payment strictly to the principle.
 
papertrail290AJ said:
Hey now, you can have fun boating and still be responsible. How about considering a smaller boat or better yet, get a friend with a boat!
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If he's single, he has a good chance of getting a friend with a boat, if you get my drift (using a boat to attract a new friend, and I don't mean a fish - but a mermaid may not be out of the question).
 
papertrail290AJ said:
Hey now, you can have fun boating and still be responsible. How about considering a smaller boat or better yet, get a friend with a boat!
Click to expand...

Haha I AM the friend with the boat! If I'm going to move up I want to move UP. If it's something that seems unaffordable I'll stay with my current boat. I have a great time with it but it is fun to see what you can possibly move up to especially with the deals currently out there. I would love to be able to get this done by summer or mid-summer but being more realistic I think I'm a year away. Who knows but I don't make decisions without a lot of thought and I'm not afraid to walk away and stay in my current situation.

I appreciate everybody's contributions to this thread.
 
If you want a really nice depreciating asset, put your money in the stock market. It's going down faster than my boat value.
 
yeah Gary, but look at all the money you're going to get for free.

With this downward spiral, I see a big boat in my future very soon.

Sometimes sanity is more important than assets. Although I can say i've lost more sleep owning a boat than owning an apt.
 
Sanity IS more important than assets.

- - - - - - - -

And yeah. . .maybe I should buy a 380DA while I still have the money to do so. And who knows what happens if inflation kicks in. That boat could go up 15% in price, while my assets drop 30%.

Let's hope we are not heading back to the 1970's, where the markets were flat for 14 years and inflation was through the roof. I am sure my salery will keep up with inflation, right?

So, the only downside to buying a 380DA this year could be that fuel will cost $7/Gallon next year, and my mechanic rate could go up to $250/hr. And I will get a 4% raise (because the "official" inflation will be 4% at most -> you believe the government numbers, don't you?)

- - - - - - -

Actually, I am not all doom and gloom. The equity and housing markets have been fantastic in the last several years. A 20-30% readjustment is probably both inevitable and necessary. My retirement projections from 2002 will continue to hold up nicely. As long as the government doesn't do something totally stupid to completely destabilize the economy.
 
comsnark said:
Sanity IS more important than assets.

As long as the government doesn't do something totally stupid to completely destabilize the economy.
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Yeah, like throwing money at the non-investing, non-hiring crowd, or cutting interest rates to spurn another round of buying over your capability to further grow and stretch the bubble thinner and thinner and thinner to set us up for a really big explosion under the next administration? (And this, from a conservative (me)).
 
Gosh all this negative talk has got me thinking of going down to the lake with some gas and a lighter and burning that S.O.B!!!!

Call the insurance company I think my boat was just stolen and burned!!!

just kidding (if there are any fraud investigators on the forum)
 
Don't worry, when Hillary becomes President we'll have nothing to worry about. we'll have free health care, we'll talk to the terrorists to find out why they don't like us and after we correct those things all will be good, if our kids do poorly in school then they'll pay them $8/hour to get a C average, we'll get paid to loose weight, if we strive to make less money a year then they'll write checks to us and our non tax paying kids, we'll all be driving hydrogen cars which will cost nothing in fuel. think of all this money that can then go to boating.
 
Not to turn this too political. . .but Hillary is liberal like George is a conservative.
Either way. . .watch your wallet! They are going after it!

Which brings up an important point about financing boats: Don't make overly optimistic assumptions regarding the economy. This is what has caused the housing bubble to burst -> the basic incorrect assumption that housing values *always* go up. And you *always* have a job. Like I stated above. . boats are toys. They make the same economic sense as all other toys!
 
I have used Suntrust bank many times. They have a marine lending department, It is located in Annapolis MD. , but it can all be done by fax. They are very easy to deal with.
 
Back to the discussion about getting the boat loan.

1. Don't make your purchase decision based on the tax law. Taxes will change as politics do.

2. Financial advice is personal to everyone's situation; what applies to one will not necessarily work for another. Any lender will make the loan if there is enough money in it for them. Charge high enough an interest rate and it will overtake the default risk every time. Just get something you know you can afford and then try to pay it off early.

3. Don't engage in "credit thrashing". When applying for the loan pick a reputable broker like Essex and stick with them. Every time you go to a different lender and they pull your credit report, it will drive your score down. Multiple pulls of your report for the same kind of loan will make it look like you are getting turned down over and over even if you are only shopping for the best rate.
 
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