I have my house paid off and wondered if I could get a home equity loan at a lower rate and use that to buy a boat?
I have my house paid off and wondered if I could get a home equity loan at a lower rate and use that to buy a boat?
I did this back in 05. My thoughts were that my payment would be so low that I would hustle up and make extra payments when I wanted. My payment was so low I ended up spending money on other things. I would only do it if you plan on keeping it around for awhile.
This is one of those tough questions. One thing to consider is time and closing costs. Generally a home equity loan takes time and there are often closing costs including appraisals that increase the cost. If credit is OK, boat loans are not all that bad. With strong credit you should be able to get something in the low 5% area DEPENDING ON SEVERAL THINGS. Always need to add that because not everyone qualifies for the "best" rates.
The other thing we see sometimes is people will sell the boat in a few years and have a hand full of money. It might not always get applied to the equity loan. Now the boat is gone and the loan is still there.
Let us know if we can help.
Thank you,
Ken
Thanks for the answers. I have excellent credit so that's not a problem, I thought maybe I could write off the interest on my taxes with a home loan.
You could write off the interest on a home loan. Technically, that would be a 1st Mortgage since your home is free and clear.
I prefer to let my assets stand on their own--not using more collateral than absolutely necessary. I also prefer to keep my lending at a different place where I keep any substantial checking/savings accounts--to avoid cross collateralization.
If you have integrity, nothing else matters. If you don't have integrity,
nothing else matters.
Thanks guys, I'll check with my accountant that does my taxes.
that's how I do mine. as has been said you have to be disciplined to make the payment and use the money wisely. also the rate is usually variable.