With the summer in full swing, there are many people out there who are deciding whether it's time to move up in the world of boating, keep an even keel or even refinance their current boat and use the money to help pay down other bills.
Let's debunk one of those issues right from the start. Never think of refinancing your current craft because, though you may be taking a chunk of cash out of the boat that you can use for other items paying bills is always a great incentive when it comes time for the first payment on the refinanced loan, are you going to be able to make it or are you going to suddenly find yourself on the receiving end of a series of collection calls because the interest is too high; your income just isn't a match for the refinance, you may have lost your job and you cannot afford even the new payments.
It's better to keep your payments the same and explore other options. Many people would certainly take a second or third line of credit on their houses, but given where the stock market is today and what is happening also in the credit market, that doesn't make much sense.
So, the best idea here, unless you plan to sell your boat and get out of boating altogether not a bad idea if you need money and can turn an asset into cash that can help you out of a hole or two then hold onto your boat. A time may come when you need the value you can pull out of a straight sale of your boat. Refinancing it just leaves you with another monthly payment that, while it may seem smaller at the start, will eventually lead to other problems further downstream when you find you might not be able to carry the nut of a house and car and boat. It's quite a trio of payments and, if your kids are in college, then you've got those expenses facing you too.
Don't be swayed by places like web sites which will tell you that hey now's a great time to refinance your boat because it really isn't.
If, on the other hand, you are making your first boat purchase then watching what the credit market is doing is probably your best first step. Indeed, with the markets in seeming freefall right now, this may not be the best of time to be getting into your first boat, unless you have a big down to give you a good bit of equity in the boat.
If you can put 25 or 30 percent into the purchase price of a boat not only will banks, credit unions and other financial institutions take you seriously, but you will have an easier time of obtaining more favorable term on your note. Indeed, you may find the loan committee of your local credit unit willing to advance you the money, even though the politicians with all of their posturing have made it nearly impossible to obtain loans at reasonable rates.
With the markets in freefall, right now, we may be facing a term some of us haven't heard in 30 or more years stagflation where the economy is stagnating while inflation is running rampant and with the way the politicians are handling things in Washington right now anything is possible.
So, maybe, unless you have a deal you can't pass up, it's a good time to wait and see exactly what the markets will be doing this week and next week before your commit to your first boat.
And, when you do commit to your first boat, make sure it's one you can afford. If possible, a great idea is a cash payment, though more than one credit person out there is probably pulling his hair out reading this.