How does boat financing work?
This section comes before the sections on actually finding a boat for a reason: it’s best to have financing lined up before you begin looking for a boat. It generally takes a couple of weeks to pull required material together and for the loan company to process. This delay could cost you the boat if you’re in a competitive situation with someone who is pre-approved. Also, a pre-approved buyer is in a stronger negotiating position with the seller than a non-pre-approved buyer. And finally, there’s no point in looking at $250k boats if the maximum you’ll be able to afford is $100k! There are many ways to pay for a boat: cash, a home equity loan, margin loan against stock, etc. However, the majority of buyers seek a loan from a marine financing company, using the boat itself as collateral. This allows you to keep cash productively invested elsewhere; in addition, it’s often possible to deduct interest expense on the boat loan. Note that the same tax advantages may not be applicable to a h
