Many new first time boat buyers are rather displeased at the rates they are quoted for a new boat purchase considering they have very good credit and the boat is brand new.  Don’t expect a 0.0% for 72 months like Detroit is willing to offer, because it won’t happen. 

One smart move is to use a HELOC or home equity line of credit.  The home equity you have in either your primary home or Lake home or condo is sitting unused and most people have more equity in their primary residence, but don’t be so sure that your lake property isn’t a good place to look for some additional money.   The best part ofusing a HELOC is that you will most likely be able to deduct the interest because the debt is secured by your home.

The lowest possible rate you can get might be from doing a "cash out refi" on a property and using it to purchase the boat.  You’ll pay for it as long as you have the loan, but it is a lower rate than most other options.  What’s the difference in the two loans?  First, a home equity loan is a separate loan on top of your first mortgage; a cash-out refi is a replacement of your first mortgage. Second, the interest rate on a cash-out refinancing is usually, but not always, lower than the interest rate on a home equity loan.  You do have to pay closing costs on a cash out refi, which is basically buying your house all over again. 

Talk to your CPA about these decisions.  If you have any questions about Lake boating or buying or selling Lake of the Ozarks real estate, you can always contact John Garrett at 573-302-2320 or e-mail me for a fast response. 

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