Boat-Living Guide > Financial Factors
In our last post, we discussed all the important facts you need to consider before making a boat your full-time home. If you’ve done your research and you’ve decided this lifestyle is the one you want, your next step will be to purchase a house boat. While you can still reap the benefits of home ownership on a house boat, the purchasing and financing aspects are more intricate than purchasing a traditional land-built home. In this article, we’re going to dive deeper into the house boat buying process. Most importantly, protect your new investment with a Boat Insurance policy.
Acquiring a loan.
First and foremost, you’ll need to finance your houseboat. Unless you have enough cash to pay for the boat upfront, you’ll need to navigate these financing options.
According to Realtor, securing financing for a houseboat depends on the type of home you plan to buy. A houseboat is essentially a vessel that moves; it is usually financed with a recreational vehicle (RV) loan. Another option is a floating-home loan, which is like a house loan for a stationary structure that cannot propel itself.
Houseboat financing is available through marine lenders, and houseboats are appraised on a case-by-case basis. The current standard loan terms for houseboats are 20-year amortization (the time it takes for your loan’s principal amount to decrease) or 30-year amortization with a 10-year cash-out (wherein you refinance your mortgage for a higher amount than you currently owe, allowing you to pocket the difference.
You’ll be expected to put down more money on a house boat than a traditional home. In fact, the down payment ranges from 20-35%. In addition, you’ll need to factor in a higher interest rate, ranging from 1-3% more than homes on land.
Similar to a home inspection, you’ll need to get a houseboat inspection by a marine surveyor. This is a comprehensive evaluation of the boat and its safety components to determine value. Use a reputable surveyor who can provide an accurate cost estimate to ensure smooth financing and insurance options.
You’ll need to budget for some purchasing costs during the process. Account for sales tax and docking/slip fees when you buy your boat.
Finally, you can qualify for tax breaks on your houseboat. If it’s your primary residence, you can write off your interest paid on the boat on your income tax filing.
About Mariners General Insurance Group
Mariners General Insurance Group was founded in 1959 to protect boat owners and marine business clients. We are marine insurance experts, and insure boats worldwide – in every ocean on the planet. Marine insurance is critical if you own a boat or nautical business. Trust the professionals with all of your Boat Insurance needs – trust Mariners Insurance. Call us at (800) 992-4443 any time you have questions or concerns about insurance for your vessel or marine business.