Have you ever considered living on your own yacht, or buying a second home, a getaway home on a hull? Many folks buy motorhomes as a second home and then they travel near and far. Owning a large yacht can be a similar strategy, albeit often more costly. You have to insure it, find a slip, and maintain it, and that’s not cheap. Even more serious, you have to buy it, and these larger luxury type yachts, well let’s just say they are not cheap. Okay, so let’s discuss all this shall we.
You see, having been in the boat detailing and cleaning business, I can tell you the maintenance once you buy it is yet a huge additional expense for your budget, akin to owning a mansion and paying some $10,000 per month for landscaping costs. Well, here I want to talk to you about the initial purchase.
Now then, there was an interesting piece in the Wall Street Journal on August 23, 2013 titled; “When Your House Buys a Boat – More Jumbo Loan Borrowers are Taking Home-Equity Lines of Credit to Finance Recreational Pursuits; Hello, Sports Car,” by Anya Martin. Turns out there has been a “40% increase in home-equity lending at Wells Fargo from the first quarter to the second quarter of 2013,” but as a marine sector analyst, I just wonder if this trend will continue, or if it hasn’t already found itself pulling back as Wells Fargo and other banks are raising rates on all loans.
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As the mortgage rates rise and they are rising as of the writing of this article back in Summer of 2013, the concept of taking out a second on your home now that you have some equity once again may not be in the cards in 2014 or 2015. Plus, the banks will raise interest rates on home-equity loans as well, even if wealthy home owners get sweetheart deals, the time to go with this strategy to acquire a luxury not is a window which is obviously closing, unless the real estate values rally through the next few years – anything is possible.
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