So as you will of seen from our previous post “You’ll know your narrowboat when you get on her” we feel like we have found our girl. Much like the Marina we are looking to moor in whilst we are still in the process stages we don’t want to name any names and jinx the purchase process (Superstitious much?). But we thought it might be handy for anyone out there in the same position as us to talk through boat finance!
*DISCLAIMER* I promise not to be as maths orientated as in James’ Cost of a narrowboat post so you can all read easy!
So the boats we have been interested in and are hoping to purchase are around about the £45,000 mark, which whilst nothing compared to the average cost of a one bedroom flat in the UK, is still a fair chunk of money for two twenty somethings to amass! Whilst we have a healthy deposit we do still need to finance a portion of the boat.
This is mainly to allow us to make the cosmetic changes we want in the interior, but also to allow us to comfortably pay for mooring, licenses and surveys, the cost and details of which we will cover in a later blog post.
Which left us with one option really … Finance! To begin with we took the natural step of looking to our banks in the form of personal loans, I mean they know us best so financing should be a breeze right? Wrong! Whilst our banks were willing to provide a personal loan, the rate at which we were offered these was bordering on extortion (OK slight exaggeration) but still at over 15% APR the living narrow dream was starting to look less achievable!
We want to be able to live and enjoy ourselves during this time, whilst we are doing something slightly unconventional for people our age; as our friends buy their postage stamp magnolia boxes on toy town roads, we are looking at buying an incredible lifestyle home! For that reason the finance needs to be spot on, and allow us to continue to enjoy the lifestyle we currently have, with meals out, James’ racing and Kirsty’s clothes habit (Although space may impact the latter!) we want a finance option which is attainable.
So as anyone would expect we got surfing the web to look at options, and there are an increasing number of boat financiers out there. In the end the Brokerage from which we are hoping to buy our narrowboat gave us a list of their recommended finance options. Now I know a few people may raise an eyebrow at this, and honestly so did I. I am always wary of a company who ties to another, particularly on purchases as large as this, however the benefits also have to be looked at. By using a company recommended by the brokerage there is a pre-existing relationship, expectation and way of working together, which hopefully will pay dividends through the purchasing process.
The process itself was fairly simple, the biggest task being digging out all the resources you need to provide to prove you are who you claim to be. Once this was submitted it was a painful 36 hour wait for the answer.
What were we expecting to pay? Well as I say our banks had eyewateringly come in over 15% APR which prompted us to investigate these other options, so we were hoping for something lower! As mentioned following this I did take to the web to have a look at other potential providers, after short phonecall conversations they were coming in around the 12-13% mark, which although small is an improvement none the less!
I’m going to get serious for a moment here and recommend that anyone looking for finance of this nature always asks potential providers to carry out a soft eligibility test on you, there is a great blog post on it here if you want to read more, but simply a check on your account does put a short term mark on your credit history which can affect the rates other providers quote you in the short term!
So what did we end up with? We have been quoted a 10% APR which we are much happier with, and whilst it does of course impact the payments it is at a manageable rate, which we can offset (in our minds at least) against the asset we hope to be buying.
Well there you have it, our experience of Boat finance to date, and hopefully (as promised) not quite as dry as James’ lesson on narrowboat maths! 🙂
We will of course keep you posted with the developments on this.
Kirsty & James