Owning Your Boat and Landing Your Home Loan: A Guide for Aussie Fishers

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For many Aussie fishers, their boat isn’t just a recreational vessel, it’s their livelihood. But when it comes time to apply for a home loan, the question of boat ownership and financing can be a murky one. Will your boat be seen as a valuable asset or a drag on your application? Here’s what you need to know to navigate these waters smoothly.

The Deal with Boats and Home Loans

The good news is that owning a boat can actually be considered an asset by lenders, which can strengthen your home loan application. However, there are some key factors that influence how much weight it carries:

• Boat Value: The higher the value of your boat, the more it contributes to your overall assets. But remember, lenders will likely factor in the loan amount outstanding on the boat (if any).
• Loan Status: If your boat is financed, the outstanding loan balance will be counted as a debt. This can reduce your borrowing power for the home loan.
• Loan-to-Value Ratio (LVR): This ratio compares your loan amount to the value of your home. A lower LVR (more equity in your home) is favourable to lenders. So, a high boat loan balance can push your LVR up and potentially restrict your borrowing capacity for the home loan.

Setting Sail for Success

Here are some tips to ensure your boat ownership helps, not hinders, your home loan journey:

• Reduce your boat loan balance: Paying down a portion of your boat loan can significantly improve your debt-to-asset ratio.
• Consider a smaller, less financed boat: If you’re in the market for a new vessel, factor in affordability and aim for a boat that won’t require a hefty loan.
• Be upfront with your lender: Provide clear information about your boat ownership and financing during your application.

Beyond the Bottom Line

Remember, a responsible approach to boat ownership goes a long way. Regular maintenance and keeping your registration and insurance current demonstrate to lenders that you’re a financially responsible borrower.

Casting a Wider Net

For specific details and personalized advice, consult a qualified mortgage broker who specializes in understanding the unique needs of fishers. They can help you navigate the complexities of boat ownership and home loan applications, ensuring you achieve smooth sailing on both fronts.

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