Seattle Floating Homes and Houseboats Guide - Part 4 - Financing

Seattle Floating Homes and Seattle Houseboats - Part 4 - Financing

Let's reiterate again - Houseboats and Floating Homes are different. Financing is one of the biggest differences. Floating homes can be financed with regular 30 yr mortgages, traditional interest rates, and pay regular property taxes. Insurance is a bit more expensive than a traditional home.
Financing a houseboat (vessel), on the other hand, is nothing like financing a regular home. There are quite a few differences, the most important being:
Down Payment - Forget your No-Money-Down purchases. Most lenders will require 25%-30% as a down payment. These numbers change over time and with different lenders, but you must have a sizable down payment. The least expensive Seattle houseboat right now is about $60,000. That would still probably require $15,000 down. Add to that...
Sales Tax - In most cases, houseboats are sold as personal property. These "recreational vehicles" will pay almost 10% in sales tax at closing. The buyer pays this tax. You'll also pay yearly licensing fees. This $60,000 houseboat now requires $15k down, $6k sales tax, plus closing costs. Most buyers should figure on needing about 40% of the houseboat's price available in cash to make the purchase.
Interest Rates - Rates will typically be at least 1 percentage point higher than comparable home mortgage rates, and sometimes 2-3% higher. A water-based house clearly has more potential for damage than a land-based house, and the lenders factor that risk into the rate. Only a few banks will finance these loans, so you must find a specialized lender.
Insurance - Insurance costs are higher for boats than they are for homes. A monthly policy for a house might be $80, while a monthly policy on a houseboat could be $200.
Still on board? It's better to know these issues up-front, and if you still feel like houseboat living is for you, let's move on.

Sam DeBord and Brian Wiegand
Seattle Real Estate Brokers
Seattle Waterfront Homes
SeattleHome.com (206) 552-8820