FlyingMonkey Posted June 4, 2013 Report Share Posted June 4, 2013 I'm looking to buy a used CTSW, and will probably want to borrow approximately $35K. I'm planning to pay that off quickly (3-5 years), but I'd like to get as long a loan term as possible to give myself flexibility since this is my first aircraft purchase and I don't yet know all the gotchas and hidden expenses. I'll just make extra/larger payments to knock it out when I'm comfortable with the debt load. Can anybody recommend a lender they like for this? Thanks! Link to comment Share on other sites More sharing options...
Ed Cesnalis Posted June 4, 2013 Report Share Posted June 4, 2013 What made you decide on a CTSW? What was your 2nd choice? Link to comment Share on other sites More sharing options...
paul m Posted June 4, 2013 Report Share Posted June 4, 2013 Maybe he likes stiff stabilator trim wheels. Link to comment Share on other sites More sharing options...
FlyingMonkey Posted June 4, 2013 Author Report Share Posted June 4, 2013 I really don't have a second choice, I've been wanting a CT for a long while. If I had a second, it would probably be a high wing Tecnam. Yes Paul, the stiffness of the trim wheel is what really sold it. Link to comment Share on other sites More sharing options...
paul m Posted June 4, 2013 Report Share Posted June 4, 2013 I think AOPA just announced a new financing company initiative, Andy. You may want to look into that. Link to comment Share on other sites More sharing options...
FlyingMonkey Posted June 4, 2013 Author Report Share Posted June 4, 2013 I'll look into it, thanks Paul! Link to comment Share on other sites More sharing options...
FlyingMonkey Posted June 4, 2013 Author Report Share Posted June 4, 2013 My wife wants me to get a Highlander. Link to comment Share on other sites More sharing options...
Roger Lee Posted June 4, 2013 Report Share Posted June 4, 2013 Hi Andy, Sorry to hear that. :huh: Tell her to come talk with us here on the forum or better yet come to Page, AZ in Oct. before you buy. I think there is a good reason FD is #1 in the US by leaps and bounds from others. Link to comment Share on other sites More sharing options...
josjonkers Posted June 4, 2013 Report Share Posted June 4, 2013 My wife wants me to get a Highlander. Didn't know you could fly a Highlander? :) Link to comment Share on other sites More sharing options...
Doug G. Posted June 4, 2013 Report Share Posted June 4, 2013 A partial mortgage, if you have that option, can be pretty cheap. You need to be able to be certain you can cover it if there is an issue - no reason to lose your house to have a plane. A paid off house and extremely good credit got an extremely good rate. I ended up using a mortgage because my investments pay more than I pay on the mortgage interest. It meant 1) I did not have to draw money from investments, 2) I didn't lose the income and pay the taxes on the increase, and 3) I get to deduct the mortgage interest on my taxes. Win/win in my case. Link to comment Share on other sites More sharing options...
mocfly Posted June 4, 2013 Report Share Posted June 4, 2013 Maybe he like the super old technology... Link to comment Share on other sites More sharing options...
FlyingMonkey Posted June 5, 2013 Author Report Share Posted June 5, 2013 I'm not getting a Highlander, it's just what my wife is in love with at the moment. Once she sees how fast and comfortable the CT is (and we make a flight from our home in GA to visit her mom in MI in 1/4 of the time it takes us to drive) I'm sure she'll love the CT even more. We have looked at using our home equity line to finance, and that has a lower interest rate and tax benefits compared to traditional loans. The downside obviously is the lien on the house. Making the payments should not be a problem either way, we have zero other debt at all and I have a good income from a job I've held for 14 years. I'm still investigating all options before making the leap. Link to comment Share on other sites More sharing options...
Ed Cesnalis Posted June 5, 2013 Report Share Posted June 5, 2013 This guy was awesome, don't know if he is still around Dan Garzelloni dan@milehighmoney.com Link to comment Share on other sites More sharing options...
S3flyer Posted June 5, 2013 Report Share Posted June 5, 2013 http://usaircraftfinance.com/index.htm Easy to work with, reasonable rates and are an insurance broker as well. Link to comment Share on other sites More sharing options...
FlyingMonkey Posted June 5, 2013 Author Report Share Posted June 5, 2013 Thanks CT and S3, I put feelers out to both of those companies. Link to comment Share on other sites More sharing options...
paul m Posted June 5, 2013 Report Share Posted June 5, 2013 Do aircraft loans not usually require a personal guarantee (i.e. are they usually recourse or non-recourse)? Link to comment Share on other sites More sharing options...
Ed Cesnalis Posted June 5, 2013 Report Share Posted June 5, 2013 Its like a car loan, they will lien the aircraft and require your guarantee. Link to comment Share on other sites More sharing options...
johngpilot Posted June 5, 2013 Report Share Posted June 5, 2013 Pryority One Bank in Tulsa knows CT's talk to Robert ( Bob) Guderian 918-825-2124 rguderian@firstPryority.com Link to comment Share on other sites More sharing options...
FlyingMonkey Posted June 5, 2013 Author Report Share Posted June 5, 2013 Its like a car loan, they will lien the aircraft and require your guarantee. Meaning they will repo the airplane if you don't pay them, correct? That is my understanding, just like a car loan. I'm not sure what "require your guarantee" means. Link to comment Share on other sites More sharing options...
Ed Cesnalis Posted June 5, 2013 Report Share Posted June 5, 2013 After the repossession, application of fees and liquidation you would owe the bank or IRS additional monies depending if the debt is recourse or non-recourse. Aircraft values are declining and banks likely want to protect their positions, shop around and see. Link to comment Share on other sites More sharing options...
paul m Posted June 5, 2013 Report Share Posted June 5, 2013 After the repossession, application of fees and liquidation you would owe the bank or IRS additional monies depending if the debt is recourse or non-recourse. Why the IRS? Link to comment Share on other sites More sharing options...
Ed Cesnalis Posted June 5, 2013 Report Share Posted June 5, 2013 Example: You borrow $100k and the bank repossesses and sells the plane for $90k leaving you owing the bank $10k. If the $10k is forgiven then it would be taxable income. Link to comment Share on other sites More sharing options...
Rich Posted June 6, 2013 Report Share Posted June 6, 2013 Andy, I found that refinancing our mortgage to cover the cost of the plane worked well for us. The interest rate was 3.75%, which was approx 3% Less than going through an aircraft finance company.. Also, it allowed us to refinance at a lower rate. We took the 30 year mortgage, which made the monthly payment very reasonable, yet gave us the option to pay down the principal when extra cash becomes available. Rich Link to comment Share on other sites More sharing options...
FastEddieB Posted June 6, 2013 Report Share Posted June 6, 2013 1) I bought my Cirrus in 2003, partially through a home equity loan. A good way to go if you're confident in your ability to make the payments going forward - losing your house to own a plane would kinda suck. 2) I was recently contacted by Quickenloans about a refi on our current mortgage. Long story short, went from 4.75% to 3.99%, saving about $70/month. Owe a tiny bit more due to closing costs, but will save a bundle going forward. 3) On every prior mortgage, I would regularly make add'l principal payments to shorten the term. In today's environment, I don't think that makes sense. I think extra funds could be better invested in a dividend paying utility stock or stock fund or equivalent. Over time, I think you'd come out WAY ahead, even at today's modest inflation rates. Keep your interest deduction, and watch your funds grow at a rate higher than your mortgage interest rate. If we ever do face runaway inflation, debtors end up the big winners, paying off their debts in much smaller dollars. Link to comment Share on other sites More sharing options...
FlyingMonkey Posted June 6, 2013 Author Report Share Posted June 6, 2013 Thanks guys. I'm confident about the payments, especially on a long term loan. I'm investigating all these options currently. Link to comment Share on other sites More sharing options...
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