Financing An Aircraft
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Financing An Aircraft
While the search continues I'm considering the options in terms of type, hangarage and most importantly, budget.
At the cheapest end would be outright ownership of a single-seat homebuilt for a relatively small sum or a share in something better or borrow/spend more and buy something as sole owner or various permutations of the above or............you get the idea. What I was wondering though was how people (like me, who don't have the cash) finance their aircraft purchase when they want something outside the range of a 'normal' personal loan? Enquiries with the various lenders show that once you get above (say) £25,000 and/or 12 years they don't want to know. Clearly most of them can't think past used car loans.
That's probably just as well as the repayments on that sort of loan over 10 years would be pretty chunky so what's the next step up? A specific aviation loan or mortgage I suppose? Searching here revealed only one previous thread from 2003 so if anyone has any useful information I'm all ears. Or eyes. Or something.
At the cheapest end would be outright ownership of a single-seat homebuilt for a relatively small sum or a share in something better or borrow/spend more and buy something as sole owner or various permutations of the above or............you get the idea. What I was wondering though was how people (like me, who don't have the cash) finance their aircraft purchase when they want something outside the range of a 'normal' personal loan? Enquiries with the various lenders show that once you get above (say) £25,000 and/or 12 years they don't want to know. Clearly most of them can't think past used car loans.
That's probably just as well as the repayments on that sort of loan over 10 years would be pretty chunky so what's the next step up? A specific aviation loan or mortgage I suppose? Searching here revealed only one previous thread from 2003 so if anyone has any useful information I'm all ears. Or eyes. Or something.
Join Date: Jul 2003
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You could add it to your mortage, or sell a kidney?
In all seriousness though, have you truly weighed up the cost of hourly wet rates versus ownership? How many hours do you have to fly per annum to break even with hiring an aircraft for an hour? If you fly with a friend, it'll be alot!
In all seriousness though, have you truly weighed up the cost of hourly wet rates versus ownership? How many hours do you have to fly per annum to break even with hiring an aircraft for an hour? If you fly with a friend, it'll be alot!
Are you able to have a line of credit based on your house value? We have this (in the US) so any purchases using this facility become part of our mortgage at whatever our interest rate is ie low compared to personal loans and the like. A bonus is that home loan interest is a tax deduction!
Oh, and you can have what you pictured. Right click on the image, choose 'print' and voila! you can hang it up in the shed near the window so you can look at it while relaxing in the back yard. Probably best under a section of roof I did. Can't trust the quality of work of the other contractor...
Oh, and you can have what you pictured. Right click on the image, choose 'print' and voila! you can hang it up in the shed near the window so you can look at it while relaxing in the back yard. Probably best under a section of roof I did. Can't trust the quality of work of the other contractor...
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Eyoop Tinny.
My answer to your first question is that I don't know or 'probably' if you use the house to secure the loan which the long-haired general would never let me get away with. You've certainly got the best end of the GA deal over there. All those interesting 'Experimental' aircraft, that the CAA/LAA won't let us have here, for relative peanuts.
As for the shed there's a window needs fixing. You busy?
My answer to your first question is that I don't know or 'probably' if you use the house to secure the loan which the long-haired general would never let me get away with. You've certainly got the best end of the GA deal over there. All those interesting 'Experimental' aircraft, that the CAA/LAA won't let us have here, for relative peanuts.
As for the shed there's a window needs fixing. You busy?
Join Date: Jan 2008
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For what it's worth:-
In my experience by far the cheapest way to borrow money is to secure the loan on your house..... to most, this is a mortgage.
For some inexplicable reason, the greedy *ankers will use any excuse to hike their rates to usurious levels.
They lie--- the quoted interest bears no relationship to what you actually pay.....popular trick is to add the interest on the WHOLE amount,over the WHOLE term...."admin" charges, "setup" fees.....
last property i bought was a shop with living accom. over, which had a separate access. no mortgage, not even on the domestic part, but yessir, you can have a business loan at twice the mortgage rate.
Borrow against your house (remortgage often gets a better interest -rate, especially at the moment) but be prudent....IMHO you court disaster if your total borrowings have repayments exceeding 25% of your total income.
make sure you have a cash "cushion" in place, should you suffer illness/accident/redundancy.
providing you've done the long-term planning and risk-assessment and factored-in the future rise in interest-rates, it's safer to borrow this way, simply because a lot less of your income goes to interest and therefore equity builds quicker.
Many car -buyers have found that a 5-year loan doubles the cost of the car and by the time it's paid for, it's cream-crackered and barely makes a deposit for it's replacement.
Also give due consideration to the old saw...."if it flies, floats or f**ks, rent it!....sounds like hard won advice.
Have the tee shirt for the last two
... can confirm the wisdom!
In my experience by far the cheapest way to borrow money is to secure the loan on your house..... to most, this is a mortgage.
For some inexplicable reason, the greedy *ankers will use any excuse to hike their rates to usurious levels.
They lie--- the quoted interest bears no relationship to what you actually pay.....popular trick is to add the interest on the WHOLE amount,over the WHOLE term...."admin" charges, "setup" fees.....
last property i bought was a shop with living accom. over, which had a separate access. no mortgage, not even on the domestic part, but yessir, you can have a business loan at twice the mortgage rate.
Borrow against your house (remortgage often gets a better interest -rate, especially at the moment) but be prudent....IMHO you court disaster if your total borrowings have repayments exceeding 25% of your total income.
make sure you have a cash "cushion" in place, should you suffer illness/accident/redundancy.
providing you've done the long-term planning and risk-assessment and factored-in the future rise in interest-rates, it's safer to borrow this way, simply because a lot less of your income goes to interest and therefore equity builds quicker.
Many car -buyers have found that a 5-year loan doubles the cost of the car and by the time it's paid for, it's cream-crackered and barely makes a deposit for it's replacement.
Also give due consideration to the old saw...."if it flies, floats or f**ks, rent it!....sounds like hard won advice.
Have the tee shirt for the last two
... can confirm the wisdom!
Join Date: Nov 2000
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Are you able to have a line of credit based on your house value?
Whether you think it's sane to risk losing your house if you manage to smash up the aircraft in an uninsured fashion is up to you of course.
Join Date: Mar 2008
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Go for group membership if finance is any problem. I made a profit over hiring in my first year. It also improved availability in good flying conditions.
If a big repair bill comes up unexpectedly, more than there is in the group kitty, it'll be split. (6 ways in my group)
Insurance covers the possibility of a wright-off. The group I'm in has had two total hull losses in 19+ years. Insurance payed up each time.
I'd have given up flying long ago if I depended on hiring.
If a big repair bill comes up unexpectedly, more than there is in the group kitty, it'll be split. (6 ways in my group)
Insurance covers the possibility of a wright-off. The group I'm in has had two total hull losses in 19+ years. Insurance payed up each time.
I'd have given up flying long ago if I depended on hiring.
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Better rent your aircraft I'd say. Rent it a lot if you want. Change types depending on the mission.
You won't use your own aircraft enough to justify all the permanent cost associated with it. And expect costly repairs anytime.
Owning is for real rich guys (=not me) who can finance all this right out of their pocket.
The next best thing is shared ownership.
You won't use your own aircraft enough to justify all the permanent cost associated with it. And expect costly repairs anytime.
Owning is for real rich guys (=not me) who can finance all this right out of their pocket.
The next best thing is shared ownership.
