Best Financing/insurance options?

[MsKG]

Hi all:

My husband and I are about to upgrade to a Mooney (tbd). We were fortunate enough to have the cash to buy our current plane outright, but we will be financing the Mooney. This will be our first time financing so not sure which direction to turn. What are our best options? Is it better to do a 2nd mortgage if possible? Or use an aviation-specific lender? Would love recommendations for insurance companies as well. ALSO, if you happen to be in the market for a Piper Cherokee PA-28 140, hmu!

Thanks in advance!

Karen

[carusoam]

Hey Karen, welcome aboard...

Personal finance has a lot of expertise to go with that...

I used AOPA/Bank America when I had the same challenge, years ago...

Mostly, I wanted the experience of AOPA behind me...  after a couple of years of ownership we refinanced looking for the lowest rate...

I had gone to my bank... they were so happy to discuss private airplane financing... for my new Lear or Gulfstream... they surprised themselves with how little they knew about GA airplanes... 

 

For insurance... many MSers use @Parker_Woodruffand company...

Start organizing your Transition Training while you are in the planning phase...

Good luck with your next steps...

Best regards,

-a-

[1001001]

For financing, I have had a very good experience with Dave Savoie with US Aircraft Finance co.  I have financed two airplanes with them including my Mooney.

https://www.usaircraftfinance.com/

 

Edited September 21, 2020 by 1001001

[ZuluZulu]

Dorr has been great.  Always responded promptly and like they care about my business.  After closing, I got an unexpected envelope in the mail from them: a congratulatory note and a keychain with my new tail number.  A nice touch.

[Parker_Woodruff]

10 hours ago, MsKG said:

Would love recommendations for insurance companies as well.

Hi Karen,

Feel free to call or email for a quote:

Parker@airspeedinsurance.com

214-295-5055 (office)

[Hank]

3 hours ago, Parker_Woodruff said:

Hi Karen,

Feel free to call or email for a quote:

Parker@airspeedinsurance.com

214-295-5055 (office)

Parker is good.

[MsKG]

22 hours ago, carusoam said:

I had gone to my bank... they were so happy to discuss private airplane financing... for my new Lear or Gulfstream... they surprised themselves with how little they knew about GA airplanes... 

TOO FUNNY! All good advice, thank you! Appreciate your time. 

[Unit74]

On 9/21/2020 at 12:40 AM, 1001001 said:

For financing, I have had a very good experience with Dave Savoie with US Aircraft Finance co.  I have financed two airplanes with them including my Mooney.

https://www.usaircraftfinance.com/

 

I financed through Alex Savoie twice as well. She was straight forward. US Aircraft does have a prepayment penalty FYI.  Paying a penny more on the monthly triggers it. Seriously. I was warned to only pay the exact coupon payment or else. 
 

rates are in the low 4% right now. I inquired about refinancing mine a week ago. 

[Skydancer2992]

I used a second mortgage as I had one already. It functions like an overdraft on my checking account, if I need one.

The interest is tax deductible and the interest rate is 3.99%. I paid it off early and it was another feather in my credit rating.

[dzeleski]

Ill vouch for Parker as well. Super nice dude and is very easy to deal with.

I used Dorr Aviation for the loan, they were super easy to deal with and helped me understand quite a bit that I wasnt 100% aware of as it was my first airplane.

[MsKG]

7 hours ago, Unit74 said:

US Aircraft does have a prepayment penalty FYI.  Paying a penny more on the monthly triggers it. Seriously. I was warned to only pay the exact coupon payment or else. 

Ooooo THIS. Knew this could be a possibility for mortgage loans, but don't think I would have considered it a possibility here. Thanks!

[MsKG]

6 hours ago, Skydancer2992 said:

I used a second mortgage as I had one already. It functions like an overdraft on my checking account, if I need one.

The interest is tax deductible and the interest rate is 3.99%. I paid it off early and it was another feather in my credit rating.

Didn't consider the tax deduction side of it - NICE. Thank you!!

[ZuluZulu]

14 minutes ago, MsKG said:

Ooooo THIS. Knew this could be a possibility for mortgage loans, but don't think I would have considered it a possibility here. Thanks!

However you can sign up for USAF's biweekly plan, to pay a little less interest.

[Unit74]

2 hours ago, MsKG said:

Didn't consider the tax deduction side of it - NICE. Thank you!!

The newest iteration of tax laws made this a moot point for me. I now take the standard deduction which yields a better result. First time in my Responsible life I ever did so was last year. 

Edited September 22, 2020 by Unit74

[carusoam]

Whichever way you go with finance.... read every line, understand every line...

Aircraft financing doesn’t come with the usual consumer protections you may have seen in other places...

Know what is involved with paying it off early...

and if the interest can be deducted from your income tax...

 

Interest rates are at an epic low and are scheduled to stay this way for another 18 months or so...

Use caution when refinancing the house to have a plane... losing a job could get really extra hazardous...  or...

Repo-ing a house... is much more challenging than taking away a car or plane...   hmmmm....
 

PP thoughts only, not a finance guy...

-a-

[1001001]

On 9/22/2020 at 4:10 PM, MsKG said:

Ooooo THIS. Knew this could be a possibility for mortgage loans, but don't think I would have considered it a possibility here. Thanks!

The prepayment penalty holds only for the first year or two of the loan (at least on both loans I have had with them).  After that period, you can prepay in any amount at any time.

[MsKG]

On 9/22/2020 at 5:17 PM, Unit74 said:

The newest iteration of tax laws made this a moot point for me. I now take the standard deduction which yields a better result. First time in my Responsible life I ever did so was last year. 

True. We've been doing the standard deduction so not sure this would actually apply to us either. Good point. 

[MsKG]

On 9/22/2020 at 8:34 PM, carusoam said:

Whichever way you go with finance.... read every line, understand every line...

Aircraft financing doesn’t come with the usual consumer protections you may have seen in other places...

Know what is involved with paying it off early...

and if the interest can be deducted from your income tax...

 

Interest rates are at an epic low and are scheduled to stay this way for another 18 months or so...

Use caution when refinancing the house to have a plane... losing a job could get really extra hazardous...  or...

Repo-ing a house... is much more challenging than taking away a car or plane...   hmmmm....
 

PP thoughts only, not a finance guy...

-a-

All great points!! I'm more familiar with mortgage financing, that's why I considered that first. But you nailed it with the repo comment (God forbid) especially in this crazy economy. Who knows what will happen next...

Appreciate all your advice.

[Unit74]

On 9/23/2020 at 7:36 PM, 1001001 said:

The prepayment penalty holds only for the first year or two of the loan (at least on both loans I have had with them).  After that period, you can prepay in any amount at any time.

Correct. The very next payment after my prepayment term was up I increased it and pay as much as I can afford over the minimum now.

[Mooney_Allegro]

I'm just curious.....for an aircraft loan, is a Loan Origination Fee of 1% of the borrowed amount and an Application fee of $695 charged by the finance company routine nowadays? 

 

[philip_g]

3 hours ago, Mooney_Allegro said:

I'm just curious.....for an aircraft loan, is a Loan Origination Fee of 1% of the borrowed amount and an Application fee of $695 charged by the finance company routine nowadays? 

 

Old thread...

I've never paid an origination fee. Just the 695 fee.

I've always found it's easier to borrow more money. No one wants to mess around with less than 65 or 75k

Edited October 28, 2021 by philip_g

[Mooney_Allegro]

Hi Philip,

Thanks for the info.  When I used Air Fleet Capital for my Mooney financing, they only charged a $695 closing fee.  Do you know of a financing company that you recommend?

[philip_g]

45 minutes ago, Mooney_Allegro said:

Hi Philip,

Thanks for the info.  When I used Air Fleet Capital for my Mooney financing, they only charged a $695 closing fee.  Do you know of a financing company that you recommend?

I've used air fleet I think 3 times and Steele aviation once. I've been happy with air fleet and would use again. Where ibran into issues is borrowing less than air fleets minimum, I wish I had a good answer for you on that one.

Edited October 28, 2021 by philip_g