Current Finance Market

[damionin803]

no thanks, just spent 11 years up there. Money is not a real problem as far as earning potential goes, we just don't have 70K to drop at one time. Yes, we could sit around and work until 4th quarter 2010, but that idea sucks to me. During that time things are bound to come up that will push things further back.

[GeoPowers]

Originally Posted by damionin803

Any sense out there pertaining to lenders actually lending money for a sailboat? Credit scores are both 700+ and will have 10-20% down for a 50-70K boat. I fear that after years of planning and pulling off what many said couldn't be done, we will be high and dry this summer due to the credit crunch here in the US.

We just closed on a boat last week, and had no probs with financing. We had credit score of 790-800, good proof of income, and survey showing boat was underpriced (important for our bank). The bank (USAA) offered us either 90% LTV for financing under 100k (max term 15 yrs, I think 7.00% interest), or 80% LTV for financing over 100k (max term 20 yrs, 7.25% interest). The finance amount was based on the lessor of the total cost including sale price, taxes, fees, etc, OR the survey assessed value (NOT counting taxes, fees, etc). It was important for us to talk with the surveyor to make sure we were all on the same page for this. They did say they were not currently processing ANY loans for over 150k financing, but we didn't want a boat that $$$ anyway. Hope this helps.

F&J

[Therapy]

Originally Posted by damionin803

OK, but we bare boat regularly, and are familiar with living aboard (granted, 1-2 weeks at a pop) We are going to work until the end of November, then take 6 months off. We are both in health care, and can easily get back into a hospital anywhere to re-build our kitty. Plus, spending the winter in the Chesapeake bay or the Albermarle Sound doesn't sound exotic to me at all.

If that is twice a year for a few years (11?) you about bought a boat.

[damionin803]

Originally Posted by GeoPowers

We just closed on a boat last week, and had no probs with financing.

F&J

Cool. What was your time line like? From "Hey I want that boat" to "Sign here". Also are you going to live aboard, and did you divulge that to USAA?

[Stevens 47]

What I have been hearing is that it is hard to find finance for boats older than 20 years. The main lender for older boats was Key Bank they withdrew from the marine finance market a couple of months ago. Follow this link it looks like a previous exec from Key Bank has come back into the boat lending market, I do not know if they will or are going to become the prime lenders of older boats. First Trade Union Bank now offers marine lending

[cptnslick]

I called Essex today to see what they had going:
For a 100k-150k loan:


20% down new or used
less than 10 years old
20yr term
Debt to Income Ratio less than 40%
Full doc loan – proof of income – 2yrs tax returns

Cash on hand – 1 to 1 (have to be worth what you are borowing)

>700 credit score

Other Options:
Credit unions
Local banks

[Rhosyn Mor]

Not having experience directly of loans for boats Jsuit a couple of thoughts:
is any lender is not going to let you go cruising on a boat you are making payments on, at least not out of the USA, ?
In a buyers market with 10-15k to spend cash you could find a nice little 34 footer that would get a decent coastal cruiser, and a tight but certainly doable liveaboard- A couple I know just purchased a very nice little 32 ketch for 9K. Another 5 thou in and they are off in the bahamas this year, no debt. One of the local non profits has a very nice cape dory 30 cutter thats going for 12K. both of these are good coastal/ island boats. If you are going to go much bigger you may find yourself in the place where a lot of people are, with a nice shiny big liveaboard and no money to go cruising, which would be a great shame
just my 0.0002

[GeoPowers]

Originally Posted by damionin803

Cool. What was your time line like? From "Hey I want that boat" to "Sign here". Also are you going to live aboard, and did you divulge that to USAA?

Our time line was two weeks offer to close, which in hindsight wasn't nearly enough time. We did buy a Canadian boat to bring back to the US, though, and also are living in Louisiana and were boat hunting/moving the boat to WA. It was hectic! I think if you were buying local and had some free time 2 weeks would be okay, though. We got a few waivers from the underwriters which helped out our timeline. Specifically they finalized our loan and then had us fill in the written application afterward. They also let us have the cashier's check (the only way USAA gives out financing for boats now) written to our escrow co. and sent to them. This is a big risk as the loan starts when the check is written, but it was the only way we could close on time. The usual is to have a cachier's check sent to you, and then you deposit into an account you see fit for the purchase. (Yes, wierd since aren't you gonna take the check, send it back to USAA for deposit to your checking acct, and then wire money for the closing??)

As for living aboard, we did tell that to USAA. I prefer to be 100% straight on big deals just to CYA. And if the USAA loan rep didn't tell the underwriters that I plan to live aboard, that's not my problem.

Just in case you do have USAA and plan on going that route, be warned that most of their agents are not knowledgeable about boat loans, and even fewer know anything about boat loans over 100k. While getting approval was easy (1 day the first time prior to putting an off in, then 15 minutes for the second time with a specific $$ amount), the reps themselves didn't really know alot about what the process was with one or two exceptions. We almost didn't make our closing date because of this. However, banking with USAA is the only way to go for us for ease of moving, one-stop shop, on-line/phone banking, etc. Anyway, if you want specific details on our boat deal with them just shoot me a PM.

Frank

[TabbyCat]

"We are going to work until the end of November, then take 6 months off."

Apply for the loan before you quit your jobs.

[sailorboy1]

I talked to a couple of lenders this weekend at the New England Boat show and it sounds to me that overall the only thing that has changed is that you have to provide income info. None said that boat age would rule out a loan, to a limit, and one said they go down to a 1960 boat. None seemed to have a problem overall with a 1980 boat at $80k (was an example I asked them). Downpayments were I think "normal" with 10% on >$100k loans and between 15-20% on lower ones depending on the various price level. Interest rates and terms varied based on the loan amount. It was interesting to me that the interest rates haven't come down further, meaning that for the banks boats are a better deal now because they are getting more margin on the money.

[TaoJones]

Originally Posted by damionin803

OK, now I'm starting to feel a little bit warmer and fuzzier inside. Thanks to all. I too think it is not as bad as the drive-by media would want us to think.

I don't know if you're still looking for financing, damion, but there's an excellent thread now called http://www.cruisersforum.com/forums/...cks-24327.html which I think will give you an accurate and up-to-the minute idea of the current state of marine finance.

TaoJones

[nautical62]

I've read several posts lately from people who were unable to get loans with 20% or less down, but they are not you, and I think no matter what you read here, it doesn't hurt to go talk to a loan officer and find out exactly what your circumstances will indicate.

If your goal is to go cruising for no more than six months, you may be able to find a suitable boat for much less than the price you mentioned, especially if you are not planning any passage making. I just purchased a Hunter 30 needing very little attention for 26K that I have two 3-month cruises planned for over the next two years. If you are willing to do some work, there are even more affordable options. I have over 150 cruising days logged on a boat I purchased for 10K and invested maybe another 5K in over 8 years. Great times all over the Great Lakes, Florida and Bahamas in that boat.

[BoxerOne]

Originally Posted by damionin803

We are moving to the Chesapeake bay area. Are you saying people nowadays need to something like 50% down for a 70K boat to secure financing? Well, we could work for another year, and buy something outright, but as alluded to in other threads, we don't want to wait until the perfect situation-seize the day.

You can see there are several folks in varying circumstances who have secured financing.

I can only speak from my recent experience.

I just purchased a 1994, 42' sailboat in very good condition in October. We have been looking for over a year and decided to pull the trigger last month when we found the boat we wanted and had saved the requisite down payment. We worked with several banks and credit unions to find the best deal, all were different on the margins but they all had three things in common.
First, most were willing to finance 85% of the boat (meaning willing to accept 15% down) on what they believed was the true value of the boat (a survey from a reputable surveyor they know helps).
Second, they cared about two things -- Debt to Income ratio and credit scores. If after your purchase you are below around 35% D to I, they are willing to loan as long as you have solid credit history.
Third, documentation of your income and work history. If you have been pretty solid over the past few years and have a reasonably stable job or source of income then they are fine.
Remember in all of this, the banks and credit unions are not making any money UNLESS THEY LOAN MONEY. They are not going to take unnecesary risks but if you can prove to them you are a good risk they are willing to loan you the money. The interest rates did not vary that wildly -- all were in the 5.25 to 5.75% range for a 20 year $150K to $200K range. It is similar for smaller loans but the age and condition of the vessel matters.

I hope this helps, don't be discouraged, do your homework and good luck.

[offline]

We just walked away from a deal that we couldn't get financed reasonably. Sad, we made an offer to the seller and he didn't want to carry it, he'll likely be stuck with that boat for a very long time.

What I have found is that banks are very willing to loan on new boats with 10-20% down.. We were prequalified up to $400K on a new boat.

However I couldn't get reasonable terms on an older sailboat and we're very well qualified.

[TabbyCat]

Just re-financed TabbyCat. Nothing down (since I have enough equity inthe boat),with a 5% rate through USAA.