Current Finance Market

[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.

[BadFish]

Gonna have to suck up a 9 or 10% int rate, but it can definitely be done. The economy, though in a downturn, is not as bad as many make it out to be. Banks will lend... That's how they make money.

Cheers

Bill

[TaoJones]

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.

I can't comment specifically on your area, Damion (I take it you're in, or near, Columbia, SC), but if you've accumulated $5-14k for a down payment, you can still go sailing if you're willing to lower your sights a bit. A smaller, less expensive vessel that you buy outright can provide a great deal of sailing satisfaction.

If your dream is to live aboard and cruise, however, then you may have a problem. I don't know of any lenders willing to lend on a boat with only 10-20% down. And if your limited budget forces you to opt for an older vessel of sufficient size and capability to live aboard and cruise, then financing it will be difficult to arrange due to the vessel's age, in any event.

Insuring it will be problematic, as well, even if it gets a clean survey. And I would doubt that you could find a vessel like that for $5-14k that doesn't need a great deal of expensive refitting to bring it up to even minimum "cruise-worthy" standards.

Lenders will consider your stellar FICO scores, but those scores alone won't be sufficient to obtain a loan in the current credit environment. A borrower may have a high FICO score, an unblemished credit history, enough cash to meet a lender's minimum down payment, income adequate for servicing a loan and a low debt-to-income ratio and still not get the financing to acquire a boat. That is because lenders now have to look at every potential loan they make as a failure ending in repossession.

Very few lenders will be eager to get into the marketing of a repossessed boat.

By all means, don't give up - dreams easily obtained are seldom worth the effort, in my experience, but the ones that test one's perseverance often surpass one's greatest expectations. And anyway, as I stated, I'm not familiar with your area, so it's possible that you may find financing more readily than in some other area.

Best of luck to you in your quest for the right vessel at the right price.

TaoJones

[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.

[Robertcateran]

If you are still working, get a smaller boat and do some local cruising. The smaller the boat the easier it is to get sailing. A local area is exotic cruising to people from somewhere else

[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.

[seacap]

damionin,
don't give up hope. I just got a large equipment loan for my business that people said was not likely in this enviornment. Actually was approved in something like 6 hours. Also talked to another gentleman that was in the equipment leasing biz that said there was plenty of money and willing lenders out there.

My point is talk to a yacht broker and they can give you recommendations on specialty lenders who deal with yachts. You probably will pay a bit more in interest but you may be surprised.

[Hyprdrv]

The cheapest way to do this is a refinance on your home if you got one. I just got a 4.5% loan and taking the money out to buy my first boat.

Steve

[damionin803]

Re-fi is a good idea-but we are totally free since we sold our house a year ago. No mortgage, no car payments, no credit card debt, no kids, nothing. We would never buy a house again. I figure a boat will be the ultimate mobile home.

[Tempest245]

Have you talked to a lender? There were plenty at the Annapolis Boat Show in the fall. I used Essex Credit several years ago, found them to be pretty good. Is it really that bad out there?

[bene505]

Try buying a repossessed sailboat. The bank that currently owns the boat sometimes provides a loan -- and a maybe even a discount loan. And you get a good deal on a sailboat in the process. It just takes time to look.

From a write-up I did elsewhere, a few months back:

Check for Repo sailboats. Part of my 6 month search included searching Yachtworld for keywords related to that. Use the advance search and put words like these into the Keyword field: bank, repo, repossessed, repossession. (I used to do mis-spelling variations, if memory serves, but now YW corrects my intentional mis-spellings. My theory is that better deals may be found when you're one of the few people finding the misspelled listings.)

I think you have to use one keyword at a time. I don't remember if there's a way to OR them.

I just tested out some keywords:
- Using "bank", I got 148 sailboats
- Using "repo", I got 10 sailboats
- Using "repossessed", I got 1 sailboat
- Using "repossession", I got 2 sailboats

Try other keywords too:
- Using "motivated", I got 334 sailboats
- Using "bankruptcy", I got 1 sailboat (and a different one for "bankrupt")
- Using "forced", I got 55 sailboats

Hope that helps."

[markpj23]

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.

My experience was the same as 4 years ago..... I'd never have known there was an economic / financial crisis had I not read the papers.

Last week I closed a 6.99% loan that represented 90% loan to value on a 250K+ boat. Took all of 3 days to get an approval letter.

The key is credit score and most importantly proven income. Proven means 2 or more years of tax returns, employment verification,etc. No more liar's loans.... Age of boat, down payment, etc are also factors in the loan decision.

PM me if interested and I will refer you to the finance outfit I used. They are nationwide.

Lenders are still in the market. Being choosy yes but still looking to make money the old fashioned way... by loan sharking

[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.

[bstreep]

I talked with Essex last week - just to get a feeling about refinancing. It appears as though rates are still around 7% for great credit - and it takes a 20% downpayment. But, it can be done.

[decktapper]

Hello damionin:
A little off topic, but an option you may want to consider: if you can get contract jobs in Alaska in health care, you may make a lot of money and keep it. The tax man probably steals 50% of the money you make now.
Good luck.