Recent Insight on Boat Financing?

[mdsilvers]

I am in the market to look into boat financing, and wanted to get input and insight from the group on the ins and outs of the current market, lenders to avoid, etc.

Does anyone have any insight/thoughts/guidance??

Thanks.

[vegasandre]

Well lets just say its not loosened up since last year.

The major banks are basically only doing loans under 100k and terms stink.
for a larger loan you need to go to marine specialty Financing.

I have dealt with CGI, SCOTT(who falls under the cgi brand but seems to have more options) and Essex. Trying to buy a Moorings Leopard 46 Catamaran. Credit Score 780-800, very high income(though self employed) and fantastic liquid assets. Purchase price 600k, Loan amount around 480k.

After going back and forth -they basically said:

1- well if you were working at Lockheed Martin for 20 years and not self employed....

2-if the boat wasnt going to be used in Charter....

3- If you kept it in the US......

4-you wrote off a lot on your 2007 returns....

5-Most of your liquid assets is held in a trust......



these were actual responses.

with that said, Here is the person I really dug- she is ultra cool and definately knew what she was talking about


ESSEX- Sheryl Boddy

Sheryl Boddy
Essex Credit Corp.
Marine and RV Finance Specialist
727-463-1961 Cell
402-918-7608 Fax
866-377-3948 ext 47011 (Toll Free)
sboddy@essexcredit.com



So basically if you are employed and not self employed you stand a much greater chance at a larger loan , But I would give Sheryl a call.


As far as myself , I am getting the boat in april even if I am buying it cash- it seems to work out better with the Moorings anyway as there is a full 5 yrs of charter revenue instead of 54 months

[kevingy]

Boat financing sucks! Don't get me started.

My wife and I tried unsuccessfully to get boat financing back in February at the worst part of the recent financial meltdown. While I'd like to blame that for our inability to buy a boat, it's really the case that we weren't prepared financially to meet the far more stringent guidelines for marine financing compared to a home mortgage. (I was preapproved for a $300K house when I couldn't get a loan for a $150K boat. To me, that's an indication of something wrong with the system.) Rather than buying a boat, we decided to postpone cruising and buy a house instead while home prices are depressed, anticipating that we will be able to sell later when home prices recover (hopefully in about six years, when my daughter leaves for college) and add the profit to our cruising kitty. The plan is that when we are ready to cruise we won't need financing. In the event that we do, of all of the lenders I talked to, there is only one that I will call:

Carter Lee
Customer One Financial
clee@customeronefinancial.com
954-547-3275

Carter did what he could to get me financing at the time. When the other lenders didn’t return my calls, Carter was a straight shooter. His approach was “We can't do this right now. This is where you are. This is what you need.”

[vegasandre]

Yeah Kevin , It is amazing how tough boat financing is right now.

I suppose it may open up somewhat eventually.

I have been approved for a New home(which I am not getting) for 1 mill
yet cant sniff a boat loan for half that.

The best part of it all is they seem to know each other- its a very small world over there. Seems like you need to have 8 figures in the bank and be a high earning w-2 employee with same place for 20 years before they even consider you right now.

But you want to know whats funny?

There are people out there who are, And more than you would think.

[SabreKai]

Do what I did. If your personal line of credit is big enough, buy it with that. Don't even ask the bank. I wanted to buy Sabre Dance with 25% down, approached my bank and they didn't even want to speak to me in Dec of 2007. So I tried another bank, the one I had my Mortgage with. The loans person asked me why I would want a loan instead of a LOC. I had thought that the LOC they offered with the mortgage was secured by my home, but it wasn't. I hadn't had the LOC opened, so she opened me up a LOC for $30k, I went out and bought the boat next day and kept my original 25% down in the bank as a buffer in case of financial problems. No chattel mortgage, no problems.

Of course I'm in Canada and the financial situation up here is somewhat different. You guys down in the US are bailing out the banks with your taxes so they can pad their paychecks/bonuses and stiff you by not giving out loans. Seems to be something wrong with that but your government seems to think its just peachy.

Sabre

[vegasandre]

Originally Posted by SabreKai

Do what I did. If your personal line of credit is big enough, buy it with that. Don't even ask the bank. I wanted to buy Sabre Dance with 25% down, approached my bank and they didn't even want to speak to me in Dec of 2007. So I tried another bank, the one I had my Mortgage with. The loans person asked me why I would want a loan instead of a LOC. I had thought that the LOC they offered with the mortgage was secured by my home, but it wasn't. I hadn't had the LOC opened, so she opened me up a LOC for $30k, I went out and bought the boat next day and kept my original 25% down in the bank as a buffer in case of financial problems. No chattel mortgage, no problems.

Of course I'm in Canada and the financial situation up here is somewhat different. You guys down in the US are bailing out the banks with your taxes so they can pad their paychecks/bonuses and stiff you by not giving out loans. Seems to be something wrong with that but your government seems to think its just peachy.

Sabre

You are correct in all those statements. especially the bottom ones about our goverment but that is a different topic altogether.

I am thinking the LOC thing may be the way to go. Wells Fargo has offered me a decent one base on my fund holdings.

[sailorboy1]

I didn't have much truble getting a $52k loan on a $72k purchase this past April from Essex Credit. I had recently paid off a bunch of stuff and they asked for proof of that, which seemed reasonable. With that said I wouldn't recommend the Essex Credit person I worked with, and if it hadn't been that I needed to get the loan completed before starting a new job I would have dropped them and looked elsewhere.

[kevingy]

Originally Posted by SabreKai

Of course I'm in Canada and the financial situation up here is somewhat different. You guys down in the US are bailing out the banks with your taxes so they can pad their paychecks/bonuses and stiff you by not giving out loans. Seems to be something wrong with that but your government seems to think its just peachy.

It's amazing how broken the financial system STILL is. I purchased a home with a new 30-year mortgage. After making my very first payment, the bank sent me an offer to take out a variable interest rate home equity line of credit. Having just closed the mortgage, they know exactly how much equity I have after making exactly one payment? I guess they want me to take out a loan in the exact amount of the money I just put down on the house? The sad part is that there are probably those out there who would jump at the offer.

[mholubec]

My wife and just completed our purchase, i contacted several of the marine lenders the initial conversations were all postive, i have a 800+ credit score but all 3 i nit picked anything they could. it really sucks i called my mortgage company they said sure we will work a deal for you i almost passed out when they quoted me the interest rate again i was putting down 20%. they came at 13.98%. i pitched a fit they blamed Tarp money they couldnt pay back yet but were having to pad the john doe consumer to cover the interest they were paying the govermen. Yes this blew my mind but i hate to say it it made sense. It just hard getting the loan officer to fess up but there were no blemishes bad enough for us to turnrd down. Other than the crappy interest made the monthly payment way to high. I did wind up finding some 7% money but you have to look but borrowing is really tough in the current market conditions. A lot harder than it use to be anyway.

[Jolly Roger]

As a real estate broker and also a sailor, I’d just like to point out that there is a world of difference in the risk of loaning for a house and a boat, even to the same person. A house will generally appreciate, (if not today exactly, then over time), it cannot be moved, (so it may be easily repossessed in the event of default), and it can’t sink or disappear. None of these are true for a boat, so loan terms and acceptances are naturally different, and harder to come by.

[bstreep]

I'll ditto the Essex Credit recommendation.

Our rep, Donna Ryan was awesome. She handled the whole deal when we bought the boat a couple of years ago. 866.377.3948. The loan ended up at Key Bank.

I wish we could find a deal on a refi, though. Over 800 credit score, big % down, survey for 50% more than we are borrowing, but still upper 6's in rate.

[markpj23]

I think you'll have the best luck going through one of the specialty RV / Marine brokers rather than directly to a bank. Essex is one - good service to me when we bought the first boat. Rates a bit higher than some I found.

SeaCoast marine Finance handled our latest purchase 9 months ago, got me more than 80% LTV and a rate in the high 6%. The loan was placed with US Bank.

I'm surprised at the horror stories in this thread for folks with good FICOs, etc. Each loan package, lender and borrower are different.

Don't give up - there are still lots of RVs moving off the lots nowadays. Lots of boat sales still happening as well.

[ChaseTheFun]

I'm new to the forum but was very interested in the OPs question(s) as I'm looking to finance a boat in the next 6 months. Some of the stories here were a bit discouraging and I'm glad to see that Markpj23 had a more positive outcome. Gives me some hope, thanks!

[bstreep]

Yeah, if you are looking to finance right now, talk to the finance companies first.

[sailorboy1]

Originally Posted by bstreep

Yeah, if you are looking to finance right now, talk to the finance companies first.

Yeah but when I got my loan this past April I tried to get approved for given amount and loan value ahead of time. But they wouldn't do it that way and wanted to know the boat before they would quote me. In the end I just made up a model etc and then changed it later when I found the one I wanted. I would have thought they could have pre-approved the amount and loan to value ahead of time so I wasn't looking at boats they weren't going to loan approve. Maybe it was the rep as she was abrasive etc.