Boat finance questions

[got seashells?]

I have a few questions that I have not been able to locate answers to so I hope you can help.
Is there a huge difference in loan options out there on used cats? I am trying to research lending options so I can get us pre-qualified prior to making an offer. I know about home mortgages and all of those options but not about large boats. We will need to finance the boat while we are still working to retirement and the tax deduction will help being a second home. Once the current home sells we will pay down the note if not pay it in full. We are members of USAA and I see that they finance bigger boats and I think someone here had suggested Navy Fed but I am not a member there. We will have up to 20% down but would rather not tap all the reserves. Our credit portfolio is strong so should not be an issue and out DTI is a non issue. We are guessing the boat will be 1995 or newer and it will have to be kept in a marina until we are ready for full time.
So I guess the questions are ,
Is there a bunch of loan producs to decide between?
Is ther a lender better than others we should research?
Given the above do you see any issues I may run into?

[Dave Lochner]

Just financed a boat with Sterling Associates. The loans they make require the boat to be documented. The mortgage is "Ship's First Preferred Mortgage."

Rates change as the boat ages. 20 years old is a break point both in terms of length of loan and rate. We just got a 4.85% 15 year loan on a 21 year old boat (1993).

Give Cindy Lewis at Sterling a Associates ask call or email, she is knowledgable and helpful.

Dave

[Stugots]

Originally Posted by Dave Lochner

Rates change as the boat ages. 20 years old is a break point both in terms of length of loan and rate. We just got a 4.85% 15 year loan on a 21 year old boat (1993).

I may be having a brain fart, but what do you mean by 20 years old is a break even point? I'm sitting here trying to interpret that but I can't.

[WebWench]

I think they meant that twenty years old is the max. Age of boat they will finance. Since boats are usually depreciating assets older ones are very hard to find financing for.

[a64pilot]

Maybe it means that over 20 yrs old results in high interest rates?

[Tim R.]

You might be able to get a better rate by getting a home equity loan and then buying the boat with that.

[FLLCatsailor]

I highly recommend Joe Flynn from Scott Financial. We do a lot of business together, and he takes really good care of his clients.

[Stugots]

Originally Posted by WebWench

I think they meant that twenty years old is the max. Age of boat they will finance. Since boats are usually depreciating assets older ones are very hard to find financing for.

That was my first thought but his boat was 21 years old.

Hmmmm.

[StuM]

Originally Posted by Stugots

That was my first thought but his boat was 21 years old.

Hmmmm.

Not the limit. The breakpoint beyond which they will only offer shorter term financing at higher interest rate

[Dave Lochner]

Stu is correct. A boat under 20 years old can get 20 year financing. Boat over 20 can only have 15 year financing. There is also a slight premium in the interest rate, maybe a half point or so. The amount you borrow also affects the rate.

[Stugots]

Originally Posted by Dave Lochner

Stu is correct. A boat under 20 years old can get 20 year financing. Boat over 20 can only have 15 year financing. There is also a slight premium in the interest rate, maybe a half point or so. The amount you borrow also affects the rate.

Ahh ok. Makes sense now. I think that was the info I was missing.

Thanks.

[got seashells?]

Ok got a great deal from USAA so that part is done. So now I will need to find a boat.... Have inquired on a few and fingers crossed the people are honest about what they have prior to me deciding to hop a plane and going to look. Once you are in contact with the broker, is it ever an option to talk to the owners?

[Carlisle Spirit]

Originally Posted by Dave Lochner

Stu is correct. A boat under 20 years old can get 20 year financing. Boat over 20 can only have 15 year financing. There is also a slight premium in the interest rate, maybe a half point or so. The amount you borrow also affects the rate.

What is the loan to valuation ratio?

(what percentage of the cost can you borrow?)

CS

[Dave Lochner]

Originally Posted by Carlisle Spirit

What is the loan to valuation ratio?

(what percentage of the cost can you borrow?)

CS

85%. 15% down. Sales tax cannot be financed. Survey, documentation fees, state registration fees, etc. ran about $2500 for a boat in NY.

[ctl411]

I you have good credit you can get loans on whatever boat you want. The rate may be a little higher on older boats but not much. Check with local credit unions. We used ours for a 1976 boat.