Buying a boat... Tips on getting a loan???

I know some of you boaters out there are also finance professionals.

Could you give me some tips on getting a boat loan (used). I am a first time buyer, and I hear its hard to get them with the given economy of the nation. What do banks/credit unions look for. I am looking the 30K range with down payments in the 10-15% range.

Also, does anyone know if state sales tax can be financed with the purchase.

I am in Michigan.

Re: Buying a boat... Tips on getting a loan???

Welcome to iBoats!

I?m not a ?professional? but I did stay at a Holiday Inn Express last night?lol. I got a boat loan on my used boat last year so I have a couple tid bits:

1. Every bank is just a little different on the rules. One bank would only finance 95% of the NADA price where another would finance 90% of the purchase price, not to exceed NADA retail value. Check the terms carefully.
2. When I filled out the loan paper work I had to have the engine, hull, and trailer serial numbers to get the loan.
3. I didn?t put a whole lot down, so I paid cash for my tax. If you have a lot to put down, you might use some of that for the tax. I?m not sure what MI tax is, here its 3%, so you could put 7-12% down and cash for tax.
4. My seller was upside down on his loan, I had to wait for him to pay down his loan 2K before mine went through, make sure all of that is in order.

Good Luck!

Re: Buying a boat... Tips on getting a loan???

To add to your question, if you dont mind, what kind of intrest rate is to be expected with a credit score a little over 750?

Re: Buying a boat... Tips on getting a loan???

What if you are looking at a boat that NADA comes up with a value that is less than what the seller is asking, by a significant amount? For Example:

I am looking a this 1999 Baja 25' Outlaw w/ trailer and 502 Mercruiser.

Its tag is $30,000

Looking at many boats, and seeing many 1999 25" Outlaws, alot of them are selling for more than 30K, but when I goto Nadaguide.com and price it out with all the options listed from the seller, it only comes up as like $23000.

What happens in this case? Would the bank want you to have a down payment that would cover 10% of the retail value? So I would need to have $9300 down? 7K to eat the difference to meet retail, and then another $2300 to make up the 10% of the retail amount?

How do people buy boats when the seller (private or marina) sell the boats for above market value? I dont have 10K to put down on a 30K boat.

Maybe I am not understanding this.

Thanks

Re: Buying a boat... Tips on getting a loan???

I realize that what I'm about to say will, in no way, help you with your quest for a loan, but it's worth mentioning.

I would be very hesitant to finance any toy, especially a $30K toy. Even though my toys aren't the envy of the water, road, or trail, they were paid for up front.

I wouldn't overlook the cheaper, older, less-fancy boats . . . . they float just as good, and even better, you will own it.

Re: Buying a boat... Tips on getting a loan???

The rates are fairly high for 'toys' (boats, motorcycles, & RV's) at least at my credit union. Right now it's 7.7% for up to 60 months and 8.7% for 72 months. The best bet you would have is to go to your bank and see what they have to offer. Talking to someone is free and would be in the best position to tell you what the rates are, if you could borrow what you want for that exact boat, etc. Most will even do it over the phone. One thing I would caution against is that even in today's economic climate, what the bank says you can afford usually is optimistic versus what you really can afford. Only you know what your family budget can truly handle, the bank just looks at income and your current debt ratio.

Re: Buying a boat... Tips on getting a loan???

i paid cash for mine... little over 3k but ill bet it runs and pulls as well as most newer boats. and i own it to boot. if i could afford a nicer boat that was newer id prolly buy it but i dont like financing something that isnt a daily driven vehicle and even then i dont have car payments of any sort.

Re: Buying a boat... Tips on getting a loan???

i am a finance professional, and agree that the best thing to do is start with a bank (or even better) a credit union with which you have a relationship. your score is good and you are putting cash down, do really it seems you are in better shape than most folks. a few years ago, during the height of the silliness, I was pushing 115% NADA no cash down, financing terms of 10 yrs even on well used boats. those days are over

Re: Buying a boat... Tips on getting a loan???

Steve Mahler said:

a few years ago, during the height of the silliness, I was pushing 115% NADA no cash down, financing terms of 10 yrs even on well used boats. those days are over

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damn no wonder there is no money to be made from so many homes and vehicle repo's... im not saying everything is of the like but if it was done on a "luxury item" why not homes and cars?

oh well everyone learns one way or another. right now our country is learning the hard way.

Re: Buying a boat... Tips on getting a loan???

I just financed mine in October '08, the credit union balked because proving income was harder being self employed.

However, my local banker whom I have dealt with for many years, did it no problem, 7% for 60 months, only $1k down, I paid all taxes/tag separate.

NADA is ok for cars, cause there is such a pool to glean info from, boats are a whole 'nother story, and NADA is a guess. NADA often does not have all options available to add to the value, and often don't add trailer. I would take printouts of many of the same type of boats and there selling price with you.

I was lucky and got an absolute steal on my boat, way below market value, so was able to finance with no problem with very little $$$ down.

Re: Buying a boat... Tips on getting a loan???

Rowroy said:

I realize that what I'm about to say will, in no way, help you with your quest for a loan, but it's worth mentioning.

I would be very hesitant to finance any toy, especially a $30K toy. Even though my toys aren't the envy of the water, road, or trail, they were paid for up front.

I wouldn't overlook the cheaper, older, less-fancy boats . . . . they float just as good, and even better, you will own it.

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I have done that.. I started with a late 80's bayliner, then moved to an early 90's checkmate, and now have a 95 checkmate. Bought all of them cash.

I would like to go bigger, faster and newer. So the price jumps quite a bit. So this is where I will become a first time borrower (at least for boats). One I don't have 30K to shell out for a boat, and 2 I don't want to. I would rather finance, and just pay it off early.

I have a Ford Super Duty truck that is financed, and I have a motorcycle that was financed, but is successfully paid off. The truck is nearing being paid off early. I live with my mom (I am 24). Single being the reason I still live at home, no need for a house. But that is a whole nother story.

Anyways, I make decent money, I am a flat rate auto technician for a local Honda dealer, so weekly pay changes depending on the workload. Some weeks could be 40hrs, some 70 or 80 hrs.... Just depends.

Anyways, the payment I am not worried about. I just dont want to have to put a crazy amount down because the boat is being sold above market value. (I will take into consideration that NADA is not quite accurate as stated above).

Now since a marina is selling this boat, can they finance it for what they are selling it for, then just make a down payment accordingly, or is their lender still only going to give market value for the boat and the buyer has to make up the difference?

Thanks for all your reply's.

Re: Buying a boat... Tips on getting a loan???

LOW-LIFE said:

i paid cash for mine... little over 3k but ill bet it runs and pulls as well as most newer boats. and i own it to boot. if i could afford a nicer boat that was newer id prolly buy it but i dont like financing something that isnt a daily driven vehicle and even then i dont have car payments of any sort.

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I couldn't agree more. In today's climate one should be drastically reducing debt...not acquiring more. My humble opinion.

Re: Buying a boat... Tips on getting a loan???

Sorry to sound like an A hole but you are nuts if you do this. You are 24 and you live with your Mom and you want to buy a 30 thousand dollar boat. Sorry to be blunt but this is a big mistake, are you planning on living with your mom for the next 5 + years or into your early thirties so you can buy a boat. This scenario is exactly why this country is in the situation it is in. You are asking if a bank will loan you way more than what an acceptable debt ratio would be on a luxury item. Most banks loan on 80 to 90 percent of NADA value. Not what you think the boat is worth or what ABOS or any of those other silly books say the boat is worth. And if you cannot afford the large down payment on this item, maybe that should be telling you something. Do yourself a huge favor and stop buying toys with all your money and save up for a year or two and buy a house, sooner or later you are no longer going to be single or your Mom is going to grow tired of sharing her house with her adult son. You can also buy a lot of boat right now for under 10K. That concludes this preach session.

Re: Buying a boat... Tips on getting a loan???

superpop said:

Sorry to sound like an A hole but you are nuts if you do this. You are 24 and you live with your Mom and you want to buy a 30 thousand dollar boat. Sorry to be blunt but this is a big mistake, are you planning on living with your mom for the next 5 + years or into your early thirties so you can buy a boat. This scenario is exactly why this country is in the situation it is in. You are asking if a bank will loan you way more than what an acceptable debt ratio would be on a luxury item. Most banks loan on 80 to 90 percent of NADA value. Not what you think the boat is worth or what ABOS or any of those other silly books say the boat is worth. And if you cannot afford the large down payment on this item, maybe that should be telling you something. Do yourself a huge favor and stop buying toys with all your money and save up for a year or two and buy a house, sooner or later you are no longer going to be single or your Mom is going to grow tired of sharing her house with her adult son. You can also buy a lot of boat right now for under 10K. That concludes this preach session.

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I totally agree with superpop and one more thing. If you start saving your money. I'll bet even if your still living with Mommy. By the time you have saved enough money to buy a boat that you like and will fit your needs. You will find a boat that is better, cost less and you will have paid cash for it. With no payments or interest and you will sleep better at night. A house is an investment that will pay you over and over, even in these tough economic times. A boat is just a GREAT TOY that you will spend and spend and spend on. Buying a boat is a lot cheaper than owning a boat.

Re: Buying a boat... Tips on getting a loan???

superpop and cbavier, that's the same advice I'd give either of my sons,and they probably wouldn't listen either!!!

Re: Buying a boat... Tips on getting a loan???

superpop said:

Sorry to sound like an A hole but you are nuts if you do this. You are 24 and you live with your Mom and you want to buy a 30 thousand dollar boat. Sorry to be blunt but this is a big mistake, are you planning on living with your mom for the next 5 + years or into your early thirties so you can buy a boat. This scenario is exactly why this country is in the situation it is in. You are asking if a bank will loan you way more than what an acceptable debt ratio would be on a luxury item. Most banks loan on 80 to 90 percent of NADA value. Not what you think the boat is worth or what ABOS or any of those other silly books say the boat is worth. And if you cannot afford the large down payment on this item, maybe that should be telling you something. Do yourself a huge favor and stop buying toys with all your money and save up for a year or two and buy a house, sooner or later you are no longer going to be single or your Mom is going to grow tired of sharing her house with her adult son. You can also buy a lot of boat right now for under 10K. That concludes this preach session.

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I am buying a house within the next 2 years. Look people, I am not looking for an argument, or looking to have people tell me what to do. I am looking for answers to the question at hand, we are way off topic. Money is not the issue ok, I make approx. 60K a year (after taxes). I am a master certified automobile mechanic, PLUS I also run my own landscaping company based out of southeast Michigan. The money is not what I am worried about. If you guys want to know more personal information which is irrelivant to this thread, I pay most of the utility bills around here as well, because my mom couldn't afford to live on her own, thats why I am still at home. Once my truck is paid off next spring (1.5 years early) paying $1100 a month, then I am going to buy a house.

Now if you need to know anything else, just ask, or else, not to be an ***, but can we get back on topic to the question at hand?

BTW, I have the money to buy the boat cash. But I would like to keep some of that money, because I am looking at putting 25-35% down on a house. Plus the added credit would be nice. If I take out a 10 year loan on a 30K boat, with 20% down, the payments should be what? Right around $300 if my math is correct. This would allow me to double payments in the off season, or even triple if I wanted to. Again I am not worried about the money, I am not trying to be an ***.

And Superpop, no hard feelings, I feel where you are coming from. But I am well enough on my feet to start my own life plus have the toys, I just haven't yet.

Thank you all.

Re: Buying a boat... Tips on getting a loan???

boosted_blazer said:

I am buying a house within the next 2 years. Look people, I am not looking for an argument, or looking to have people tell me what to do. I am looking for answers to the question at hand, we are way off topic. Money is not the issue ok, I make approx. 60K a year (after taxes). I am a master certified automobile mechanic, PLUS I also run my own landscaping company based out of southeast Michigan. The money is not what I am worried about. If you guys want to know more personal information which is irrelivant to this thread, I pay most of the utility bills around here as well, because my mom couldn't afford to live on her own, thats why I am still at home. Once my truck is paid off next spring (1.5 years early) paying $1100 a month, then I am going to buy a house.

Now if you need to know anything else, just ask, or else, not to be an ***, but can we get back on topic to the question at hand?

BTW, I have the money to buy the boat cash. But I would like to keep some of that money, because I am looking at putting 25-35% down on a house. Plus the added credit would be nice. If I take out a 10 year loan on a 30K boat, with 20% down, the payments should be what? Right around $300 if my math is correct. This would allow me to double payments in the off season, or even triple if I wanted to. Again I am not worried about the money, I am not trying to be an ***.

And Superpop, no hard feelings, I feel where you are coming from. But I am well enough on my feet to start my own life plus have the toys, I just haven't yet.

Thank you all.

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Nice!! Nuff Said....Sometimes ppl here are quick to judge.

Re: Buying a boat... Tips on getting a loan???

"How do people buy boats when the seller (private or marina) sell the boats for above market value? I dont have 10K to put down on a 30K boat."

"BTW, I have the money to buy the boat cash. But I would like to keep some of that money, because I am looking at putting 25-35% down on a house."

You are contradicting yourself, go back and read your posts, If you could buy the boat with cash then do that, any financial advisor will tell you that. You are going to have a much easier time getting a home loan with a better interest rate on a house vs a boat. That will save you tons of dough. Financing a 30K boat at 7% interest will cost you around 42K over 5 years. and in five years that boat will be worth around 12-15K. A house on the other hand will hold value. You asked a financial question and I offered my opinion. And I stand by my contention that this is symptomatic of our society and its financial problems. Everyone thinks the deserve a 4000 square foot house and two new Escalades and a 30K go fast boat. Not saying that's you but I see a lot of it, and it is all built on a house of cards.

Re: Buying a boat... Tips on getting a loan???

Get you a five thousand dollar boat instead of a thirty thousand.You will have just as much fun with yes it might not be as nice but it will get you up and down the lake just the same.Besides you no what they say about boats the happiest day is when you buy it and then when you sell it.

Re: Buying a boat... Tips on getting a loan???

I could have bought my boat for cash, but I got a 6% rate for 6 years. It's pretty easy to make more than 6% on your money if you have any market sense even today. My car is at 0% for 6 years, why would I not take that? My house is 4.2%. What I am saying is at the right rate it does not always make sense to pay cash, so stop judging this guy.