Boat Loans: Questions To Ask Before You Apply
How does the loan fit into my budget? Monthly payments on a boat loan should fit comfortably within a budget that covers all of your needs, wants, debt payments and savings. Use our boat loan calculator to see estimated monthly payments, interest costs and total payments.
Payments toward the boat loan combined with other debt payments shouldnt exceed more than 20% of your income.
What is the true cost of boat ownership? Buying a boat isnt your only new expense. Additional costs include fuel, licenses, insurance, storage, maintenance and repairs. Boats also depreciate over time, just like a car.
Does my boat have resale value? Its smart to buy a boat that is both affordable and popular, as this can attract potential buyers if you decide to sell it and pay off your loan at any point in the future.
How Houseboat Loans Are Structured
Houseboat loans may be quite large, so theyre often spread over more time. A houseboat loan is almost always a portfolio loan portfolio loans are kept on the books of the lender that made the loan and are not sold. That may mean more risk for the lender, so you could end up paying more for the loan as a result. Lenders also may have more stringent requirements, too. Heres what to expect when looking into this type of boat loan.
How Many Years Do Lenders Finance Boats For
Note that loan terms vary from lender to lender and by loan type. A personal loan, also known as an unsecured loan, often comes with shorter loan terms, while lenders who specialize in boat loans may offer longer loan terms. There are two main avenues you can pursue for financing your boat:
- Many borrowers go directly to lenders like credit unions and banks to get financing for a boat. These financial institutions tend to offer some of the best interest rates on the market. If you’re a bank or credit union member, you may even qualify for discounts when you finance your boat with them.My Financing USA works with banks and credit unions across the nation to find the best boat loan for you.
- Dealer financing:The majority of financing for new boats happens through dealerships. These businesses draw in customers, as they’re the ones with a wide selection of boats to sell and have relationships with financial institutions that can offer customers boat loans. When a customer expresses interest in a boat at a dealership, they may pursue financing through the dealership or be referred to a bank.
At My Financing USA, you can finance a boat loan for many years anywhere from 60 months to 240 months. This flexibility means you can pay off your boat as quickly as five years or take up to 20 years to repay your loan. How long you can finance your boat with My Financing USA depends on your loan size:
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Average Length Of Boat Loans
While you can technically obtain a boat loan anywhere from 12 months to 20+ years depending on the lenderthe average boat loan is between 2-15 years. Boat loans, unlike home loans, are typically going to be less than $100,000 which means the payoff period will be shorter than say a 30 year mortgage. However, you can still get a great rate below 4% with great credit and can hit the water sooner than you thought possible!
The rule of thumb when obtaining a boat loan is the more money you borrow, and the quicker you can pay it off, the better your rate will be. For example on the low end, if you borrow $10,000 on a 5 year loan you will be paying a much higher interest rate than borrowing $100,000 on a two year loan. Why? It basically breaks down to your lender maximizing cash flow while also minimizing risk. In order to obtain a $100k loan, the bank knows your credit and ability to pay it back is higher than borrowing $5000 over two years.
The Best Boat Loans Of December 2021
The best boat loan depends on your budget, the type of boat you’re purchasing, and the age of the boat. From financing for small ski boats to full-size yachts, there’s a loan out there for most things that float. But they’re not all the same.
Once you’ve narrowed down the type of boat you’re interested in buying and what model year you’re looking for, you can start shopping for a boat loan. Many lenders will only finance certain types of boats, or require a boat to be newer than a certain model year. To make sure you make the most of your shopping, know this going into it.
There aren’t as many lenders offering boat loans as there are auto loans. But there are still a few to choose from.
Here are Insider’s top picks for boat loans in December 2021.
Types of boats financed: LightStream doesn’t list any specific requirements
4.29% to 11.89% with AutoPay
Loan amounts available: $5,000 to $100,000
Watch out for: High credit score requirements. LightStream only works with borrowers with good or better credit, so anyone with a low credit score may not qualify.
LightStream boat loans are a strong option for most borrowers looking for an inexpensive boat and fast funding.
LightStream is an online lender backed by Truist . With a completely online experience, same-day funding available, and many loan types offered, LightStream is one of our picks for the best RV loans and best personal loans.
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What Is The Best Place To Get A Boat Loan
You have two options on how to search for a boat loan: in person at a boat dealership, or online.
If you’re looking to buy a loan from another individual also called a private party purchase searching for an online boat loan is likely your best bet. Online lenders will often allow borrowers to purchase boats from either a private individual or through a dealership. It’s a more flexible option that may open the possibilities to include more affordable, used boats.
Which Houseboat Financing Option Is Right For You
According to Raney, the first step in buying a houseboat is truly understanding your purchase.
The first thing buyers need to be aware of is what exactly they are buying, he said, from the type of materials the boat is made out of to its condition under the water, and even whether youll own the space where it will be docked. From a financing perspective, he also mentioned that the biggest question is What exactly is it, and how does the municipality view it?
Here are some other things to consider:
- Not the usual lending requirements: Getting approved for a houseboat loan is about more than a credit score. Lenders are going to pay more attention to liquidity and your history with other assets. I dont think there will ever be a first-time homebuyer option for a houseboat loan, said Raney. Im looking for income, and a secondary asset as a source of repayment. For houseboat loans, its more about your overall financial picture.
- Buy a slip with the houseboat: Including some real estate in your loan will sweeten the deal for lenders. In Seattles Lake Washington, expect to pay between $50,000 and $150,000 to own a slip, plus additional homeowners association fees. To a lender, that provides a little more assurance that is buying a home, Raney said. Otherwise, youll need to pay rent for a slip each month.
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How Long Is A Typical Boat Loan
A typical boat loan term length can be up to 5 years, depending on the financed amount. A higher loan amount can often mean an extended loan term sometimes up to 7 years. However, this is generally the maximum boat loan term available, and is also dependent on whether you qualify and are approved for it. Here at Nu-Age Loans, most of our boat loan terms are for up to 7 years . However, there is the flexibility to let you pay it off faster, if you wish! To secure your boat loan, youll also usually be required to place a down-payment of an up-front deposit of 0% 20% of the boat purchase value. Your credit score and credit history is also taken into account, with most lenders asking for a credit score of 700 or higher. Securing a boat loan with a lower credit score may still be possible however you may be required to pay a higher interest rate, or place a larger initial down-payment.
Online Boat Sales Team
Do you have additional questions? Maybe you are even ready to apply? Let us introduce the White River Online Boat Sales Team. As part of White River Financial Services, the Online Boat Sales Team can help TAHOE Boats customers to easily apply for great finance options, and even shop for a TAHOE boat at dealerships nearby. Theyre here to help at any stage of your shopping process!
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How Old Of A Boat Can You Finance
- Post category:Loans
Buying a boat can be exciting. For many, buying a used boat is more affordable than buying a used one. Yet financing a used boat brings with it challenges beyond those of financing new boats. The age of the boat that can be financed depends upon the value of the boat, the source of financing and type of loan.
Loans for boats can be obtained through several sources:
- the boat dealer
Most of these loans work similarly to car loans. The lender holds an interest in the boat as collateral. If you make all your payments, the boat is yours free and clear at the end of the loan term. If you default on the loan, the lender can repossess the boat and sell it to cover your loan. For that reason, lenders want to be sure that your boat will be worth at least as much as you owe on it throughout the life of the loan. This need on the part of lenders is a key factor in how old of a boat they will finance.
S In The Process Of Boat Financing
Shopping for a boat loan overlaps with the process of buying a new boat. Here are the basic steps:
Know and understand your financial abilities and your credit rating. Check your credit with the major credit reporting bureaus and correct any inaccuracies.
When you apply, be ready with tax returns and bank statements that show your financial ability to repay. Be prepared to submit those materials to speed up the review process.
Be aware of special use limitations. If you want to live aboard your boat, use it for commercial purposes such as charters or as a fishing guide or to cruise internationally, tell the lender. Not all lenders will loan money on a boat used for those purposes.
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How Many Years Can I Finance A Boat
If you’re wondering how long you can get a boat loan for, you’ll be happy to know you can finance a boat for many years. While lenders used to offer shorter boat loan terms, boats are now built better than ever, so lenders can use them as collateral for longer periods of time. As a result, lenders are willing to finance boats for more years, making boat ownership affordable for more borrowers.
Alternatives To Boat Loans
If you would rather not go the traditional route or your credit is challenged, there are other methods of financing your boat purchase. These include:
Home equity loans or lines of credit. Since these loans are secured by an asset your home you may be able to find competitive rates. At the time of publication, APRs for home equity loans and HELOCs of $25,000 could be found for 6%, slightly higher than the 5.59% APR for the same amount from Essex Credit. However, an advantage of a home equity loan is that rates are typically fixed. Be aware that if youre tapping the equity in your home for a pleasure purchase, be certain that youll be able to repay the debt, or you risk losing your house. Furthermore, you may find yourself paying pricey closing costs and other fees, though some lenders will waive these fees.
A typical home equity loan has terms from five to 15 years, which may be longer than you need for a relatively inexpensive boat. HELOC terms vary but may last up to 20 years. An advantage of a HELOC is that you only pay interest on what you borrow but interest rates may be variable. You can read more about home equity loans versus HELOCs. Remember that good credit is vital here you typically need a FICO score of at least 680 to qualify for either a home equity loan or a HELOC.
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Boat Loans: Understanding How Financing A Boat Works
Posted Date: 09/30/2019
While boat loans can differ from other forms of debt such as auto loans, the basic premise is similar. When financing a boat , there typically involves a down payment representing a partial amount of the purchase with the rest of the purchase price being borrowed. The purchaser then pays interest over a fixed term as the amount of borrowed money is paid back to the lender. As with any financing process, youll want to make sure that loan payments along with maintenance, storage, insurance and other operating expenses fit within your overall budget.
Boat loans can come from banks, credit unions, boat dealers and specialized marine finance companies. By working through Tom George Yacht Group, financing a boat becomes much simpler as the entire process is handled under one roof. In this article, well help you better understand boat loans and how financing a boat works.
Other Lenders We Considered
- US Bank: This lender’s loan interest rates weren’t the most competitive, starting at 5.24% for a new boat. The bank states that rates may be higher for private party boat purchases, loans under $25,000, and used boats. Ultimately, lower rates may be available elsewhere.
- USAA: USAA is only available to people with military affiliations, limiting the number of people who can access these loans. However, even those eligible could get a better rate from one of our top picks interest rates start at 5.25% with USAA, about a percentage point higher than a LightStream loan.
- Navy Federal Credit Union: Like USAA, membership with this credit union is only available to certain people. However, a starting interest rate of 5.95% for new boats and 7.45% for used boat loans mean there are better deals to be found elsewhere.
- Boat US: This online boat loan marketplace didn’t beat interest rates offered by other lenders. A high minimum loan amount of $25,000 also may be more than many borrowers need.
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Using Boatsetter To Help You Decide
In addition to helping you try out the type of boat you may want to purchase, Boatsetter can help you get an idea of how much your dream boat is going to cost you. One of the best ways to experience a luxurious boat is to rent it out with a few friends. If you split the costs, youll get a reasonably cheap day out on the water, and youll get a better idea of whether or not you want to shell out the big bucks and buy a boat of your own.
How To Originate Mortgage Loans
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The Difference Between A Floating Home And A Houseboat
Youd think theyd be the same, a floating home and a houseboat. But while the terms sound interchangeable, there are some big differences.
Floating homes: Floating homes are exactly as they sound they are full homes that have a floating foundation. Theyre not meant to be moved, and theyre more permanently moored to their space than their houseboat counterparts. Theyre also often more spacious and luxurious in Seattle, floating homes have sold for $700 per square foot or more, according to local real estate agents. Common in other countries including the Netherlands, where there are districts of floating homes theyre catching on in a smaller way in U.S. cities such as Seattle and San Francisco. Floating homes have even been proposed as a solution to rising sea levels and increasing numbers of natural disasters, according to the National Association of Realtors.
Floating homes may qualify for floating home mortgages which resemble traditional mortgages, including a possible tax deduction on mortgage interest. According to broker Kevin Bagley of Seattles Special Agents Realty, floating homes mortgages often come in the form of 10-year adjustable rate mortgages. In terms of taxes, youll pay property tax, just like a traditional home. Its also likely youll pay homeowners association fees, particularly in a marina that owns your homes berth or slip and any parking or other common areas.
Heres a look at your options:
Are There Any Zero Down Loans For Boats
Zero-down lending is possible but will take a special lender and an exceptional borrower profile, and it will definitely translate to higher monthly payments. Most boat loans are for 15 or 20 years and often there is no penalty for pre-payment. Longer terms mean lower payments but also more total interest paid.
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