Typical process questions

boatman37

Well-Known Member
Jun 6, 2015
4,211
pittsburgh
Boat Info
2006 Crownline 250CR. 5.7 Merc BIII
Previous: 1986 Sea Ray 250 Sundancer. 260 Merc Alpha 1 Gen 1
Engines
5.7 Merc BIII
So we have have been discussing upgrading to a newer/bigger boat. Probably looking at about 2003ish boats and will be financing. We are very early in the process and will be selling ours first. Without knowing how long it will take to sell ours what would be the typical process? Get pre-approved first? It might be 6 months or longer before we are ready. My only concern is getting approved. We have great credit (around 750-760) and very good income but have quite a bit out in student loans. The kids are making the payments on those but they are in my name so will show up on a credit report. So with those I'm concerned about getting approved. I would hate to sell ours only to find we can't get approved then are stuck with no boat.

Getting pre-approved isn't a concern and would alleviate any fears but don't want to have to go through the process again if it takes till next year before we are ready to buy and have our credit dinged for multiple pre-approvals?

Advice?

Thanks!
 
I would not list my current boat until I knew I could get approved to finance the next one. Long-term boatlessness is no way to go through life :)

I think most banks will approve for maybe 45-60 days? Beyond that and it might be up to the bank whether or not they need to re-run your credit.

For what it's worth I think the bankers among is would consider 800+ to be "great credit". Mid-700's is pretty decent, but not blowing the socks off the creditors.

Someone smarter than me will surely be along to comment but I think student loans may be particularly hard on your credit. They survive bankruptcy and are pretty unique from a debt standpoint. I don't think it'll matter that your kids are paying unless they are also being included on your boat loan and have meaningful income that could be included.

I'm not a banker.....but I do have student loans :)
 
Yeah, them paying won't matter to the lenders as in the end I am responsible. They both have great jobs but the bank won't care about that.
 
Great jobs = tell 'em to refinance and free you from the bondage of student loans!
Yeah, that would be great. Not sure if they can or how though. He just started his job 2 months ago. She has been at hers for a few years. But that would be ideal. He is looking to buy a house in the near future so not sure he needs that on his credit either. Yeah it's his loan but he needs to get his own house soon too. If it is in his name then it might be 10 years before he can buy his own house...lol
 
I would think if you talked to a company that does boat loans, like Just Boat Loans, Essex Credit they could probably tell you what problems might be
 
I would think if you talked to a company that does boat loans, like Just Boat Loans, Essex Credit they could probably tell you what problems might be
Yeah. Probably call them Monday. In the meantime we went out for a long cruise today and when we got back wife said 'are you sure we should sell this? It is such a good boat'...lol
 
Called Essex today. Based on what they said I should have no problems. My credit score is quite higher than their minimum and the income/debt ratio is almost 1/2 of what they require. The only thing I didn't like was the 6.28% interest but will shop around when the time comes.
 
Called Essex today. Based on what they said I should have no problems. My credit score is quite higher than their minimum and the income/debt ratio is almost 1/2 of what they require. The only thing I didn't like was the 6.28% interest but will shop around when the time comes.

Whoa....my credit union locked me in at 3.99% for 15 years recently. You're getting hosed! Shop around for sure.
 
Whoa....my credit union locked me in at 3.99% for 15 years recently. You're getting hosed! Shop around for sure.
When we bought our current boat in 2015 I called 2 local credit unions. Both were around 10% for new boats and around 12% for used. I didn't even give them my name so it had nothing to do with credit. Apparently the credit unions around here don't want to deal with boats. Same with my local bank. I was in there about a year ago and know the loan manager. Asked her what rates were for boats and she said they don't lend for boats but do for PWCs.
 
Called Essex today. Based on what they said I should have no problems. My credit score is quite higher than their minimum and the income/debt ratio is almost 1/2 of what they require. The only thing I didn't like was the 6.28% interest but will shop around when the time comes.

The problem is that you are not financing enough ;) well, that's partially correct... Their best rate seem to start around 50K at up to 60 months. Then it ticks up 0.10% each bracket based on the term length. I am guessing that the figure some fixed costs into their calculation and need to make a certain amount of money. Hence smaller shorter loans are more expensive percentage wise.

Depending on your financial position it might be better to finance a slightly higher amount and pay it back on your own schedule. Looking at your case on Essex another $100 could possibly drop your 0.70% in the same term bracket.

In my case, within reason, I wanted as much financing that I could use over the longest term before rates were not reasonable. I rolled in all my expenses, taxes, etc and financed the difference (even though I could have put more down). We were placed with USBank and a 144 month loan - this loan will not last that long. I pay in almost 3x the amount and we are simply charged interest based on the open balance at the time. The 144 month allowed me a very comfortable base should for something unforeseen happen that I need to only make a bare minimum payment. I am also in an equity position on the boat so that should something dramatic change in life and I need to get rid of the boat I could do so, payoff the boat and bank the difference.

Everyone's situation is different and I always make a call to my accountant to review my choices to take tax implications into mind.

-Kevin
 
While I 'could' go higher I really don't want to. I pay a little over double on my current boat payment through Lightstream. At first I was making the minimum payments but for about the last 2 years I have doubled up. I would like to pay more than minimum on the next boat but if I finance more then I probably won't have that ability, at least not in my current situation (although I did just get my 3% annual raise yesterday...lol). If things work out like I think I should be able to pay it off in a few years.
My problem is the wife is a 'casual' boater and doesn't want to be on it every weekend so she has pulled in the reigns on what we are looking to spend and I am trying to stay under a certain monthly payment. If we were going to spend every weekend on it then that might change what we are looking for and ok with spending. At around $30k we are both ok with the payment and what we are getting. Don't want to get into a $75k boat that we use a few weekends a summer. To be honest if ours had a little better seating layout, windlass, walkthough windshield, pumpout head and A/C we would maybe consider keeping it. Those are our must haves for the next boat. If it had a few of those we would probably use it a little more than we do.
 

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