*****March 2023 - Rates are still on the rise - the Fed just announced another increase and one of our banks has decided to no longer write marine loans and CREDIT SCORE is now more important to your rate than ever before *****
I understand that everyone wants the best boat loan rates possible, and I do my best to get you there. Let me see if I can lay this out in a way that makes sense.
Rates are not a single waypoint. They are a route that has to be planned.
Have you ever navigated an inlet where the buoys are not exactly right?
Local knowledge is KEY in that situation, right?
It isn't a terribly long read so stick with me.... (I Address CHARTER purchases here)
Each boat loan “costs” the ban the same to write, whether it is $8000 or $800,000. So, the more you borrow, the better your rate is likely to be. Each of our 14+ banks publish a rate sheet and guidance for us to go by with their base rate and discounts.
The deciding factors on rate (generally) are as follows-
Amount Borrowed, Credit Score, Debt to Income, Payment to Income, Down Payment and Length of Loan. SOMETIMES the age of the boat comes into play. We can write boat loans on vessels up to 20 years old, with a few banks allowing boats over 20 years on an exception basis. (Click the blue links to get more information on how these are calculated)
The Amount borrowed is the first determining factor in what your rate will be. This varies by bank, but below is a fairly good representation. (Scroll down to the next section for examples)
In general, rates follow this pattern - There are a few changes depending on bank.
8k to 25k is one base rate - 26k to 49k is another base rate
50k to 99k is another base rate - 100k to 150k is another
150k to 500k is another - And 501k to 2mil are another base rate.
Credit scores and Debt to Income ratios are the next determining factor.
Scores over 800 get a discount from the base rate. As Fed rates increase and bank get a little more skittish, Credit score play an even larger role. The "Spread" between scores tighten up.
Normally we see scores from 760-799 offered the base rate, and scores from 680-759 gets an ADDs to the base rate. However, in our current market we are seeing bank ADD to the rate for scores between 780 and 760, then again between 740 and 759 AND AGAIN for scores 720 and 739. This is not exact and varies by bank, but you get the point. You are usually rewarded for your diligence. Debt to income varies, but a 40% dti including the new payment is a good target. Confused about credit scores? Jump over to my "USEFUL ITEMS" tab to learn how we work. Need to calculate your debt to income? Use the "Calculators" tab.
COMPARABLE CREDIT HISTORY- Never heard this term before? It's OK, that's what I am here for. Comparable credit history simply means- Have you borrowed this much money on an installment loan before? Think of this as JOB history for loans. As an example. banks do not love to loan $100,000 to someone that has never borrowed $75,000 before. Boat lending is considered Luxury Lending, and it has some luxury rules that aren't applicable in home and auto lending. Now, there are circumstances that this can be overcome with LIQUIDITY. But we should chat about that in person. ****Update 10/2021**** I now have a bank that does not consider "previous comp credit" - they offer loans starting at $75k and up! They do NOT offer "Stated Income" loans. ALL loans will require 2 years taxes.
Next, it's Down payments. Here is where it gets a little confusing. Down payment requirements can be all over the place from bank to bank. Sometimes, a 10% down 20 year term is a better rate than a 15% down 15 year term. As a general rule, We do NOT offer any 0% down loans. Down payments range from 5% to 20% or more, depending on lender and program. Want to know how much boat you can buy with your current Down Payment that you have saved up? Jump over to the "Calculators" tab.
Length of loan- TERM (This is the least used discount, since the others come into play earlier) 10-12 year loans CAN get a discount, depending on the other factors above.
15 and 20 years are typically even. Most of our loans do NOT have any prepayment penalties.
Age of vessel usually only comes into play when they are over 15 to 20 years old, where some lenders will add on .25 to .50%. In general we do not offer loans on vessels over 20 years old, but there can be exceptions. We offer loans through several different banks, and each one has their sweet spot. Some are more forgiving of down payment. Others are more sensitive to credit history.
If you are still with me, bravo! I know that this is a lot to take in. My job is to consult with you and place you with the lender that best fits YOUR credit profile. It is my mission to connect you with the right program to meet YOUR goals.
Most of our lenders do NOT normally require income documents for loans UNDER $150,000 UNLESS you own greater than 25% of your business. Over $150,000 and the owners of LLCs and Sole proprietorship's will always be required to show income verification, usually 2 years taxes.
These can be tricky to navigate as many banks have VERY DIFFERENT rules on Refinances.
ReFis STARTING at a balance of $25,000 are available. There are some very specific guidelines for these as to what we can and can not do. Some of our banks offer balance only and some allow for cash out! Lets chat about this and see what fits your needs.
This is a general rule for loans this size. This is in NO way a guarantee or rate lock. This is for reference only
10, 12 and 15 year terms, Down payments 5%* and up. 10% is a good rule of thumb.
LIGHTSTREAM is a GREAT choice for these if you can take a shorter term. (Click the blue link)
This is a general rule for boat loans this size. This is in NO way a guarantee or rate lock. This is for reference only. THE RATE BELOW ASSUMES EXCELLENT CREDIT AND MAY CHANGE AS MUCH AS 3% DEPENDING ON YOUR SCORE
10 ,12 and 15 year terms, Down Payments from 10%* and up. 10% is a good rule of thumb.
This is a general rule for loans this size. This is in NO way a guarantee or rate lock. This is for reference only. THE RATE BELOW ASSUMES EXCELLENT CREDIT AND MAY CHANGE AS MUCH AS 3% DEPENDING ON YOUR SCORE
10, 12, 15 and 20 year terms. Down Payments from 15% up
This boat loan size has a few sweet spots in it around that $50,000 mark. A few of our lenders make a big rate drop here. Some as much as a full point. I will help you navigate that.
Once we go over $150k the rates vary too widely to publish here. As a general rule, it follows the same pattern as the rest. These get a little more complicated as each banks guidelines diverge greatly. I will help you navigate through this. THE RATE BELOW ASSUMES EXCELLENT CREDIT AND MAY CHANGE AS MUCH AS 3% DEPENDING ON YOUR SCORE
A few of our lenders will stretch out to 30 year terms for the right vessel and situation.
All of these rates are estimates and in NO WAY are a guarantee. These are for information only, although I try to keep them current.
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