On The Shore On The shore — 02 October 2015
Seven tips to help finance a dream boat

By Robyn A. Friedman

Is this the year you’re going to take the plunge and invest in that schooner, center console or yacht you’ve been eyeing? Then we have good news. Not only will many of the dealers at next month’s Fort Lauderdale International Boat Show be offering incentives, but with interest rates low, it’s a great time to get a boat loan.

“It’s not difficult to get a boat loan if you’re a qualified borrower,” says Melanie Jolles, a yacht-lending specialist at BankUnited in Fort Lauderdale.

Applying for a boat loan is similar to getting a mortgage, experts say. You need to have good credit, sufficient income to support the payments and a down payment.

Julio A. Santana, southeast region manager of Trident Funding Corp., one of the nation’s largest originators of yacht and boat loans, says that for loans under $100,000, lenders typically require 10 percent down; for loans over $100,000 the down payment is usually 20 percent.

If you’re in the market for a boat loan, here are some tips:

Clean up your credit. Past due accounts, liens and other blemishes don’t look good when applying for any loan, particularly one for a luxury item.

Get prequalified. Not only will this tell you how much boat you can afford, but prequalification helps streamline the purchase process – and might make a seller more likely to negotiate.

Submit a complete packet when you apply. You’ll need tax returns, bank statements and, if you’re self-employed, a personal financial statement.

Buy a newer boat. “Some lenders will only do vessels that are 10 [years] or newer, while others will do up to 20 years,” Trident Funding Corp.’s Santana says.

Remember that some lenders have additional limitations. “Typically lenders will finance fiberglass or aluminum hull boats for recreational purposes,” says Lisa Rabinsky, a senior vice president at CNLBank in Boca Raton. “That means no commercial vessels, barges or dredges. Some lenders also have restrictions against high-performance boats.”

Consider the full cost of ownership. Rabinsky advises owners to budget for fuel, maintenance, insurance and docking expenses. “These can hold surprises for novice owners,” she says.

Get an inspection. Donald C. Parkhurst, a senior vice president with SunTrust Bank, suggests obtaining a marine survey on a used boat. “It’s like a home inspection,” he says. “They may be able to find defects in the boat that would go unnoticed by a potential buyer —such as the boat previously sunk or has other hidden damage.”

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