THINGS LENDERS CONSIDER WHEN EVALUATING YOUR BOAT
Lenders have very different guidelines for the boats and yachts they will finance and the amount of financing they will provide. The lender will consider the age of the boat, the book value or MSRP of the boat, and the condition of the boat, among other things. The amount the lender will advance is called the "maximum loan to value ratio" - Maximum LTV.
Lenders usually require 10% of the purchase price or more as a down payment. However, some lenders offer “no money down” programs for customers with excellent credit and loan requests under $50,000.
Marine lenders usually use NADA or BUC to determine the value of the boat. A formula is used to determine the maximum finance-able amount. Some lenders will take extras, such as generators, electronic equipment or attached fishing gear into consideration, while others will not. If you are purchasing a boat for which you are paying a “premium” because of desirable upgrades such as re-powering, redecorating, or other great features, be sure to tell your marine loan consultant.
The age of the boat should be discussed before you apply for a loan. Many lenders have “cutoffs” and will not finance boats over a certain age—for example, 15 years old. Other lenders realize that there are great older boats and are happy to finance these boats for qualified customers.
Sometimes the lender will require a survey to ensure that an older boat
is in good condition. We almost always recommend that you obtain a survey
for your own education and protection during the boat buying process.
The surveyor is your contractor (not the seller’s or the lender’s)
and will advise you on the condition and any repairs the boat may require.
There are two nationally recognized associations for surveyors - SAMS
and NAMS. Visit
their web sites for a list of members and details about the survey process.