We are asked regularly about the opportunities for receiving credit in the marine industry. The loan process is relatively simple. We will be happy to refer you to a loan specialist who will assist you and provide good counsel to you based on your credit application and credit score. Some of the questions we are asked regularly are below with helpful answers.
1. Have the problems in the residential mortgage industry affected credit in the marine industry?
Although credit has tightened, it is still available and lenders are becoming more and more aggressive in competing for good boat loans.
2. What is a "credit score"?
Each potential borrower has a credit score which reflects the level of risk associated with lending to that borrower. The higher your credit score, the easier it is for you to obtain credit. Sounds easy; however, certain business transactions or decisions can negatively affect your credit score. For example, these might include recorded late payments, judgments or collections, high debt to income ratio, inquiries into your credit, etc.
3. What affects loan rates and why?
Rate changes are usually based on a number of factors associated with the bond market. Factors that can affect the bond market might be breaking financial news, world events, stock market movement, and even supply and demand of marine loans.
4. Should I determine if I can qualify for a boat loan and at what level before I begin looking for that perfect boat for my family?
If you are planning on financing your next boat purchase, it is recommended that you determine if you can qualify for a marine loan and at what level before starting your search for that perfect boat for your family. We will be happy to refer you to one of many professional loan specialists that work closely with us. Based on a simple credit application supported with some basic financial information, they will be able to quickly inform you if you can qualify for a marine loan and at what level. Prequalification for credit makes your boat search a pleasant experience and you and your family can be in that boat in no time!
5. After my credit is approved, what are the next steps?
Your yacht broker will help you find the perfect boat meeting your family's requirements and budget. When you have determined what boat you wish to puchase, a Purchase and Sale Agreement is prepared and submitted to the Seller with your offer supported by an escrow deposit. After the Agreement is successfully negotiated, the next step is securing a qualified, certified Surveyor(s) for your survey, sea trial, and /or mechanical inspection. The Survey Report is submitted to your chosen lender and insurance company for approval to insure that the appriased value of the boat is in line with the negotiated Agreement.
6. How does a Surveyor(s) determine a boat's value?
A certified Surveyor(s) determines boat values by using several available comparative sources, such as ABOS Blue Book, BUCPRO Value, PowerBoat Guide, NADA, Sold Boats, as well as current comparable boats on the market. These values are integrated into a "Recommended Current Market Value". As you can see, there is no set formula. However, the Surveyor(s) recommendation is to give you, the Buyer, as well as the lending and insuring companies, an understanding of the value of the boat to ensure that the asset is not grossly over valued.
7. What is an escrow account?
Fillingham Yacht Sales Escrow Account is an insured, bonded account, licensed with the State of Florida. It is your protection to ensure that your escrow deposits and funds to purchase your boat are safe and available at Closing. Your funds are available at all times upon demand.