Boat Financing

Anyone try to get a boat loan lately? Six months ago I got approved to buy a $450,000 dollar house and keep my current one. I was trying to buy a $70,000 dollar boat, while putting half down and had to give blood in order to get it. Our household income is over a hundred thousand a year and my credit is in the 700's while my wife's is 810. I couldn't believe it. Just curious if anyone else as experienced this.
Thanks,
DD

It might be your debt to income ratio. I have seen people who have high credit scores (above 750) that could not get approved without large down payments because their debt to income was too high.

Typically boat and recreation loans are some of the most defaulted on loans. Most people would rather lose their boat or RV before their house. And it is easy to get in over your head when it comes to these toys, the prices can add up quick.

DTI used to get completely blown off if you had a high score...now every bank looks at it waaaayyyy closer than they used to.

Yea, definately DTI. Making even $150k/yr with $450k mtg when you add it car payments and such is spreading pretty thin.

My mom owns a Chrysler dealership and she was saying that even to get a normal car loan she has to get income docs from people.

Do you know what debt-income ratio they are looking for? Under 40%?

I'd say under 40% is standard.

With decent reserves and FICO FannieMaie (Home Loans) will allow for up to 65% DTI, FHA can go up to 55%, and most banks require no more than 45% for Home Equity products.

(I'm a home loan officer, but I know when I got my boat financed the banker I worked with mentioned their max DTI was 40% or so)

I owe $80,000 on a $350,000 dollar home and have no car payments and $2800 owed to credit cards.I also have a portfolio worth over $500,000. I would have thought I was an underwriters wet dream. I am just saying if it was hard for me how is it going to be for others.

DTI under 35% and 720-730+ score.. 10-20 Percent down.. With a few exceptions.. Great deals in our booth at the Seattle Show, Matt Brown is here if you want to come in and say hi!

DD,

Have you considered refinancing your house, taking the cash for your boat. Lower interest rate that way.

yep. Could have done that and will, just wanted to make sure that i had enough when I sell it to buy a bigger house.

^^^^^^^

Universally regarded as a poor decision...do not pull equity out of an appreciating asset to finance a depreciating asset.....IMHO

Meathead is spot on. I would not do that if I were you. Don't you already own a wakecraft?

who's house is appeciating?! lol

just pokin' fun. i understand the point.

My local credit union gave me a 6.5 rate on anything above 25k and with 15-20% down on a 10 or 15 year loan. She said the DTI needs to be below 50% and credit to be above 700. That doesn't sound so bad?

If you can get an home equity/line of credit loan then you can write off the interest of that loan since it is connect to your house. I am in the same boat as you DD, except I own my own business. My home is almost paid for (350K house), payment is about $600.00 a month. No car, CC, or other loan payments. But since I own my own business it was a struggle to buy a boat. So I bought it from my business account an the bank did not even give me the first trouble. So that is a tax write off for my business. I was going to use home equity loan, but I got a cheaper interest rate with the company.

As others have said, probably DTI. Do you know what yours currently is? These days lenders must have less than 50% and most want 40% or below.

I just purchased a new boat and financed 80% of it. My rate is 6.4% on a 12 year term. I had no problems getting approved by multiple lenders with rates less than 8%. After talking to five lenders 6.4% was the best I could get with 20% down. Most others were just above 7%. My DTI is 42% and my credit score is 710.

Credit score in the high 700s more than 2 times the loan amount in the same bank they still balked at a boat loan. So I just withdrew the money and payed cash. The lenders don't want to lend money I was told they are waiting for the rest of the bad loans to default.

Michael, you should have looked at other banks. Didn't you buy an 08 210? Paid cash for it? Impressive.

It may have had to do with the value of the boat? What kind of boat were you trying to finance on?

I scored a 350 got a note through roadloans for 30years @ 28%. I put no money down and financed a 10K stereo on top of that.

Banks were glad to give me money.

50% down should get anyone above 700 a loan.

^^^^^^ please tell me that was a joke

28%, 30yrs on a boat, financed a stereo???? ummm I don't know if any of those things are wise financial decisions.

Ok I only put 40% down