Will the problems in the residential mortgage industry effect the marine side?
While the experts initially hoped the subprime mortgage mess would be contained to a small segment of the housing industry, concerns are now being raised in other segments of the economy about the potential fallout. What is undoubtedly occurring is a general tightening of access to credit. It may become harder to purchase a house, yacht, or even get a credit card, due to higher standards for minimum credit scores in all areas. However, historically speaking it really has never been easier to get a loan for a boat for less. Many marine lenders are very aggressively competing for good boat loans, and have positioned their competing rates, as such. The lending process still is relatively simple and easy.

What is "credit score"?
Each individual has a credit score. This score reflects the level of risk associated with lending to that individual. Scores range from 400-800, with higher being better. Negatively affecting your score are things such as late payments, judgments or collections, heavy use of credit, high ratio of actual credit to available credit, and inquiries into your credit. Credit score plays a significant role in determining your ability to get a loan of any kind (marine, residential, or even a credit card).

How does an appraiser determine a boat's value?
Most appraisals are determined by a licensed yacht surveyor. He computes your boat’s value a few different ways, by analyzing other comparable vessels currently for sale, by analyzing comparable boats that have recently sold, and integrating these numbers with the "book value". While there is no clear science, the goal is to give the lending entity an understanding of the value of the boat, to ensure that they are not lending money on an asset that is grossly over-valued.

What is an escrow account?
An escrow account is set up at closing to pay your boat’s insurance, taxes (if applicable), and can also be a safe place to keep your deposit. Typically your yacht broker will have a legal escrow account you can safely use.

How often and why do rates change?
Rates don't necessarily change every day, but they can. These changes are based on a variety of factors, but mainly will correlate to changes in the bond market due to breaking financial news, world events, stock market movement, and sometimes supply and demand of marine loans.

What is APR?
APR stands for annual percentage rate. APR is the effective rate you will pay on your boat loan based on the interest rate and related closing costs. It will almost always be higher than the interest rate on your loan, because it factors in your "cost to obtain the credit". It is important to know, however, that your payment is based on your simple interest rate, not your APR.

What are "points"?
A point is 1% of the loan amount, and is a cost associated with closing.  If you have a $100,000 boat loan, a point is $1,000.

What comprises my monthly payment?
Your monthly payment for your boat typically includes principle, and interest.

What documents do I need to apply for a Boat Loan?
1) Income Documentation:

• Hourly or Salaried Employment - W2's for the past two years and paycheck stubs covering most recent 30 days
• Self-Employed - Typically most recent complete Federal income tax return with W-2.
• Retired - Original Social Security Award Letter or Pension Award Letter.