Financing Your Dream
Boat

Tis the season, boat show season, that is. As sure as the leaves turn and geese migrate, fall means boating enthusiasts will be walking the docks and combing the aisles in search of the next love of their life. For many, walking the show will be followed by dialing for dollars.

Is the world of yacht financing in the same dire straights as the residential mortgage market?

“Yes and no,” says Lang Ryder of Seacoast Marine Finance. “There is still plenty of money available to lend, yet every lender is under much closer scrutiny so there are less exceptions for marginal borrowers. There’s no question that the market is challenging.”

While potential boat buyers will likely see many such offers this season, Don Parkhurst of Suntrust Bank says, “People shouldn’t opt for adjustable or variable rate boat loans. The recent problems with mortgage lending have shown us the dangers of adjustable rates. People get squeezed when they can least afford it. Imagine if both your home loan and your boat loan are adjustable. You would have little control over the monthly payment cost of what are likely your two biggest expenses,” he said. “Balloon loans deserve the same caution. You have no way of predicting the economic situation in three to five years when the balloon comes due. You might have to sell the boat if you are unable to refinance or pay the balance.” ...

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