@import((homeheader))Yacht Financing FAQ's

Here‘s some helpful information on the process and terms of financing a yacht purchase.
  • Is it hard to get financing in today’s market?
    Rates vary from month to month and lender to lender. Many credit unions and marine lenders are very aggressively competing for good boat loans, and have positioned their competing rates, as such. The lending process is still relatively simple and easy. Getting a loan for a newer model yacht, in good condition is easier than almost any time in history.

    Every 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). A qualified mortgage broker can often assist you with any concerns you might have and Farallone Yacht Sales is happy to recommend one to you.
  • How does a yacht appraiser determine a boat’s value?
    Most boat appraisals are determined by a licensed yacht surveyor. He or she computes a boat’s value a few different ways: 1) By analyzing other comparable vessels currently for sale; 2) By analyzing comparable boats that have recently sold: and 3) By integrating these numbers with the “book value”, usually defined by NADA, or BUC. The goal is to give the lending or insurance company a better understanding of the value of the boat, to ensure that they are not lending money or insuring an asset that is grossly over-valued. Farallone Yacht Sales can offer you a list of highly qualified, professional hull and engine surveyors if you need a recommendation.
  • What is an escrow account?
    An escrow account is a safe place to keep your deposit, and any funds associated with a boat purchase transaction. Farallone Yacht Sales keeps a legal, totally separate escrow account you can safely use. Upon the close of a transaction, escrow funds are released per written agreements and Closing Statements, signed by both parties of the sale.
  • How often to boat loan rates change?
    Yacht loan 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. Check frequently to ensure you are receiving the most up-to-date rates. A small percentage point can make a big difference!
  • 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”. However, it is important to know that your payment is based on your simple interest rate, not your APR.
  • What are points?
    A point is 1% of the boat 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 boat loan payment?
    Your monthly payment for your boat typically includes principle, and interest. It can also include insurance if your bank requires.
  • What documents do I need for a yacht closing?
    Typically, to close you will need income Documentation like hourly or salaried employment – W2s for the past two years, and paycheck stubs covering most recent 30 days. If you are self-employed – typically you will need your most recent complete Federal income tax return with W-2. If you are retired, lenders will be looking for your original Social Security award letter or Pension award letter.
    • Assets: To verify evidence of sufficient funds for closing, the following will be required: Most recent original statement (all pages) for all checking, savings, or other asset accounts.
    • Yacht Contract: Provide copy of fully executed purchase agreement for the boat you want to buy, signed by you and the owner of the boat.
    • Other: Yacht Survey, Copy of Driver’s License or Passport