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The Loan Underwriting Process
The boat loan decision process is quite simple and straightforward. There are two major aspects that are examined; You and The Boat.
- Your credit history will be reviewed for continuity and satisfactory repayment of present and past credit obligations, looking for loan amounts comparable to your request.
- Another important factor is debt to income ratio. The lender will look at present monthly obligations and add the monthly payment for the boat loan (they also may add presumed operating and maintenance costs of the boat) to determine your monthly debt. This is compared with current income as stated on the credit application or verified in the tax returns. Your net worth may be considered for stability and as a secondary source of repayment.
- When it comes to "the boat," the lender will verify that the selling price reflects a realistic market value of the vessel, your down payment meets their guidelines and is in line with your credit profile.
- The lender will research the market value of your boat through various sources that include price guides, comparable boats on the market, and discussions with dealers or yacht brokers about the boat. A marine survey by a professional marine surveyor is often required.
Content courtesy of National Marine Bankers Association