Gone are the days you had to carry cash to buy your dream boat. Today, there are many options you can use to finance your dream. If you are in the market for a boat, this post will look at the financing option you have. First, it is important to involve boat surveyors Fort Myers trusts to know if you are buying a good boat and if the selling price is fair. With that out of the way, here is the information you must have when working with lenders.
Marine mortgages
When you need financing for a new boat, your best option is a marine mortgage. Many lenders offer this type of financing to purchase new and used boats. These lenders have varying criteria on how they qualify applicants. A common trend is requiring buyers to provide a marine survey. This is done by boat surveyors Fort Myers depends on. The surveyor will determine the fair market value of the boat and document all the issues the vessel has. This report helps lenders to determine how much to give you.
Down payment
Lenders will most likely require you to pay a deposit. You have to calculate the deposit in the initial cost. The deposit is usually 15 to 20 percent of the loan amount. However, the amount will depend on the size, age, and type of boat you are buying. Making a higher down payment will help you qualify for lower interest rates or shorter loan terms.
Loan term
The average loan term for a marine mortgage is 10 years. This can vary. If you choose a shorter loan term, your monthly repayments will be higher. It is always good to finance your boat at the lowest term possible. You must, however, make sure that the monthly payments fit your budget.
Interest rate
Just like with home mortgages, marine mortgage providers will allow you to choose between fixed-rate simple interest loans or variable rate loans. Although a variable interest rate might appear to be low, keep in mind that it can change, and you end up paying higher repayments. Fixed-rate simple interest loans are thus considered to be less risky. Again, make sure you understand how long the rate will remain fixed. Although interest rates change frequently, you can expect to pay a rate of between 3% and 8% APR.
When seeking financing for a new boat, the best thing to do is to choose a lender carefully. Make sure you understand the loan terms precisely before you commit.