![]() ![]() So, you’ve picked out your new (or new-to-you) boat and are ready to buy. This proof can often be in the form of an employment offer letter, recent pay stubs, W-2 or 1099 tax forms, or even previous years’ tax returns. This lets the lender know that you are gainfully employed and have a source of regular income to pay for your new boat. You’ll need to show proof of employmentĭepending on your net worth and other assets, you may be asked to present proof of employment when applying for a boat loan. Most boat lenders will expect you to have a DTI of 30 to 35 percent or lower, though the exact number can vary. If you bring home $15,000 per month but have other loans with minimum payments totaling $8,000 per month, you have a DTI of just over 53 percent. The higher your DTI, the more risk you represent to a lender and the less likely you are to get approved for your new loan. Your debt-to-income ratio, or DTI, is a measure of how much you make compared to your existing debt obligations to other lenders. You’ll need to meet debt-to-income requirements Ensuring that you make enough money can show that your new loan payment won’t create an undue hardship. You’ll need to meet income requirementsĪ boat is a significant financial decision, and it stands to reason that your lender will want to be sure that you can afford the commitment.īased on the specifics of your boat purchase, your credit score, and other factors, your lender may also want you to meet certain income requirements. So having a healthy credit score can cost you less in the end. In general, the best boat loan interest rates and terms are typically reserved for more creditworthy applicants. Your co-borrower, also known as a cosigner, is someone who agrees to share financial responsibility for the boat loan until it’s satisfied. If your own credit score doesn’t meet this requirement, or you want to qualify for even better loan terms, you can also opt to add a creditworthy co-borrower to the loan. Here at Trident, we require that your credit score be at least 600 or higher to be approved for boat financing. The minimum credit score requirement can depend on the lender and certain details of the loan. This creditworthiness - which hinges largely on your credit score - can indicate that you are likely to repay your new boat loan on-time and as agreed. You’ll need to be creditworthy (or have a cosigner who is)īefore a lender is willing to approve you for a new boat loan, they want to ensure that you are creditworthy or that you have a history of managing your financial accounts responsibly. Not sure how much you can afford? Use a boat loan calculator to check what your monthly payment might be or get an idea of the total loan amount you could afford. ![]() Your lender will cover the rest with your loan. In general, though, you can expect to put down somewhere between 10 and 20 percent of your boat’s total price. The down payment requirement for your new boat loan can vary based on your boat’s age, size, type, and even purchase price, as well as your own credit history. This comes in the form of a down payment, or a portion of your boat’s purchase that you’re expected to put up in cash. While your lender will provide the bulk of the funds required for your new boat purchase, you’ll still be expected to have some skin in the game. In general, though, here’s a look at what you’ll likely need in order to get approved for a new boat loan and complete your purchase. The exact requirements for boat financing can vary from one lender to the next, and may even differ depending on the boat you choose. Also, depending on the lender you choose, there may be limitations as to how old or how expensive your boat can be while still qualifying for financing. With a boat loan, your lender will buy your boat from the seller for you, allowing you to use and enjoy the boat while you repay that loan over a period of time.īoat loans are available to qualified buyers who meet certain financial requirements. Similar to a home mortgage loan or auto loan, a boat loan is an installment loan that is used to fund the purchase of a new or used marine boat. ![]() Buying a Boat: What it Means to Finance Your Purchase If you’re ready to set sail, learn how we do boat loans at Trident Funding. Unless you have the cash on-hand to buy your new boat outright, though, you’ll need to finance it with the help of a boat loan. The decision to buy a boat can be one of the most exciting financial moves you make, whether you’re buying a weekend fishing boat or purchasing your dream yacht. ![]()
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