Sailboat Financing

So, you have a dream of owning a beautiful sailboat and spending all your free time quietly enjoying the peace of the intercoastal waters. You can feel your hand on the tiller and smell the change of wind. You want to be the owner of your boat.

Your dream has led you to locate your boat and you want to sail it now. To do this, most people must find financing. He really wants to find the best financing offer to make his dreams come true.

Sailboat financing has a lot in common with financing a new home. You can go to the offices of the traditional broker without an appointment or you can get an electronic loan. It pays to shop around just as you would with home financing; rates, terms and service vary. All loans are not the same.

Sailboat insurance is another thing to consider when you make your new purchase. Some lenders may also provide insurance. But once again, compare rates and coverage with various companies before committing.

Sailboat loans usually range from ten thousand to ten million. Ideally, you’d like a loan with no points, no prepayment penalty (if you pay off your loan early), and a simple fixed rate of interest. Then ask what your payments would be for different terms, such as 10 years, 15 years, or 20 years. You may find that the payment on a 15-year loan is not much higher than a 20-year loan and would be paid off 5 years sooner. Some lenders will also help you with Coast Guard paperwork if needed and may offer some discounts along these lines that will save you money.

In general, you can expect to need at least a 10% down payment. If your credit is not as strong, you can expect to need a larger down payment. Just like buying a home, you can get a better interest rate if you can put down 20%. Some lenders have a minimum loan amount. This is usually in the $10,000 to $15,000 range.

There will also be a closing cost associated with obtaining financing for your sailboat. As you shop for rates, be sure to also compare each lender’s closing cost rates. There may be lender fees and value-added service fees, such as Coast Guard documentation if required, fees associated with titling and registration. Be sure to compare apples to apples when it comes to closing cost expenses.

If you already own a sailboat and have equity in that boat and need cash to upgrade the boat, you can also do a “cash out” refinance with a boat lender.