Go Fast Boat Finance 101 (in 2010, at least)

[DaveP]

Dave right about the 401s or SEPs plus you get the tax savings.Question my employer is a corporation that I own so I file with W2s plus a bonus its all on the tax return so in todays market would I have a problem?Above 800 score and not a lot of debt.Not looking right now but hopefully next winter.

Tim - being self employed and a W-2 earner + bonus is the best way to go. It shows great stability in your business and the income of your business.

[JupiterSunsation]

I would recommend to any seller to find out early if your buyer needs financing or not. This will prevent the seller's time being wasted on someone who would never qualify.

You have no idea how many people go into boat dealerships, multiple trips, finally go to contract and then fillout a credit app and the dealership finds out that they have a 500 credit score.

Also - the size of the deposit shows how committed the buyer is.
He gives you $100 or $500............
He gives you $2500 - $5000...........he is serious!

Latest guy put down 10% (17K) in broker's escrow acct.......still trying to close the deal....

[showtime83]

The first time I tried to get a loan I was denied because of lack of credit, that was almost 4 years ago. I purchased the boat cash instead. I am now looking at center consoles, called the bank for a laugh, I couldn't believe it when they told me they would loan me the money, times are tougher now, I have not established any more credit. I don't understand it??

[DaveP]

The first time I tried to get a loan I was denied because of lack of credit, that was almost 4 years ago. I purchased the boat cash instead. I am now looking at center consoles, called the bank for a laugh, I couldn't believe it when they told me they would loan me the money, times are tougher now, I have not established any more credit. I don't understand it??

You may have not opened additional accounts but the accounts that you do have, now have 4 years of history. That is a plus.

Maybe when you originally applied the accounts that you had open were relatively new (less than 36 months)

[Big Time]

Of course it is illegal and of course it is grand theft. However, that doesn't help the bank when it's stuck with an engine-less, drive-less repo boat. Like insurance companies, banks look at historical data. That kind of stuff just doesn't happen with runabouts and cruisers. But it does happen with performance boats, enough so that banks consider them risky as collateral.

Let me just play devil's advocate here....let's say I bought a boat for 100k, put 50k down and financed the other $50k. I stop making my payment, the bank comes to repo the boat and it is less engines. Couldn't I argue that the value of my boat is worth more then I owe, so I am entitled to the engines?

P.S. Don't bother breaking down the numbers and telling me there is not a hull worth 50k...I'm talking in theory here.

[DaveP]

Let me just play devil's advocate here....let's say I bought a boat for 100k, put 50k down and financed the other $50k. I stop making my payment, the bank comes to repo the boat and it is less engines. Couldn't I argue that the value of my boat is worth more then I owe, so I am entitled to the engines?

P.S. Don't bother breaking down the numbers and telling me there is not a hull worth 50k...I'm talking in theory here.

Nope - the customer is contracted to pay the loan amount in full and is also is contracted to keep the collateral in good fully operational condition less normal wear and tear.

[Big Time]

Nope - the customer is contracted to pay the loan amount in full and is also is contracted to keep the collateral in good fully operational condition less normal wear and tear.

Going back to my example...bank repo's the boat and gets $60k at auction, $10k more then the financee owed to the bank. Does the bank make off with that $10k or is there some sort of "make-whole" process?

[DaveP]

Going back to my example...bank repo's the boat and gets $60k at auction, $10k more then the financee owed to the bank. Does the bank make off with that $10k or is there some sort of "make-whole" process?

Any overage of sale goes back to the owner less any fees that were incurred with the repo, prepping, listing and auction fees.

[Big Time]

Any overage of sale goes back to the owner less any fees that were incurred with the repo, prepping, listing and auction fees.

Gotcha, thanks Dave.

[Expensive Date]

Hey Dave not for me but others might be interested.Is there a way to pre qualify someone without running the credit.Like with a credit score from one of the sites.That way the buyer or seller has a general idea if financing is even possible.

[DaveP]

Hey Dave not for me but others might be interested.Is there a way to pre qualify someone without running the credit.Like with a credit score from one of the sites.That way the buyer or seller has a general idea if financing is even possible.

No - unfortnately not. The score that the banks pull will definately be different than all of the online services. Plus the bank's report has additional information that is important to the bank but not necessarily for the consumer.

[Expensive Date]

Ok

[DaveP]

Tim - there are questions that can be asked to see if someone would qualify even before the credit report is pulled.

Those key questions are:
1) How much overall credit card debt if any?
2) Any late pays in the last 7 years?
3) Ballpark idea of the person's credit score?
4) How much did the person make last year and showed on their taxes?
5) What does the person's current total monthly bills add up to? (mortgage, ccards, car payments)
6) How much in liquid assets does the person have?

By getting the answers to those questions even before we pull the credit report I can have a real go idea if someone would qualify or not.

[Expensive Date]

I always love when I ask my customers how there credit is...and they tell me clear.I just claimed bankrupcy.