SEEKING OUT A LENDER
Ask your yacht broker what lenders are offering the best rates and terms. At this time, you can expect the lowest rates in recent history. Loans are now amortized over 15-20 years, require
20% minimum down payment and, fixed rates are from 6.4% to 6.75%.
Loans come in many different structures, no income verification, no down payment, extended terms (to 30 years), interest only, and adjustable rate loans.
Lenders do not recognize charter income as additional income to qualify for a loan. The Catamaran Group offers in-house financing through Bank of the West and other lenders are listed at the end.
EQUITY IN REAL ESTATE
If you have sufficient equity in some real estate then the cheapest loan is a real estate equity loan.
Marine loans generally have no points on the loan. They are all "simple interest" loans with no pre-payment penalty. If you know you will only keep the boat 2-3 years then the "out of pocket" expense is surprisingly low. Many yacht buyers have a three-year "itch cycle". That is, they keep a boat for three years, then they "get the itch" to sell it and try out another boat for three years. If your credit score is less than 600 then the situation may be difficult. Lenders mainly look at the debt to income ratio. Use only marine lenders, as most banks do not understand the yacht lending business and donít
lend for yachts valued over $100K.
Get pre-approved by a lender. It is FREE to get pre-approved. Here are a few companies to get you started in the right direction:
|Let Cindy Lewis of NewCoast Financial guide you through all of the options that are open to you with regards to marine financing. She is highly qualified to answer any questions you may have and help make your loan process hassle free. She is committed to ensuring that your loan is placed with a bank that best fits your financial needs.
Bill Green, International
Canadian and International Citizens can now access specialized financing options to buy U.S. boats from the world’s leading multihull retailers, The Catamaran Group.
In a special partnership between The Catamaran Group and Bill Green, a leading International Advisor, families outside the United States can now explore buying their
dream catamaran via Bill’s special relationship to some of the world’s top financial institutions. Bill recently spoke to Catamarans.com
about this new partnership.
If you know your income as shown on your tax returns will be not be at least 200% of your debts then ask for a "no-income verification" loan. Essex does these.
BANK CATCH 22
Many banks say they are "interested in yacht lending" but they are really only interested in finding that "one in a hundred golden borrower"... so you waste your time filling out forms only to be rejected if you donít have 110% perfect credit. Have a current copy of you tax return to fax them for a quick verbal approval before proceeding.
AVOID STAMP FEES
If you are traveling, sign your loan documents out of the state of Florida to avoid paying "State Document Stamp Fees" If you sign your loan paperwork in Florida you will pay a state fee of $3.50 per $1000 of the loan amount.
Loan interest payments are deductible as "second home mortgage interest expenses" unless you already take this deduction on a second home.
Concerning "seller financing"Ö It may be possible in a very few, very rare cases like with some "501- c(3)" charities. But you will need 40% down and are severely limited to only the boats they have taken in as donations (it will NOT be your dreamboat). Ask your broker what is available here. Because yachts can be easily moved out of the country, 99.9% of all sellers will not agree to seller financing.
FACTOR IN FOREIGN EXCHANGE RATES
Foreign currency exchange rates can have a substantial impact on the price of yachts.
You should be aware of how this can affect prices. In recent memory, the Euro was trading at .88 to the dollar; that is, one US dollar would buy .88
Euros. Now the Euro costs 1.26 dollars. So a yacht priced at 200,000 Euros used to cost $176,000 but now costs $252,000 (with a 1.26 rate)!
As you can now see, the dollar has really weakened against the Euro. So, Americans wonít be buying many European owned yachts as long
as the dollar remains weak. Foreign exchange traders say this is happening because Arab oil producers are afraid to hold dollars for
political reasons and they are now demanding Euros in payment for crude oil.
Also, the Arabs have dumped billions of dollars in savings
and bought Euros and Euro-denominated investments instead. So, the Euro is becoming the "currency of the world" and this trend will probably continue.
On the other hand, if you have Euros, you should be buying yachts owned by Americans and take them back to Europe for re-sale.
Dollar-denominated yachts are cheap for Europeans now.
We are standing by for your buyer's guide questions
WHAT TO DO WITH YOUR OLD BOAT
In many cases we encounter sailors' who own monohulls and have decided to improve their sailing lifestyle by trading up to a catamaran. The Catamaran Group, in some cases, will accept your boat in on trade for a new yacht. The Catamaran Group owns a monohull dealership in Florida that is our facility for liquidating trade-ins.
Esserman Yacht Sales More >>
WHEN TO MAKE YOUR BUYING DECISION
What is your time frame? Because of the popularity of catamarans often the builders are running about 6 months to 1 year out in production availability and delivery can range anywhere from 1 to 2 months. Tip. Plan ahead and start checking availability now.
The final step is to talk with a Catamaran Company yacht broker about what will suit your needs best. Do some research and check for reviews. www.catamarans.com Request detailed specifications and brochures. Choose options and upgrades and review a purchase agreement. To confirm your order and reserve a hull, expect a deposit of 10%, then 90 days before closing 15% is due, and at closing your final payment normally from your lender is due. You may also want to make an appointment to charter from The Catamaran Group base in the BVI or see the new yacht of your dreams. The Catamaran Group has new yachts on display at the major in-water sailboat shows and in inventory at River Bend Marina in Ft. Lauderdale, Fl.
NEW YACHT BUYING TIPS
Ask your dealer if there are any special discounts. Often boat show specials will be available before shows but, not after. Ask specifically if the builder has any unsold inventory or production slots. Ask if the dealer has any inventory they would really like to sell. Mention that you would be agreeable to have your yacht displayed at any up-coming boat shows. Often this opportunity will enable a new owner to enjoy their yacht in New England for the summer before their yacht starts chartering in the Caribbean.
PREOWNED BUYING TIPS
Because of the relatively high demand for cruising catamarans you will find the resale value of catamarans relatively higher than that of monohulls.
As with planning to own a new yacht you will first want to define for yourself the size yacht you want, number of cabins, your sailing plans, and budget. Be realistic, you wonít find a near new 50 ft. catamaran selling for $100K. Talk to your broker and ask what the selling prices have been running.
I recommend not buying "backyard projects" catamarans. I have heard hundreds of times, "This catamaran is built differently! It really is top-quality, etc, etc." and every time we went to survey we found some strange findings. Donít get tempted by the relatively low prices. You may end up with something you can never sell. Stick with well-known production yachts. You should look for and acquire models that are in demand and that hold their values well. Ask your broker what these models are.
CHECK OUT VALUES VIA THESE SITES
To check values of yachts and availability on the market:
If you find a yacht listed you like, ask your broker what is the worst thing about this yacht.
Armed with this insight there will be no surprises and your expectations will be realistic.
Now talk with a Catamaran Company broker and ask them to send you the latest list of catamarans on the market. Be clear with your broker about your needs. The more you tell them about how the yacht will be used, the more the broker can help guide you to the ďrightĒ boat. Often brokers in our network know of catamaran owners who are planning to trade up to a newer or larger catamaran that would be interested in selling their yacht but, have not gotten around to listing it yet.
Don't be afraid of high asking prices. Often these sellers have had little interest in their yachts and they have been on the market for some time. Why not make an offer? You have nothing to lose and you might be able to bargain the yacht you have been dreaming about. Learn to present an offer on a pre-owned yacht.
Ask your broker to first send you a blank copy of a Purchase and Sale Agreement to review. (There is an example of a Purchase Sale Agreement at the end of this guide for your convenience.) Consult with your broker about what they feel is a fair starting amount to offer. You can present an offer with a 10 % refundable deposit that is held in escrow. Next think about what date you need to hear back form the seller, the date by which you can sea trial and survey the yacht, and the date you will be ready to close (have all the funds ready).
OFFER FIRST, TRAVEL LATER
If the yacht you are planning to make an offer on requires you to travel to see, it is smart to get your offer accepted first, contingent
on your personal inspection. If you go to see this yacht and donít like it, your deposit is completely refundable.
However, if you like what you see, while you are there you can make good use of your time by moving forward with your sea-trial and survey.
Be advised that no sea trials or surveys can commence until a deposit has been cleared into the escrow account so this should be arranged in advance. This will save you from traveling to see a yacht you canít buy or has been sold before you get there. Your acceptance date is the date you agree have the sea-trial and survey completed and you feel confident your finances are in order. Seller pays the cost of the sea-trial and you pay the haul out/survey cost. Your broker can send you a list of recommended surveyors and arrange the haul out for you. Generally this can all happen in one day. At closing the final funds will transfer to the seller and the seller will transfer a clear title and documentation. This can happen through the mail with your broker handling the transaction. Before closing you will need insurance and a place organized to keep your yacht. Your broker can help make these arrangements for you and even, coordinate delivery if necessary.
SURVEYOR REQUIREMENTS FROM LENDER
If you require financing then do not book a surveyor until you verify whether your lender requires a particular surveyor. In some cases, lenders specify that the surveyor must be a member of "SAMS" (Society of American Marine Surveyors) or "NAMS" (National Association of Marine Surveyors)...
You would not want to pay for a survey twice!