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Old    eric ivey (ericlee)      Join Date: Apr 2007       06-14-2010, 12:55 PM Reply   
I got a friend looking to buy a 2007 Wakesetter 247 for around 54k....He makes really good money and just got financing for a 2011 fully loaded diesel (which he bought) and now he is trying to get financing for this boat and is having trouble. He can put 10 percent down but just cant get financing for the boat. Any direction on where he should go or suggestions on what he can do to get this boat? Thanks
Old    Murphy Smith (murphy_smith)      Join Date: Dec 2005       06-14-2010, 1:09 PM Reply   
Yeah, start by telling us his debt to income ratio? and we'll go from there.
Old    Andrew (bullydog)      Join Date: Sep 2008       06-14-2010, 1:09 PM Reply   
One of the problems he is going to have financing trouble is because he just went out and got a big loan for a brand new truck. Banks arn't just handing out loans to people now days just because they make good money, also they usually ask for more around 20 percent. Its all about debt to income ratio. His best bet is to save up more of a down payment or get his truck paid for as soon as possible. Im not a loan expert by any means but I hope this may help a little bit.
Old    Pete (petrey10)      Join Date: Apr 2010       06-14-2010, 2:31 PM Reply   
yeah thats the big thing what is his debt to income level??? Also if he could put down 25% he would be more likely to be approved... also what is the nada value on the boat?? Loan Officers (I am one) like to try and keep LTV around 80% just incase. Does he have any collateral to put down to secure the loan besides the boat? Boat loans are hard to get approved for right now... A boat depreciates very fast and is a horrible investment (the way loan officers look at it).... let me know if you need anymore help
Old    Bryce (brycejb328)      Join Date: Aug 2009       06-14-2010, 2:35 PM Reply   
When i purchased my boat... I actually used my truck as colateral as it was paid for. The bank wouldnt even look at the boat for colateral, even though the amount i wanted to finance was less than half the nada value of the boat

So theres a idea... use something as colateral that doesnt seem as "risky" as a boat
Old    Rich (dohboy)      Join Date: Aug 2007       06-14-2010, 3:39 PM Reply   
There are just a few banks doing boat loans now as apposed to a few years ago. Does he have a credit union. That would be way easier for him.
Old    Adam Fullmer (adam4x4)      Join Date: Jan 2009       06-14-2010, 3:48 PM Reply   
try a credit union. thats where i got mine for my new boat a few months back. plus they had a good rate. i only wish that i could pay cash for it.
Old    Ronnie Johnson (slidin_out)      Join Date: Apr 2010       06-14-2010, 6:32 PM Reply   
credit union hooked me up a couple of months ago with a good rate, went in and was approved in about 30 minutes, my bank was drawing the process out, terms were what i wanted so i took it, definitely check out the credit unions
Old    Nu Bu (05mobiuslsv)      Join Date: Apr 2006       06-14-2010, 6:49 PM Reply   
If your friend really has it like that to get two new rigs in one month he should have no problem throwing down quite a bit more than 10% down. That will be the minimum even at the best credit unions. Alot of banks are going by wholesale right now and don't see that changing anytime soon. We aren't out of the woods yet with this mess.
Old    Phatboypimp (phatboypimp)      Join Date: Apr 2005       06-14-2010, 6:58 PM Reply   
He should sell his truck and not get a boat and buy a house (assuming he doesn't have one).....lol. Everyone here has covered it....comes down to debt to income ratio. The best advice you could give your friend is to only buy things you can afford. You can't afford a new truck and a new boat especially if you are financing them both. He might be able to afford payments (especially on a 30 year boat loan) but if you can't pay cash you shouldn't buy it in my personal opinion.
Old    mojo            06-14-2010, 7:04 PM Reply   
the if you can't pay cash don't buy it motto is so dumb. so don't buy a house if you can't pay cash? nope. don't invest in your business if you don't have every penny? nope. if you can't afford a 5 year financing deal on truck or boat then ya, shouldn't do it, but dumb.
Old    WakePowell Chris (epic1)      Join Date: Oct 2006       06-14-2010, 7:33 PM Reply   
a house or money in your business is an INVESTMENT. boats, trucks and cars are almost allways LIABILITIES. So you should never finance a boat or truck, they will never be worth what you payed. that is what phatboy is saying I think.
Old    mojo            06-14-2010, 7:35 PM Reply   
there's a point of liquidity though. if you have investments in your home, business or whatever you might not be totally liquid to buy what you want even if you can afford it so you finance. big difference in financing something and not affording it.
Old    Red C5 (peterc4)      Join Date: Aug 2005       06-14-2010, 11:10 PM Reply   
I think the last few years showed a lot of people that a house can be far from an investment. It's more of a liability and quite a few people are better off renting.

To the OP, your buddy just financed what is likely a $60k truck and wants to finance about the same in a boat. We don't know about his mortgage, or other financial commitments but his loan to debt could have got maxed out with just the truck.
I'm curious what "really good money" is? Maybe a credit union will be a better route for him.
Old    Randy (dudeman)      Join Date: Mar 2005       06-15-2010, 6:06 AM Reply   
Credit Union is the way to go. Ours hooks us up with everything. We've been with them for 12 years though and have established a personal relationship. Much easier to do that with a Credit Union than a bank IMO>
Old    Pete (petrey10)      Join Date: Apr 2010       06-15-2010, 6:31 AM Reply   
if you have a loan its a liability no matter what it is.... plain and simple... that liability looks better when you are no higher than 80% LTV... if you are higher then that then you have the potential to have a major problem if something were to happen to u or your income source. Even rental properties are liabilities... they are starting to not factor in your rental income or future income but there are ways around it...
Old    Jonathan (TheSarge)      Join Date: Apr 2010       06-15-2010, 7:09 AM Reply   
Wow..54k for a 2007 247, I saw one go at auction for 37,500. Guess I should start buying these boats.
Old    Steve (NuBu)      Join Date: Apr 2010       06-15-2010, 7:19 AM Reply   
Your friend has a couple of issues he needs to look at. 1) Credit score, if he just got a new loan for a 2011 diesel then his credit score will have dropped. Any time you open a new credit account your score takes a hit. This reduction of his credit score can have a negative effect on his ability to get financing for a boat. 2) Debt ratio, because he has a new loan, he has new loan payment... this can definitley have a negative effect on his ability to get a new loan. 3) Liquidity, now more than ever banks are looking at boats as a luxury item. This means they expect you to have a lot of cash in reserve to not only put down on the purchase but to also provide plenty of cushion for the rest of your lyfestyle. If he only has 10% to put down this is a red flag on his liquidity levels. My suggestion to him...wait until next year to make his boat purchase.
Old    Paul (psudy)      Join Date: Dec 2003       06-15-2010, 8:55 AM Reply   
Credit Union. They will loan money to anyone.
Old    Pete (petrey10)      Join Date: Apr 2010       06-15-2010, 10:16 AM Reply   
Steve actually your #1 is not always true.... If he had no other loans or other types of credit lines (credit cards etc.) Having a loan would actually raise his credit score... Its complicated but there are 600+ factors that go into your credit score... also a person with 2 visa or mastercards will get a better credit score than someone with one or 3+... hard to imagine i know but its true!
Old    Phatboypimp (phatboypimp)      Join Date: Apr 2005       06-15-2010, 10:31 AM Reply   
Rojo - epic1 translated my thoughts quite well. I am not saying that you shouldn't borrow money ever, I am just saying that borrowing money on a depreciating asset is not a good idea. As I mentioned in my post, I think taking a loan out on a house is a good idea (traditionally speaking who knows moving forward) and investing in your business is also a good idea.

But if you look at the amount of foreclosed homes and you look at the success of small businesses (majority of them fail) - there is rarely a great investment. If you look at the majority of healthy businesses today, most of them borrowed money to get the business started, but they continued to invest their profits back in the business.

On your liquidity comment, this is another reason for our financial failure over the last couple years. People borrowed against the value of their home with a Home Equity Line of Credit - guess what....home values (just like stock/equity values) are dynamic. What is a profitable business today, may not be a profitable business tomorrow. If your finances are not liquid it is impossible to determine their value. You can guess and people will loan you money, but without it being liquid you have no true value.

The REASON people finance homes, cars, boats, businesses is because they can't afford it. This is why you are paying a FEE (see interest) for borrowing the money. The bank knows you can't afford it, you want to buy it and they are going to make money off your want to have something you can't afford. This is why our country is broke, we all want what we can't afford.

I am super conservative financially and I know that not everyone believes what I believe. I choose to spend less money than I make and I personally choose not to finance depreciating items. I do have a mortgage and I hate paying the bank interest on that money every month but I do not want to have the majority of my assets locked up in one particular investment, so I have chosen to the pay the interest.

Sorry for the hijack.

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