Sailing into Dreams: The Guide to Yacht Financing

Boat ownership can seem like an exclusive luxury. But did you know that financing a boat could make that dream a reality sooner than you think? This interview with Dustin Howard from OceanPoint Marine Lending delves into the reasons why financing a boat is a smart financial move. Dustin shares valuable insights into the process, advises on what potential buyers should get ready for, and talks about common mistakes to avoid. Whether it’s a shiny new yacht or a pre-owned one, understanding the ins and outs of boat financing can steer you towards exciting adventures on your new vessel.

Why is financing a boat a good option?

Financing a boat is ideal because it allows you to spread out the cost over time, and in doing so, keeps your money invested and hard at work for you. Additionally, it enables you to get the boat you want sooner rather than having to save up for the full amount. Plus, depending on the terms, financing may offer tax benefits, which your accountant can walk you through.

What should I know or prepare in advance?

For loans over $150,000, the banks will want to review a full financial package to include two years of full tax returns, year-to-date income information, and your most recent asset statements. Having these items ready to go will expedite the process.

How long does the whole process usually take?

When you apply and upload your supporting financial package, you should expect to hear back with a decision within 24 to 48 hours. Once the loan is conditionally approved, you and the finance specialist will work together to clear any conditions and prepare for closing. The closing date can be set once the conditions are met, and the closing can be in person or remote.

Are there any common mistakes to avoid when financing a boat?

Make sure to get multiple insurance quotes and mooring location quotes to give you a complete financial picture of boat ownership. It is a great idea to chat with a finance specialist prior to applying for your loan. They will be able to run payments and give you an idea of rates and terms prior to application.

Are there different financing options for different kinds of boats?

Smaller loans have a shorter loan term, which can be similar to auto finance. Larger vessels have loans that are similar to home mortgages. Both types of loans are called a “ship mortgage,” and there are options for adjustable rate loans and fixed loans.

Are there special considerations for financing used boats versus new boats?

Many newer used boats will qualify for new boat rates and terms. Older vessels are typically subject to shorter terms and slightly higher rates, and there are also limited funding sources for older vessels. OceanPoint Marine Lending offers products that cover everything from new to 40 year-old vessels. It’s also wise to watch interest rates; we can help boat owners refinance to take advantage of lower interest rates when available.

It’s pretty clear that choosing a financing option can be a practical and beneficial way for soon-to-be boat owners to make their dream of owning a vessel become a reality. It allows you to keep your money free for other investments, and you might even get some tax benefits, which can be very  appealing. With the right preparation and expert advice, financing a boat can be a smooth and hassle-free experience. Just remember to chat with finance experts and gather all the necessary paperwork to make your journey to the open waters as smooth as possible.

Dustin Howard is the Vice President, National Sales Manager for OceanPoint Marine Lending, a division of BankNewport. He manages a team of experienced marine finance specialists ready to meet the financing needs of their customers. Dustin lives in Maryland with his wife and son and enjoys spending time outdoors, and you can likely find Dustin at your next local boat show.