Von Bongo

I don't know if National City are making boat loans or not, my point was they aren't looking for someone to buy them because they made too many boat loans on 900hp boats.

It's too bad my 1st boat was financed through them years ago and maybe even my second.

On the up side for them Wells Fargo is rumored to be a buyer and that will not be a negative for the customers.

Von Bongo

Interest isn't "loaded" at the front of the loan, you pay more interest in the beginning because your loan balance is higher in the beginning and smaller as you go farther into repayment.

If you refi you only pay interest on your current balance, only hopefully at a lower rate.

Example.
$100,000 boat loan at 6% you accure $16.44 in interest per day at that balance. So if you have a 240 month loan and a payment of $712 a month, that first month $493 goes to pay interest ont he $100k and $219 goes to principal.

When you pay your loan down to say $50,000 now interest only is accruning at $8.22 a day and when you make your payment a lot more is going to principal out of it than to interest. or out of that same $712 , $246 goes to pay a months interest and $465 goes to principal.

Now if you refi that $50,000 at 5% only $208 goes to interest, so a refi is saving you money. Assuming you doen't refi that $50K for another 20 years but keep the same term as what remained on your old loan

getchasum111

Well put Von.I am a broker in Somerset Ky....If I can help in anyway just jive me a call 229-669-5380

Chip Cecil

Von Bongo

Thanks Chip but I already have 4.75% from a local bank. Only for 5 years but if history is any indication that will be about 3 1/2 years longer than I actually own the boat!!!

Von Bongo

Actually, I'm probably a lot closer to William Tell than what you are giving me credit for!

Dean Ferry

I don't know what is happening with them,(saw something on the news that they were trying to sell themselves), BUT, we, (HQ and I) decided to pay off our National City boat loan last week Ahhh, what a nice feeling, no more boat payments, we just waiting on the title and all the paperwork now.
Dean

DaveP

Maybe between Stevie Wonder with a shotgun and William Tell

National City pulled the plug on Marine Financing almost 1 year ago....maybe a little longer.

As for High HP.........the higher the HP the more maintenence. Most (not all) but MOST repos that occur on 800hp, 1000hp, 1200hp boats, motors are JUNK by the time they get repo'd.

And yes - there are clients that HAD 780. 760, 740 credit scores but for one reason or another have fallen on hard times. And when they fall on hard times, the boat is the first thing that doesn't get paid.

A guys gets a 38 Top Gun Repo'd with 525's that never had the oil changed..........not really a big deal.

A Skater that has Twin 1000's and one is grenaded...GOOD LUCK trying to sell it for what is owed on it.

That is why most banks do not like BIG HP performance boats.

Dean Ferry

[QUOTE=DaveP;2521903]Maybe between Stevie Wonder with a shotgun and William Tell

National City pulled the plug on Marine Financing almost 1 year ago....maybe a little longer.


Dave P,
It's funny you say that, when we went into the local National City branch here on Merritt Island last week to pay off our boat loan, they were advertising RV/Boat loans. I even asked to see the rates, and they were ~.25-.5 higher than our loan was.
Hope this doesn't add to the confusion.
Dean

Von Bongo

As for High HP.........the higher the HP the more maintenance. Most (not all) but MOST repos that occur on 800hp, 1000hp, 1200hp boats, motors are JUNK by the time they get repo'd.


I agree whole heartedly!

No different however then your average Over the Road truck, we never repoed one with a fresh Cat in it. Never foreclosed on a house that had a fresh remodel.

Heck my first job with a finance company we financed and at times repoed water beds, want to know the liquidation value of that? But that's why we charged 31% APR (yes it was legal). Income offset losses. Appropriate dealer reserves for those bogus applications helped too. Our average ROE was 22-25%

And yes - there are clients that HAD 780. 760, 740 credit scores but for one reason or another have fallen on hard times. And when they fall on hard times, the boat is the first thing that doesn't get paid.

What's that got to do with the size of engines in the boat?

Answer None!

Didn't matter if they bought a Bayliner or a Skater the model risk of default is exactly the same.

Credit scores are a valuable tool for a bank that wants to play statistics rather than know their customers. Sounds like the statistics didn't play out in their favor.

Funny that they are rewriting the models, seems maybe they aren't as accurate statistically as some had been led to believe?

A guys gets a 38 Top Gun Repo'd with 525's that never had the oil changed..........not really a big deal.

A Skater that has Twin 1000's and one is grenaded...GOOD LUCK trying to sell it for what is owed on it.

Well that isn't apples to apples now is it? But sounds like we are getting to the heart of the problem!

Did I ever say they should have the same Loan to Values assigned to them?? No I said "properly value the discounted collateral" or the same interest rates?

Lending is about mitigating risk, not eliminating it.

Sounds to me like whomever wrote the loan policy didn't take into account the higher level of risk associated with that type of collateral.

Same reason commercial and residential real estate have different regulatory loan to values, there's more risk with one. (current real estate market excluded).

Hey how about this for boats with XXX HP we require 30-40% or even 50% down instead of 10% and we require a rate of 6% instead of 5%? XX months of cash reserves, dig into the balance sheet a bit and understand what's there. Call their local banker see what he or she has to say. But thats too old school, I'm starting to feel like T2x of finance!

But then again I can't find the barn.

"Very superstitious writing on the wall" I prefer the Stevie Ray Vaugh version.



PS I appoligize for hijacking this thread and vow not to take it any farther off course. Back to regular programing...Apache anyone??

DrewDown

Who should I contact to get 5%?