I just want to see if anyone else has ever encountered this.
I recently purchased a boat. While I was waiting on the survey I went to my credit union and savings bank and applied for a pre-approved loan. If everything was good with the survey, I was going to buy the boat. On the preapproval, I was qouted a certain interest rate, it was a good rate. Just to back step a little; both banks new what I was buying. When I signed the check and handed it to the owner, he of course cashed it and I now own the boat.
I picked the loan and rate from the credit union because it was better. Since the main branch is located across the country from me, everything is done by fax/email/mail and Notaries. When I actually received the loan paperwork, the interest rate was 2.25 points higher than the preapproval.
The loan officer told me this was because the NADA said that I bought the boat for much more than it is worth. The rub is that my boat is essentially a kit boat. It's hull is a 1965 islander/yachtcraft hull but the rest of the boat was custom built by the first owner. And I must say he had mad skills when it came to boat building.
The survey came out with the price of the boat being the price that I paid. I now have been talking and exchanging faxes with the loan officer for several days. Right now they have a copy of the survey and I am waiting on a response.
I now this is long but please bear with me.
The credit union is a very reputable one, Navy Federal Credit Union, and I have been a member with them since 1982 and I have an excellant credit rating from the big three credit reporting agencies.
Has anyone ever experienced something like this?
__________________ My son, the Marine!
"But a Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever."
John Adams
Unfortunately, the bank probably has the right to change the interest rate... You might want to point out that NADA values aren't all that accurate—especially with regards to semi-custom boats.
__________________
Sailingdog Telstar 28
New England
You know what the first rule of sailing is? ...Love. You can learn all the math in the 'verse, but you take
a boat to the sea you don't love, she'll shake you off just as sure as the turning of the worlds. Love keeps
her going when she oughta fall down, tells you she's hurting 'fore she keens. Makes her a home.
—Cpt. Mal Reynolds, Serenity (edited)
If you're new to the Sailnet Forums... please read this POST.
Unfortunately, the bank probably has the right to change the interest rate... You might want to point out that NADA values aren't all that accurate—especially with regards to semi-custom boats.
Thanks SD. The whole NADA thing is the issue that I have been discussing with the loan officer/s. I think one big problem is that I am not sure if all the LO's have experience with boats and boat loans. I had to explain the survey to a couple of different people and also the fact this boat is not a production Islander boat.
I will keep post any news I receive from the LO.
__________________ My son, the Marine!
"But a Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever."
John Adams
__________________
Sailingdog Telstar 28
New England
You know what the first rule of sailing is? ...Love. You can learn all the math in the 'verse, but you take
a boat to the sea you don't love, she'll shake you off just as sure as the turning of the worlds. Love keeps
her going when she oughta fall down, tells you she's hurting 'fore she keens. Makes her a home.
—Cpt. Mal Reynolds, Serenity (edited)
If you're new to the Sailnet Forums... please read this POST.
Thanks SD. The whole NADA thing is the issue that I have been discussing with the loan officer/s. I think one big problem is that I am not sure if all the LO's have experience with boats and boat loans. I had to explain the survey to a couple of different people and also the fact this boat is not a production Islander boat.
I will keep post any news I receive from the LO.
Harry, Ask the LO about his experience with boats. Also if it is not listed on the survey, ask your surveyor how he arrived at the value he put on the survey. Some surveyors list the sources they used plus any problems encountered in finding a value as well. Also be advised that putting a value on custom boats can be hard at times, because one has to research for similar vessels and they may few and far between.
I don't know about what the bank can and can't do, but as I said, use your surveyors expertise in arriving at the value. If you have multiple sources for the value, it may help. You alslo may have to provide addtional details about the quality of the work that was done.
You also might see what your insurance company says about the value of the vessel as well and how they approach these issues.
Best of luck.
John
__________________ "It's not just about the vessel... more importantly it is about the people, their safety and their vessels in that order. "(PFJ 1952-1986)
Last edited by JHJensen : 11-07-2008 at 07:48 AM.
Reason: correction
Harry, Ask the LO about his experience with boats. Also if it is not listed on the survey, ask your surveyor how he arrived at the value he put on the survey. Some surveyors list the sources they used plus any problems encountered in finding a value as well. Also be advised that putting a value on custom boats can be hard at times, because one has to research for similar vessels and they may few and far between.
I don't know about the what the bank can and can't do, but as I said, use your surveyors expertise in arriving at the value. If you have multiple sources for the value, it may help. You alslo may have to provide addtional details about he quality of the work that was done.
You also might see what you insurance company says about the value of the vessel as well and how they approach these issues.
Best of luck.
John
Thanks John, I'll use that approach.
__________________ My son, the Marine!
"But a Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever."
John Adams
The same happened to me. I went to my local credit union and was pre-approved. Upon closing the the terms were reduced in half from 11 to 6 years and the intrest rate jumped 2.5 percent. I am currently finalizing arrangements to refinance the boat through another company at the terms and rate first quoted by my credit union. BTW I have been using this CU since 1992.
When I was looking at selling my Passport 40, I found that NADA values had absolutely no relevance to what the boats are selling for - there was over a $30k difference.
__________________
s/v "Pelican" Passport 40 #076- Cruising - BLOG - http://www.svpelican.com "Don't dream your life, live your dream" - Bob Bitchin'
"I'll see it when I believe it" - Me
Try using the Boat US Valuation guide. If you get a better result from them, put your credit union in touch with the Boat US valuation guy. He is a real person who does real research and might just come to your defense.
Just got off the phone with the CU LO. I asked him if he had experience with boat loans and he said yes and that he was assigned to yesterday to this loan because of his knowledge of boat loans.
He told me that they received the survey and now they need the title. When they receive the title with the CU as the lien holder they will reduce the interest rate to the preapproval amount. Until then, they are treating the loan as an unsecured loan with the interest rate to match.
Since I'm currently working in Guam things are going a little slow but the title company should be done pretty soon.
John, SD, xort and the others, thank you for your recommendations and I will post the outcome as soon as the CU receives the title.
PS. The survey helped, asking for a loan officer that knew boats helped and keeping talking to them helped.
__________________ My son, the Marine!
"But a Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever."
John Adams
My son, the Marine!
