Ordering a New Catamaran - Timing on Financing

[Lonestaralaskan]

I have a question on financing a new catamaran and how the timing works.

Let's say we order the cat now, and it's not scheduled to be ready until 2023.

We pay a 10% deposit to start the order.

Can we keep saving over the next 2 years for the 25% down payment, or do we have to show we can finance the boat prior to ordering?

[double u]

...does this mean you don't have even 25% of the boat price?

[Lonestaralaskan]

We have a portion of it (about 35%). We have a big payout coming in 6-8 months and some assets that aren't currently liquid, but would like to start the clock on the timeline since its so far out.

Income levels are great, credit score high, low debt-to-equity ratio, so everything else is in line.

[GreenWave]

As I see it you need your down payment covered when you apply for your loan. If you don't have it now and you order the boat, and then things go sideways such that you don't qualify for the loan... well then you may lose your depsoit if you have to cancel the order. That risk is up to you to manage and accept.

[AJ_n_Audrey]

Depends on who you are working with, I guess. With Moorings, they would not move off the 25% down payment, but they would negotiate a bit on selling price and some other points.

[anthem00]

thats mainly because the boat depreciates close to 25% the moment it is no longer "new".. . The most they can recover from a non-new boat is about 75% of the new cost if for some reason your finances go south and default on the loan.

[Lonestaralaskan]

Let me rephrase my question since I'm not getting answers that are addressing the real intent of my question.

Is it possible to reserve a build slot without a full pre-approval? With the intent of getting the pre-approval prior to when the boat actually starts getting built. (2 years from now). Assuming we qualify on income, credit score, and debt to equity, and show general credit worthiness.


Thanks to anyone who knows the answer!

[DougM]

I've never heard of any test of financial means to buy. You'll get a contract with a schdule saying listing dates, payments due, and their progress on build buy that date. If you default you loose what you put in to date. get your downpayment, and you're in the deal. Miss a payment and you lose.

[sailjumanji]

Originally Posted by DougM

I've never heard of any test of financial means to buy. You'll get a contract with a schdule saying listing dates, payments due, and their progress on build buy that date. If you default you loose what you put in to date. get your downpayment, and you're in the deal. Miss a payment and you lose.

This exactly. Oh, I see we both have newer Seawind cats, which is why we had the same process! A down payment, and then maybe four more payments at specific completion hurdles. No one ever asked if we could afford it, would need a loan, whatever. If you miss a payment, I think you might get an extension for a short period. But as some point you default, and the boat gets sold to someone that wants to take your position. At a discount to them. You get no refunds.

[Lonestaralaskan]

Originally Posted by sailjumanji

This exactly. Oh, I see we both have newer Seawind cats, which is why we had the same process! A down payment, and then maybe four more payments at specific completion hurdles. No one ever asked if we could afford it, would need a loan, whatever. If you miss a payment, I think you might get an extension for a short period. But as some point you default, and the boat gets sold to someone that wants to take your position. At a discount to them. You get no refunds.

Thanks for the info! A Seawind 1260 is the boat we are wanting to order. Who was your sales rep?

[sailjumanji]

Originally Posted by Lonestaralaskan

Thanks for the info! A Seawind 1260 is the boat we are wanting to order. Who was your sales rep?

Steve Marsh, Finish Line of the Treasure Coast. He was very good to deal with. He and his wife, Tanya Franchi. Located in Stuart, Florida.

[Lonestaralaskan]

Thanks for the info!

How much was your first payment? 10%?

[sailjumanji]

We committed to a hull slot in Feb 2018, so some things may have changed. To hold the slot, we paid a $20 k deposit. That was considered first payment, on about a $360k build (excluding shipping, commissioning, sails and some equipment we installed ourselves after delivery, etc - everything that happened after the boat went out of the Vietnam factory. You will pay those subsequent costs when incurred - like shipping costs are paid right when boat is prepped for shipping. Seawind just got quotes from shipping companies, and presented actual quotes, and we paid them thru Seawind.)

Second payment was due when construction started, around June 1, and was about 25%
Third payment due when hull and deck joined, on around mid July. About 20%
Fourth due upon fitting of windows, hatches and engines, another 20%
Final, due at completion and prior to shipping from factory. End of October. 30%

Note the contract was very specific on exactly what USD was due when, and what hurdles for completion triggered it. There was a delay in hatches being received by the factory, and that delayed the fourth payment, although they continued on with the build. I think we got pics and updates every 2-3 weeks. The factory does a good job of showing the progress being made, as that is the trigger for the payments. Overall that was a good experience. I think we were delayed 1.5 months vs the original estimated completion date. And the shipping took about 2 weeks longer, due to US port delays. That was the killer - waiting on the boat! It came off of the ship in Port of Miami on Feb 15, 2019, almost exactly a year after we committed with a deposit at the Miami Boat Show.

[Lonestaralaskan]

All of this information is extremely helpful! I assume the financing for us would take place at some point after the 25% down payment, to cover the remainder of the boat costs.

Are you still happy with your choice of boats?

[sailjumanji]

Originally Posted by Lonestaralaskan

All of this information is extremely helpful! I assume the financing for us would take place at some point after the 25% down payment, to cover the remainder of the boat costs.

Are you still happy with your choice of boats?

Absolutely. We owned a 2002 Seawind 1000 from 2006 to 2018. Was very happy with that boat, but my wife wanted something a bit larger for guests, more comfortable in crossings, etc. I liked the dual outboard setup, didn't want a generator, and the Lite fit the bill just fine. We took delivery in Feb 2019, spent a month commissioning and testing out in Florida, jumped to Bahamas and went thru Exumas, Eleuthera, Abacos and Berries for three months, back to Florida, and then made the hop across the Gulf of Mexico back to Texas. We did have some issues with electrical, and AGM battery longevity. Actually, two sets of AGM's. Seawind and Mastervolt collaborated to get it all taken care of, although it took a while. We have a lot of Masterbus monitoring equipment onboard as a result. With many of the changes, it made it easy to just go to Mastervolt Lithium battery recently, and that is exceptional. Not as simple as an AGM setup, but recharge is incredible. We opted for the 840 watt solar option.

The 1260 is a nice boat. I prefer the dual outboard setup of the 1160 Lite. We've also opted for a very light boat, no second head, Spectra DC watermaker so we don't carry full water tanks, outboards lighter than diesels. I had a Aussie sailmaker Barracouta Sails push the sail sizes a bit, went with Dimension Polyant GPL Lite Skin (carbon) sails. Keeping the boat light, and the sails essentially race design means we sail a lot instead of motoring. We'd be tracking from Texas back to the Bahamas again this year, except Covid squirreled that up. Will be there next year.

Finally, when we ordered it was just starting to get busy at Seawind. Start on your build was about six months after build slot deposit, and estimated 10-12 months from deposit to delivery. That was early 2018 - a full two years before Covid, but only a few months after Irma wiped out the charter fleet in the BVI. Since then, demand has skyrocketed for all of their models. What are they saying about your delivery date? I understood that 1160 and 1260 were the fastest, at around 2 years?