Loans on >20 year old boat

[Taras]

Hi All,
I dont have a loan on my vessel but I was just told by a broker that the banks aren't lending money on boat purchases that are over 20 years old.
Has anyone else heard of this issue?
May effect whom can purchase vessels that were built before 2000.
Cash only?
Taras

 

[Comodave]

I spoke to Cindy at Sterling Financial about a month ago as to that exact thing. She said that they can get loans back to the mid 80s. 20 year with 20% down and you have to pay the sales tax separately.

 

[Unclematt]

In May/ June I was able to get a loan for a 30 year old boat through Sterling Associates. I would give them a call before trusting a broker.

 

[Comodave]

I believe there are 2 different Sterling out there. Not sure which is which but if you want Cindys number PM me.

 

[Wayfarer]

Cindy at Sterling was very helpful to me with my older boat as well. Unfortunately we couldn't make a deal because I was going to be living aboard full time, but for anyone who isn't living aboard, I'd recommend Sterling.

 

[Ventana]

We got a loan on our almost 40 year old boat through Key Bank, although that was a couple years ago and things change. You can’t mention that you will live on the boat, as far as I know nobody will loan on an older liveaboard. Several lenders told us to make sure not to mention if you plan to live aboard, and they make sure they do not ask.

 

[Benthic2]

..... we couldn't make a deal because I was going to be living aboard full time.....

I would think an insurer or bank would prefer a live aboard since the boat is always attended. No dead battery bilge pump failures to sink the boat, no leaks that go unnoticed for days or weeks to damage the interior, and less chance of theft of electronics or personal gear on an occupied boat.

 

[SteveK]

$ amount of purchase not mentioned.
A line of credit secured by other assets can be used for what you want. I can understand why they do not loan using the boat as the security.

 

[Comodave]

I would think an insurer or bank would prefer a live aboard since the boat is always attended. No dead battery bilge pump failures to sink the boat, no leaks that go unnoticed for days or weeks to damage the interior, and less chance of theft of electronics or personal gear on an occupied boat.

Lenders want to know where to come when you default on the loan. A liveaboard can move the boat anywhere. Insurers see full time as more chances for incidents to happen and unfortunately some liveaboards have given a poor image of liveaboards.

 

[Wayfarer]

We got a loan on our almost 40 year old boat through Key Bank, although that was a couple years ago and things change. You can’t mention that you will live on the boat, as far as I know nobody will loan on an older liveaboard. Several lenders told us to make sure not to mention if you plan to live aboard, and they make sure they do not ask.

I'm sure I could have made a deal at several places if I agreed that I wouldn't live aboard or just neglected to mention it, but I just didn't feel comfortable with that. I would have always been worried somebody was going to 'catch me trying to get away with something.' It would have stressed me out. I did it the hard way, but I feel better about it.

I would think an insurer or bank would prefer a live aboard since the boat is always attended. No dead battery bilge pump failures to sink the boat, no leaks that go unnoticed for days or weeks to damage the interior, and less chance of theft of electronics or personal gear on an occupied boat.

I mean... that makes sense to me... but what the hell do I know?

 

[Alaskaflyer]

What if you were simply voyaging full time?!?

 

[Comodave]

Pau Hanna posted about that a while ago. Basically you need a place to go to ashore so that you are not classified as live aboard. You certainly don’t want to lie to your insurance company since they can deny coverage if they find out. And if you have a major loss they will investigate.

 

[SteveK]

Pau Hanna posted about that a while ago. Basically you need a place to go to ashore so that you are not classified as live aboard. You certainly don’t want to lie to your insurance company since they can deny coverage if they find out. And if you have a major loss they will investigate.

And lie to the lender and they can recall the loan?

 

[Comodave]

And lie to the lender and they can recall the loan?

I am not advocating that either.

 

[SteveK]

I am not advocating that either.

to be clear, neither did I say that.

 

[Comodave]

It was kinda implied that you thought I was saying that, but if you say it wasn’t, then ok.

 

[SteveK]

Nobody reads the fine print.
Get caught in a lie on the application and it will be grounds for cancellation if the truth would have resulted in no loan or no insurance. Better?

 

[Comodave]

Thanks.

 

[Ventana]

My understanding is that if the boat is your primary residence, you need a different loan, probably more similar to a mortgage than boat loan. The process is different and many lenders are either not set up for that type of loan or unwilling to do what it takes to offer that type of loan. I’m certainly not an expert, just someone that had to research a lot of this for our last boat purchase.

 

[Bduffey]

Financing older boats

Hi

I would not recommend Cindy at Sterling. We had a very poor experience with them. Complete waste of our time and effort.

We had several other ways to go, But what we ended up doing on a 1988 Defever was to take a loan from our retirement/broker account that did not use the boat as collateral, so age of the boat didn’t matter. You might also use some other property equity as collateral and bypass the issue with the boats age. This really simplifies the financial aspect of The purchase. If you have a financial planner, have a chat. They may have some clever ways to get it done.

You should also approach your local banker. They know you and although they may not advertise larger boat loans, they might do it for you due to your past relationship. Interest rates are really low now, so get a fixed rate if possible.

Don’t get too discouraged with some of these ‘so called boat specialist’ financial agents and their ridiculous requirements and seemingly endless hoops to jump through. There are similar problems with an aircraft purchase, they are both just not as common A thing to finance. Assuming you have a deceit credit history, there will be a way to get it done.

Maybe some other members can suggest some unusual ways they skinned the financial cat. There are many clever ways to legally finance older vessels.

Good luck and safe travels.

 

[Alaskaflyer]

Hi

I would not recommend Cindy at Sterling. We had a very poor experience with them. Complete waste of our time and effort.

We had several other ways to go, But what we ended up doing on a 1988 Defever was to take a loan from our retirement/broker account that did not use the boat as collateral, so age of the boat didn’t matter. You might also use some other property equity as collateral and bypass the issue with the boats age. This really simplifies the financial aspect of The purchase. If you have a financial planner, have a chat. They may have some clever ways to get it done.

You should also approach your local banker. They know you and although they may not advertise larger boat loans, they might do it for you due to your past relationship. Interest rates are really low now, so get a fixed rate if possible.

Don’t get too discouraged with some of these ‘so called boat specialist’ financial agents and their ridiculous requirements and seemingly endless hoops to jump through. There are similar problems with an aircraft purchase, they are both just not as common A thing to finance. Assuming you have a deceit credit history, there will be a way to get it done.

Maybe some other members can suggest some unusual ways they skinned the financial cat. There are many clever ways to legally finance older vessels.

Good luck and safe travels.

This is often the best advice for airplane and boat purchases, find a bank that understands and appreciates the market. AlaskaUSA Credit Union for example, is one of the easiest airplane finance companies in the nation, they don't bat an eye at financing seventy-year old airplanes and have a common sense approach for valuation. They finance a lot of boats, wouldn't be surprised if they are fairly easy to deal with on an older trawler-type vessel. It used to be that you could only join/finance if you lived in Alaska or Washington state, but apparently (according to their website) they have more recently opened membership to residents anywhere in the USA.

When we are ready to purchase in the next year or so and - depending on the purchase price - decide that we might want to finance a portion instead of spending up a lot of our cash, AlaskaUSA will be my first call (I was previously a member for many years and partially financed two planes with them in my younger days.)

 

[60bubba]

My wife and I will be in a similar situation if/when we pull the trigger on another boat to run the Great Loop. I remember having difficulty back in 2001 finding a loan for our liveaboard sailboat. I ended up borrowing the money from my father-in-law.

It looks like Essex is a good option, but they will only go back as far as 2000, which may put this out of reach for us. I think our preferences and budget are more in line with the 1970's-1980's models...certainly hope we can figure out something clever to surmount the financing hurdle.

 

[MNdiver]

We plan on keeping our house and am working on refi of mortgage,since rates are at ridiculous lows, to finance the boat. Cheaper than using retirement savings

 

[Moonfish]

Five years ago (as our original three-year owner financing contract was rapidly approaching with a balloon payment) we tried all the usual boat finance suspects. And we work in the industry, so we even had some personal contacts. We kept being told no for one or more of three reasons:

1. Age of the boat
2. Value of the boat (not enough!)
3. Liveaboards

Then, almost out of desperation, we approached our local/regional institution, Kitsap Bank. Voila! We had a 10-year loan for our 1979 Cheoy Lee 46, which also halved our monthly payments.

The moral of the story? Try your local banks, too...

 

[timb]

we bought our slip and later our boat on a home equity line . oh and a skiff and Harley before that. it's nice because it money is tight you can make small payments, but if money is good you can pay it off fast. we did well with it i had a 5 year plan and slipped a boat and slip into it and it only became a 6 year plan because of the corvid 19 (deferred a 401 loan 9 months).

and we are poor people .so our toys are not that expensive.