Financing for Live Aboard

Hey all,

Have my boat under contract, and have located my next dream boat, but low and behold, I seem to be having some issues in finding, financing. Apparently the laws have changed and very few underwriters are taking on liveaboards.

Any suggestions?

Have you tried Chesapeake Financial? We had a very good experience with them, although that was in 2007 and we put in a big downpayment by choice.

Will said:

Hey all,

Have my boat under contract, and have located my next dream boat, but low and behold, I seem to be having some issues in finding, financing. Apparently the laws have changed and very few underwriters are taking on liveaboards.

Any suggestions?

Click to expand...

Key Bank does liveaboard. Many credit unions don't care- they will lend based on the standard criteria. Might be best to not mention liveaboard.

Will said:

Hey all,

Have my boat under contract, and have located my next dream boat, but low and behold, I seem to be having some issues in finding, financing. Apparently the laws have changed and very few underwriters are taking on liveaboards.

Any suggestions?

Click to expand...

Check more marine finance brokers and companies. As to the laws changing and impacting it, I have no idea what they're talking about. As to an individual lender changing occasionally that doesn't surprise me. But liveaboards are finding financing so just keep searching.

Try Essex Credit. They placed our financing with BB&T. Good rates with good service. Live aboard was never mentioned, just straight forward financing for a boat.

I"m just about to go into the same situation with the Marine Trader 38 that I've found...but I agree, no need to mention "liveaboard"...I know with RV's...that is motor homes, 5th wheels, etc you Never tell the financer you're going to live aboard. Good luck to ya, and let the forum know the outcome?

You would think they would be happy with a liveaboard instead of an owner who may only use his boat every few weeks.

Not to hijack the thread, but what are interest rates like for this sort of thing??

Don't know about rates, but I do know that some banks require additional down payment- I think Key Banks requires 35%, up from the standard 20%.

Having finance three Nordhavn's which we spend a lot of time aboard we would never mention living aboard to the bank or the marina. As long as you can provide an address on land (even a P.O. Box) you can save yourself a few dollars.

John T

Update:

Thank you for all the recomendations, so far no takers, but I will not give up. A broker I am working with is being helpful, so possibly there.

Have you tried Pantaenius?

I just called my credit union. For a boat older than 6 years, they do a 10 year max loan at 9.99% interest for A+++ credit.

Nope.

Wayfarer said:

I just called my credit union. For a boat older than 6 years, they do a 10 year max loan at 9.99% interest for A+++ credit.

Nope.

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Why "Nope"?

Remember, a boat, unlike a house, depreciates with age. You can't expect a 3%, thirty year loan.

I've seen a few pages that say "no live aboards." I wonder what would happen if they found out after the fact that you were living aboard. Could they prove it?

Wayfarer said:

I've seen a few pages that say "no live aboards." I wonder what would happen if they found out after the fact that you were living aboard. Could they prove it?

Click to expand...

If you don't lie at any point then nothing. But do be careful and read the policy and make sure it doesn't exclude live aboards. If you lie, then essentially their attitude would be you have no insurance. Now that doesn't hold up all the time, depending on the nature of a claim. But insurance companies do investigate more for claims than writing policies sometimes.

When you say "liveabaord" are you saying this will be your sole residence and permanent address? No cruising?

We currently liveaboard and have no shore side residence. Our official address is a PO Box near our marina. We have lived aboard, with no shore side residence for over a year and for six of the last 15 years.

We wanted to finance a 46+ foot newish big name trawler that would be our sole residence. We had provided the following financial info to the lender - 40% down, 800+ credit rating, 35+ year history with the same bank, successful financing and payoff of another expensive boat, two big houses, and many expensive sports cars, financial assets worth many times the value of the boat to be financed, and NO current debt.

The finance company (very large specialist in US Marine financing) reviewed the deal and approved the loan subject to seeing our 1040s and bank statements.

Several days later the lender call to say they had discovered that our address "was just a PO box" and they wanted to know if we had a "real" address.

AH - NO!

They then said they could not finance the boat unless we had a six-month history of living in a "real" shoreside residence with tax bills, utility payments, and rent checks to prove that residence.

Subsequently talked with Key Bank (who financed our previous boat), our credit union (financed a smaller boat and several cars) and they said the same thing - no "real address" with six-month history - no loan.

Then talked to three marine mortgage brokers who contacted all their lenders with our credit info -same story: "no real address" - no loan

The problem seems to be that Dodd-Franck changed the standards for loans and IF a boat is the sole residence then the marine mortgage must conform to all HUD and "normal" residential lending standards. No marine mortgage company has the expertise to deal with those standards.

Another BIG NO-NO in the current lending environment is long term travel outside the United States waters.

We talked some more with the big marine lender and determined that a cheap apartment (not really possible here in San Diego) would get us the loan. We then said something to the effect of:

"We'll be taking the boat to the Sea of Cortez for a couple years and then on thru the Panama Canal and eventually to Florida in a couple more years."

Well - that killed the deal yet again. They will not lend on a boat that is going to be outside US territorial waters for more than six-months a year.

That probably works for east coast boats who can go to Puerto Rico or the USVI to reset the six-month clock. Here on the Left Coast - getting back to US waters means a 750-mile BASH up the Baja coast which I've twice and determined that was one too many.

NO Primary Liveaboards - NO long distance cruising if you want a loan!

I wouldn't advocate lying to a bank in any detail, but there's also such a thing as volunteering too much. And as for the dirt address - no kids or relatives or friends on land? No attorney or CPA or somebody you could hire for a few bucks to forward your mail? I happen to live in South Dakota and there are businesses here with that sole purpose. Now of course most out of staters declare SD residency because we're nearly the lowest tax state in the nation, which to me is a shady or kind of cheating reason to practically lie about your residency - but that's not what we're talking about with this boat financing issue, no cheating involved.