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Old 24-08-2016, 11:07   #1
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Financing a boat as an Expat/non resident in the US?

So, I'm about to move to the US (Seattle, WA), and I would love to buy a sailboat to use as a liveaboard (and sail it of course). I'm looking at a used 40 footer priced around 50.000$ USD, and I would like to finance the boat.

I feel like this is going to be challenging from many points of view (financing, insurance, find a slip) and I'm starting to look around now for the options I'll have.

So, has anybody here experience with getting a loan for a boat as an expat/non resident? My understanding is that I'll have no credit history and a very low credit score when I'll arrive there, so I'll get rejected everywhere.
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Old 24-08-2016, 13:03   #2
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Re: Financing a boat as an Expat/non resident in the US?

No experience, but contact Essex or US Trust (they both do boat loans in the US) and see what they say.
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Old 24-08-2016, 13:05   #3
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Re: Financing a boat as an Expat/non resident in the US?

Asked Essex, they replied almost immediately and they "require 3-5 years comparable credit and a credit score of 690 or better to get started"...

I'll try and call US Trust, let's see what they say
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Old 24-08-2016, 13:10   #4
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Re: Financing a boat as an Expat/non resident in the US?

That's about the first response you'd get from a home mortgage lender, as well, but ex-pats buy houses all the time. There must be a way.
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Old 24-08-2016, 13:18   #5
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Re: Financing a boat as an Expat/non resident in the US?

Well, that's easier...

I'm moving for work, and the company I work for has agreements with a couple of banks so I can get a bank account and credit card as soon as I walk in a branch, and they will consider me as somebody with a high credit score. I can get a mortgage for a ridiculous amount (waaay more than I need) with lower interests, and a car loan pre-approved the day I set foot in the US.

But liveaboard sailboats? Nope
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Old 24-08-2016, 13:21   #6
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Re: Financing a boat as an Expat/non resident in the US?

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That's about the first response you'd get from a home mortgage lender, as well, but ex-pats buy houses all the time. There must be a way.
Homes are secured assets that are relatively easy for a sheriff to seize. Boats OTOH can be sailed away - for a ex-pat with no real ties to the United States and no real estate to back a loan, only a piss poor lender would hand him money for a boat. It'll be a worse risk than subprime mortgages.

Cars can't be driven across the ocean.
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Old 24-08-2016, 13:31   #7
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Re: Financing a boat as an Expat/non resident in the US?

Offer up a large down payment and don't call it a live-aboard. Then try getting a loan.
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Old 24-08-2016, 14:16   #8
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Re: Financing a boat as an Expat/non resident in the US?

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Homes are secured assets that are relatively easy for a sheriff to seize. Boats OTOH can be sailed away - for a ex-pat with no real ties to the United States and no real estate to back a loan, only a piss poor lender would hand him money for a boat. It'll be a worse risk than subprime mortgages.

Cars can't be driven across the ocean.
You missed my point. All mortgage lenders will want credit history, scores, etc., but ex-pats don't have that. Yet ex-pats do buy houses. So somehow lenders can get past the lack of US credit history.

Is a boat a riskier loan than a house? Of course, reflected in the rate.

Worse risk than subprime? Don't think so. Subprime couldn't make the payments; their only hope was appreciation. Here you have an international company transfer. This guy's making enough to make the payments on a 50,000 boat. And unless he's Canadian, he's not sailing it home.
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Old 24-08-2016, 14:33   #9
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Re: Financing a boat as an Expat/non resident in the US?

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You missed my point. All mortgage lenders will want credit history, scores, etc., but ex-pats don't have that. Yet ex-pats do buy houses. So somehow lenders can get past the lack of US credit history.

Is a boat a riskier loan than a house? Of course, reflected in the rate.

Worse risk than subprime? Don't think so. Subprime couldn't make the payments; their only hope was appreciation. Here you have an international company transfer. This guy's making enough to make the payments on a 50,000 boat. And unless he's Canadian, he's not sailing it home.
Like I said in the prior post - the key difference is that a home is a secured asset that can be seized in the event of default. They can record a boat mortgage - but before the sheriff can seize the boat, the debtor can be long gone with the asset. If someone defaults on a home loan, in a standard healthy market, after the owner has invested a down payment and has been making payments for at least 3-5 years, the creditor almost always gets returns on their investment (even with a default). Credit history/scores are just a tool for a potential creditor to evaluate risk, a foreign national with no real estate in the US is more likely to leave and not pay his debts.

Even when the subprime defaults were at an all time high, as individual loans, they were still safer to the creditor than car loans, and virtually all other types of loans - as people are willing to keep paying mortgages above other creditors. The problem was the way the subprime loans were packaged and repacked so that the losses were compounded and liquidity became an issue.

It isn't that creditors don't believe the original poster's reliability or ability to pay for the boat - it is about secured asset transactions. If someone will lend him the money, it'll be an awful rate that approaches credit card interest rates - if the rate isn't that high - someone really messed up evaluating the loan.
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Old 24-08-2016, 15:21   #10
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Re: Financing a boat as an Expat/non resident in the US?

To the OP: one problem is that boat lenders will want to file their mortgage with the Coast Guard, which requires that the boat be "documented" (the national boat registration system in the US), which can only be done by a US citizen.
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Old 25-08-2016, 00:22   #11
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Re: Financing a boat as an Expat/non resident in the US?

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Originally Posted by Cottontop View Post
To the OP: one problem is that boat lenders will want to file their mortgage with the Coast Guard, which requires that the boat be "documented" (the national boat registration system in the US), which can only be done by a US citizen.
Interesting. So I need to find a boat that was already documented by the previous owner?
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Old 25-08-2016, 02:33   #12
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Re: Financing a boat as an Expat/non resident in the US?

Are you planning to buy a house? If so, take out a home equity loan and use the cash to buy a boat. The bank won't care what you do with the loan proceeds.
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Old 25-08-2016, 02:36   #13
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Re: Financing a boat as an Expat/non resident in the US?

Not really, I was planning to live aboard my sailboat...
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Old 25-08-2016, 04:16   #14
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Re: Financing a boat as an Expat/non resident in the US?

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Interesting. So I need to find a boat that was already documented by the previous owner?
Unfortunately, won't work. Once ownership passes to a non-US citizen, the boat can no longer be "documented." The boat would still have to be registered in a state system (WA?), but that might not satisfy a lender. Not sure.
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Old 25-08-2016, 04:56   #15
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Re: Financing a boat as an Expat/non resident in the US?

Look for a boat that will owner finance
I've done that twice... You'll need to convince someone but it's a buyers market



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