I am being told that Liveaboard Boats loans are now impossible

[robert sailor]

You have a decent cruising boat right now, just go and enjoy it, keep your cash....nice feeling!

[jacob30]

This law is a part of the Frank- Dodd act from what I understand. What a bunch of crap it is. There nothing that says your situation can't change after the loan


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[johnmcntsh]

[QUOTE=jacob30;1629098]This law is a part of the Frank- Dodd act from what I understand. What a bunch of crap it is. There nothing that says your situation can't change after the loan

I have seen a number of references to Dodd-Frank in this discussion. I do not see anything in Dodd-Frank that would cause you to be unable to purchase a boat, with the exception of you must prove that you have the ability to pay the loan back, as well as have enough of a down payment to have an interest in the property.

Those of us who are older will remember that this was standard practice before the late 1980's when deregulation came about and rules for lending were relaxed.

[tbodine88]

Originally Posted by gonesail

if you don't live in a house and have an income measured with W2 statements then you pretty much don't exist to the loan officers. even worse if you pay off your credit cards each month. one solution of course is to pay cash for the boat

I think paying off credit cards each month is a good idea, as this practice has raised my credit score over the past 10 years. Far more than just paying everything with cash, debit or check.

[DaleT]

Originally Posted by ianjoub

If it is all true when one signs the mortgage, then there is no fraud. One may then divest himself of all that crap after the fact.

A mortgage is a 'picture' taken the day you close. Get an apartment for the required six months, get the boat loan, do not share your liveaboard plans, and at six months the 'picture' will qualify you for your loan. When the loan is complete, do whatever you want, i.e., get a new residence (on the boat), get rid of the apartment, change your job, etc. The loan company CANNOT and will not hold you to the state of affairs that existed on the day the loan closed. Things change, life happens.

[FollowingCs]

Originally Posted by TacomaSailor

I guess a perfect credit history, long cruising history with a local boat mortgage, and bullet proof fixed retirement income is still not sufficient to make a lender happy.

Remember, it's not the lender's rules. Even if they keep the loan in their own portfolio, they must follow all the guidelines thrown down by laws/regulators, to keep a certain number of 'good loans', to keep a certain level of liquidity, etc.

It sounds like they intend on packaging this mortgage with others and selling on the secondary market (like most homes), and that means compliance with all the little nuisances. It is a pain for everyone right now, my wife being a Realtor, she knows. But considering we have 8 years of loose lending BASED ON REGULATIONS, not the banks trying to take advantage, it is probably for the best for the economy as a whole.

~ Following C's ~

[FollowingCs]

Originally Posted by DaleT

The loan company CANNOT and will not hold you to the state of affairs that existed on the day the loan closed.

This is not 100% correct. Depending on the mortgage legal language, there could be several things that trigger them to 'call the note'. For example, if you transfer title to someone else (even if a corporation that you own.). There could be many other stipulations depending on the note.

I have several commercial loans and they state that I must maintain a certain level of liquidity and a certain positive balance sheet, and I must report it to the banks annually. (i.e. if I go out and get more loans, I have to be careful that they don't cause too much damage to my overall Net Worth.)

~Following C's~

[sailorboy1]

All they "ifs", "ands", "rules" etc are just useless internet postings.

All that matters is what the lenders say!!! So the only thing to do is find out from them what it would take to get the loan and decide if you are willing to do it.

[zeehag]

buy outright and be beholding to no one for your home.
more than one way to lose a boat.

[Telemark43]

Send me a PM for contact and I'll share my experience, all legal.

[Ron Rico]

Originally Posted by ianjoub

......and roughly 10k rounds of ammo in various calibers, and the tools needed to use them

Only 10K? Sounds a little light for protecting six months worth of stores....

[TacomaSailor]

While I appreciate all the responses and the time taken to make them NO ONE has answered either of the only two questions I asked in my original post:


Is every full time live aboard boat cruising in the Bahamas, Caribbean, and Mexico owned outright by the captain and their mate?



Has anyone in the last two years been able to acquire a marine mortgage on a boat
- that they live on full time with no shore side residence
- cruise on full time outside the US

Does anyone have a actual experience in the last two years with a live aboard loan?

Over 1,900 views of this thread have occurred but no one tells me that they have gotten a live aboard loan.

Maybe I need to ask the opposite question:

Have other folks who wanted a live aboard loan with no shore side residence also been turned down in the last two years?

[Dulcesuenos]

Yes, we sold our house in Fl, owned a cat outright, purchased a larger cat thru essex, they knew full well it is our full time residence. We did not own a home it was sold., just another boat at time of financing our future plans to cruise full time but only part time right now. Our friends purchased a smaller cat also thru Essex, as their full time home and out of country liveaboard. Plans to cruise for a few years then back to US. They too financed w Essex. All this happened in 2014. I do know both of us have no home address, just a marina address possibly there is more to it?

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[RKsailsolo]

Finding something like a unit in a retirement community, as TxJ suggests, is an easy possibility. My cruising plan was put into motion when I bought a nice two bedroom condo built in the seventies in Kings Point, Delray. Beach, FL ( southern palm beach county). It's a retirement community so residents are all 55+ but if your 39 nothing stops you from buying one. That condo cost me less than $55K, move in ready. Very flexible plan that let's me help a family member that lives there for the two year cooling off period before I can lease it to get positive income while I coastal cruise. That works until I am ready to move there myself or sell it for an other option.

[valhalla360]

Basically, you have an asset that is going down in value, easily destroyed (on purpose or thru mistake and people who decide they made an expensive mistake have been known to scuttle a boat) and you told them you are going to take it out of the country where is will be hard to repossess.

If the "collateral" investements stay in a retirement account, the bank likely can't get at them easily so they don't really serve the purpose of "collateral". If you cash out the investements and put them in a regular savings account, your tax benefits go out the window along with the expected investment returns.

The fact that you don't have enough cash free from tax encumberance suggests you either are buying more boat than you can afford or you really haven't thought this thru ahead of time. Either is not a posititve endorsement from the banks point of view (I could be totally wrong but the bank is likely to consider it the same way).

Basically, you fall into a high risk group that requires the bank to go outside it's normal comfort zone...of course they have little interest in setting you up with a loan.

That leaves you with 3 options:
- Stay in the apartment and lie about your situation. You can probably get away with it but if things go bad and they get a hint of fraud, they may pursue it and the internet is not your friend (ie: if there is a million dollar lawsuit, this forum thread will work against you). It's one thing to take out a mortgage and then life changes. It's another to intentially lie about your intent.
- Cash out (possibly over 3-4yrs to limit the tax hit) and simply buy the boat.
- Go in your current boat.