Marine Mortgage for Liveaboard

[DaRed]

Hi All,

First time poster, long time reader.

I'm going to open with an apology as I know this topic comes up often in different formats but all current searching would suggest that the Liveaboard Mortgage market has dried up (in europe at least).

Everything i'm reading suggests that providers are either focused on commercial and leisure but will not support liveaboards (unless a canal boat), or they are only looking at short term loans.

My current search brings up lombard as about the only one providing calculations but i have heard they have stopped offering to liveaboards.

I'm looking to sell up and buy a used 44ft or more but woudl like to do this through a mortgage option.

Credit is top scoring and income easily supports a reasonably large house with land based lenders but all searching appears that i'm looking at half the amount if i'm trying to find something on the water.

Focused on cruising the Med while working as my job is web based.

I know many of you have limited web time to burn and may not need to consider things like boat financing these days. if so, this thread is probably not for you but thank you for your time reading.

Wishing you all the very best and safe adventures.

[billknny]

Not quite sure if this holds up in the EU, but for most states in the USA this story applies...

Many years ago I had the same problem. I was looking to buy a boat as a liveaboard and was having a devil of a time finding financing. I was venting to my father, telling him I didn't understand. Surely someone who lived on their boat would be more likely to maintain it and keep up payments over someone for whom it was just a hobby. Seemed logical to me...

As he explained it to me, and I later had confirmed by people in the "biz" the issue is this: If the boat is legally your home and you default on payments, the time and trouble to evict is a legal nightmare compared to a routine legal repossession of a boat. The liveaboard business is so tiny it is not worth the hassle.

[SV Bacchus]

Not sure for all the US or the EU but in Florida, if you finance, you will sign a legal document at closing stating you are not living aboard. If they go to repossess they can lay claim that the vessel isn't your home and bounce you out on your butt quicker.

Covering their bases and I get it. A few bad eggs make it rough for everyone.

[DaRed]

So presumably that means that you give them a land based address when taking out the finance.

We are looking at having a buy to let in the UK so guess we could always give them that address as our home address?

I figure that if i default on a home mortgage, they kick you out anyway so it should really be the same. :-(

[SV Bacchus]

We do own a house and supplied them with a copy of the deed. I then told the closer that the type vessel we were buying, a 42 Leopard cat, was suited for extended cruising. She said "No problem, you can be gone all next year but it isn't your home, right?" I replied "You are correct, it is not our home." Closing proceeded without any hitches.

I suppose a land base house is easier to keep tabs on than a vessel, it isn't prone to move around as much. If your vessel is for pleasure, it is probably kept at the same marina more often than hopping around. Who knows all the reasoning??

I tend to think Bill's answer above is the most correct.

[Rghayesky]

Issue will be how much down payment you have vs principal financed. But in the USA, there ARE companies that will carry a mortgage on your boat (even IF full-time live aboard). The issue in the US is the insurance carriers. Most (but not all) will not cover your boat IF you are full-time live aboard. When we moved aboard in 2015, had to change insurance carriers when we disclosed that we were full-time.
You might want to check on the "Jackline carriers" who specialize in cruiser insurance. They are more flexible with where, when, how, you are using your boat.

[john61ct]

I doubt a mortgage will be allowed on an uninsured boat.

[bluez06girl]

I will be applying for a mortgage myself in a couple of months. I was wondering which companies I should apply with first??? I have a house in Nevada but plan on selling it after my boat is purchased. I have been warned too not to disclose that my plans are to live aboard.

The post above says that the insurance carriers may be the biggest hurdle. They mentioned "jackline carriers". Who are these companies? Should I not tell them I will be a live aboard?

I feel like I'm venturing into treacherous waters

[a64pilot]

I borrowed a significant chunk of our boats purchase price as I didn’t know for sure if there was a $25,000 repower or other issue I wasn’t aware of coming real soon and I wanted the cash to deal with it if it did.
Paid the loan off very soon as feared expenses didn’t happen.
She was an OLD Boat when we borrowed against it also.
USAA didn’t bat an eye, transferred the money same day, I never even signed for anything. Very good rate and no concern about survey’s etc. got the strong impression they didn’t care what the money was for.
Truth is I believe as silly as this sounds, but if your in a financial position that you don’t have to borrow, borrowing is easy.

I would if I were you, shorten my desires up considerably and find something that you can pay or almost pay for. Then if you want fancier, save up and buy it.
People don’t want to hear that as they want newer, nicer and now. But usually they pay a whole lot more for it if they do, they pay higher prices as they are often helped finding financing, they then of course pay high financing costs, origination etc., and the item they are financing is a fast depreciation object.
If the finance company has to repossess in a couple of years, they take a bath, and many, many fall out of love with the boat in a couple of years.
So they have to make it so profitable to cover the reop’s that it’s stupid expensive, or as most do and forego it as not worth the trouble.

[billknny]

Do not EVER tell your insurance company ANYTHING that is not 100% true.

Not because you are a good person, or your mother would be disappointed in you if you lie, but because any material misstatement of fact on the application will invalidate the policy. There are a lot of insurance companies that will just go looking for a reason to deny a claim, and this is a very good one and an easy one for them. You pay the premium and if you have a claim, they just tell you "Sorry, Charlie!"

There is another very good reason to get a "proper" liveaboard policy when you do live aboard. They usually include "umbrella" coverage for liability. So you are covered for liability in your normal life--off the boat. If you don't have a homeowner's, or renter's insurance you probably have no other policy that covers these kinds of risks.

[Rghayesky]

Yes, of course, a mortgage would be required insurance at time of purchase. But, generally the purchaser has a land address at the time of purchase, and that does NOT automatically trigger the insurer to ask "Are you living aboard the boat?" Once they get that answer, THEN you will find out IF that insurer will cover Full-time Liveaboards. We ended up changing insurance carriers once we moved aboard full-time ;>)

[bluez06girl]

Originally Posted by Rghayesky

Yes, of course, a mortgage would be required insurance at time of purchase. But, generally the purchaser has a land address at the time of purchase, and that does NOT automatically trigger the insurer to ask "Are you living aboard the boat?" Once they get that answer, THEN you will find out IF that insurer will cover Full-time Liveaboards. We ended up changing insurance carriers once we moved aboard full-time ;>)

Would you mind telling us which companies you dealt with? Might save some headaches for a bunch of us

[zengirl]

I did just what s/v Bucchus did. Extended cruising up and down east coast. not a live aboard. Loan went thru like hot butter off a steak!

[a64pilot]

I was told years ago when I first got my Insurence, by the underwriter that when the time came, we were to be on an extended cruise, we were not living aboard, cause if we said that he would have to cancel us.
So I asked what defined living aboard, with the though of course of trying to avoid whatever that was. He didn’t know. He said it was fine to be extended cruising for years, just don’t declare yourself a “liveaboard”

Now that we are on our extended cruise, I think what a “liveaboard” is , is someone who stays in one area, never leaves and the only use of the boat is as a residence.
From the looks of things, often they have a tendency to not maintain the boat to very high standards, very often as believe cause they can’t do that and eat, but sometimes the Boat is nothing more than a cheap apartment.

[Mike Banks]

Unless one has a very substantial amount of money to put into the deal--a boat is not great security from a lender's perspective. AND they will insist of over-insuring it as a condition of the loan.

I would shop around for a sound fibreglass vessel, preferably a catamaran built in the eighties or nineties and pay cash for it. Fixing it will cost less than the interest one might otherwise pay on a loan for a new or near new vessel--which will be at a high rate because of the greater risk.

If you are going to live aboard, a boat is a very small space--even a forty footer. OK for two. I did it for five years. In that time I saved many thousands in rent--but lost that in resale value of the vessel.