Boat as Primary Residence

[huss9078]

So according to our boat finance company, banks will no longer lend to folks who want to live aboard their boat and call it their primary residence.
Has anyone else been in this situation?
Our house is on the market, we are going to sell everything and be free of "stuff", and a mortgage. So because it's not a piece of property, we can't get the loan amount that we would like? Hmmm? So if we buy a double wide trailer and call it our primary residence but have a 53' Trawler for pleasure, that would work for financing????
The loan company is referring to the Dodd/Frank Bill that was passed and actions taken by the Consumer Financial Protection Bureau after the market crashed.
I would love to hear anyone's 2 cents on this one!

[Glacial erratic]

I'm in the banking industry. The only way I could understand your finance company relying on DoddFrank and / or the CFPB is the regulations about "ability to repay". If you call in your residence the total monthly payments for "housing" has to be no more than 32% of gross monthly income. They may try to include loan payment plus insurance and possibly slip fees in the monthly payment computation.m. That's the only way I see that DoddFrank or CFPB could be more than a smoke screen.


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[Cheechako]

Buy the boat now.. you are living on land right? move aboard later. Why tell the bank anything?

[tomfl]

Originally Posted by huss9078

So according to our boat finance company, banks will no longer lend to folks

SNIP

I would love to hear anyone's 2 cents on this one!

I did not finance my boat but did contact a few lenders in hopes of getting some idea of what boats were worth to a non buyer.

Some simply said no. But I did get one lady at my credit union who gave me some straight answers.

Unless you have a great credit record it is harder to get a loan on a boat than on a home for obvious reasons.

[Tom and Maje]

Have you contacted any of the marine financing companies? Essex is pretty well-known. there are others as well.

[Dulcesuenos]

Essex will do as low as 4% loans on live a boards.

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[TacomaSailor]

I talked to ESSEX yesterday (Sept 12) and was told that boats purchased for liveaboard purposes (your only residence) will have mortgages issued based on the current guidelines and regulations that govern land based residential mortgages.

The ESSEX representative said that live aboard boat mortgages are now very tightly regulated to the same standards as conventional primary residence home loans.

We are trying to buy a custom one of a kind boat for our primary and only residence. We can find no lender because the new standards, that I mention above, require multiple recent comparable sales in order to establish a value for the boat.

Two other marine mortgage brokers confirmed that information when I talked to them today.

[cattar]

How about a boat loan, rather than a liveaboard mortgage loan.

I had talked with the folks at the credit union. They didn't care about liveaboard or not. To them it was a boat loan. The credit/income requirements were about the same as for a house mortgage. The credit union required a survey and appraisal by a NAMS/SAMS surveyor and required insurance for liability and replacement. Interest rates were about 2% higher and the life of the loan was much shorter than a home mortgage loan. (They were amused about a loan for a sailboat. Don't know what they would have thought about a loan for a custom-built sailboat.)

If I had really wanted a boat loan, I'd have shopped Boatus or Essex or… for a better rate. It would seem that requirements for a regular boat loan (the comps for value) might be less strict than for a liveaboard mortgage. Though this is confusing since Dodd Frank did exclude RVs and boats from certain requirements for mortgages.

If you get a boat loan, and that boat is your primary or secondary residence, IRS allows itemized deduction of the loan interest.

[huss9078]

Glacial erratic,
Nice to have a banker on board! We have great credit and our living expenses would be about 10% of our monthly income. We are working with a well known marine finance company in Annapolis. We have a mortgage and don't want to add another loan.


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[jcapo]

Amazing. I guess this is an unintended consequence of fixing the idea that everyone should own a house whether or not they can afford it. Good thing I'm not gonna try to finance another fulltime liveaboard boat.

[1ercru]

If Essex is a consideration, go through Costco's web portal (under Services) you'll get a lower rate than published rate. You do have to be a member, but that's certainly not a deal breaker. There is also a Costco giftcard if you get the loan. It's all web based so check it out, the only draw back I've seen is with limited productions or one-offs, they are just not going to make you a loan on one of those.

You can also use their rate to negociate with another lender.

The old axium with all bank loans: you have to prove you don't need one, to get one.

[huss9078]

Cattar, It is a boat loan at 4% for 20 years.
They are also requiring a Survey and Appraisal, Insurance and Liability which are all things we would expect.

[cattar]

Huss, nice rate for buying a trawler.
The boat finance companies do have better deals than the credit union's 5% and 7 years.

And it's TacomaSailor who wants a loan for a custom boat.

[cheoah]

There is no stipulation about live aboard in my boat loan that I'm aware of. Sterling acceptance got me through the process. It was one of the more challenging finance processes I've been through. Suntrust holds the note. Good luck-

[44'cruisingcat]

In Queensland you can't have a (boat) driver's license unless you have a residential address. Makes it tricky to live aboard and travel...