# Financing



## PrebleBoy (Dec 27, 2012)

Has anyone had success financing while living aboard?

I am in the market for an Alberg 37 (or something very similar) to live aboard while I am stationed in Rhode Island for 6 months. The problem is that the only places with reasonable rates won't finance those who live aboard.

Perhaps I should give the truth a little bit of a fisherman's reef, since I will only be living aboard for 6 months of the loan.

Any suggestions would be very helpful.


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## azguy (Jul 17, 2012)

Interesting, did they say why..?

The two things I thought of was additional 'wear and tear" from 24/7 usage and the fact that it may be much harder to 'repo" if it's a legal palce of residence rather than a plain old boat.


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## PrebleBoy (Dec 27, 2012)

They didn't say. But I just got approved for a loan with USAA for the amount I wanted and at a reasonable rate. It wasn't the lowest, but I told them I only wanted to live aboard for six months at dock, not cruising, and they said that it was inconsequential.

So, now I have a slip at the Navy Marina in Newport, RI and a loan! All I need is a boat!!!

I'm looking for an Alberg 37, Bristol 40 or a Block Island 40.


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## mdi (Jan 15, 2009)

PrebleBoy said:


> USAA for the amount I wanted and at a reasonable rate.


USAA will make loans others will not, at reasonable rates because of who they offer service too. It is how I got my boat.


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## Heinous (Mar 25, 2009)

I used USAA as well.


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## tmiller1116 (Sep 27, 2012)

we used Essex for our financing since we only needed a bit... most of the boat financiers want you take out a minimum $25k and Essex only wanted us to take out a minimum of $15k They are affiliated with Bank of the West on the Pacific side of the country 

And yes, we live aboard and they knew it.


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## PrebleBoy (Dec 27, 2012)

Update: My offer on a Bristol 40 was just accepted this morning!


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## mdi (Jan 15, 2009)

CONGRATS!!!!!!!!!! I know that is a nice feeling, ride the joy 

It's just like sailing


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## Silvio (Nov 10, 2010)

congratulations!!


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## swellbound (Aug 21, 2010)

It's pretty much impossible to obtain financing on a boat beyond 25 years old. With regards to financing a live aboard situation, the lender sees its collateral floating away to the South Pacific. Just buy what you can afford for cash and have fun; you'll feel much better!


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## Heinous (Mar 25, 2009)

Awesome!


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## MedSailor (Mar 30, 2008)

Strange, until 2 years ago we lived aboard our boat financed through USAA and it was built in 1975. Then again, I saw the boat insurance market change from competitive bids on my boat to nothing but dial-tones in 2 years.

With insurance, if you say one thing, and they find out you ended up doing another thing, they don't pay. With loans, once they write the loan, they've written the loan, period. 

I'd say that you don't really meet the criteria of living aboard. Get the loan from USAA with the intent not to live aboard and spend a little time aboard over the next six months. Fill in the blanks as they need to be filled out and don't look back. Have they REALLY defined living aboard? In a calendar year, including the time you spend at work, away from the boat, will you be on the boat for more or less than 50% of the year? Is 50% even a reasonable definition of living aboard?

Some friends I have spend more time at work or out about town than in their own houses on an hour by hour basis. What exactly counts as living aboard anyway and are you sure you meet the criteria? 

Banks would use lawyers to argue the point if it came to that, so it behooves you to think like a lawyer yourself sometimes. (feels slimy I know, but then again banks, loans, and all that associated stuff is pretty slimy)

MedSailor


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## Minnewaska (Feb 21, 2010)

MedSailor said:


> .....With loans, once they write the loan, they've written the loan, period......


Not so fast. This appears to be the case, as most loans are paid current and are not a priority, nor do most banks reconfirm these things.

However, if you find yourself in a bind and can't pay, there is nothing more powerful for the collection department at the bank than a strong case of fraud. If they can demonstrate intent to defraud, it is criminal. Although, just a civil action on fraud is much stronger than simply trying to get a judgement on a note or repossess collateral.


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## jameswilson29 (Aug 15, 2009)

...not only is fraud criminal, but it can also make the loan nondischargeable in bankruptcy if the bank should timely file a complaint for such a determination. 11 U.S.C. 523(a)(2).

This would also include use of false pretenses, a false representation ("...it will not be my primary residence..."), actual fraud, or a materially false financial statement in writing used with the intent to deceive.

The awful result: one could end up owing the loan for the rest of one's life, and would be perpetually subject to wage/bank account garnishments.

Tell the truth on loan applications. There are much worse things than being turned down for a loan. Better yet, don't finance depreciating luxury goods on credit. Only buy with disposable cash.


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## mdi (Jan 15, 2009)

Minnewaska said:


> Not so fast. This appears to be the case, as most loans are paid current and are not a priority, nor do most banks reconfirm these things.
> 
> However, if you find yourself in a bind and can't pay, there is nothing more powerful for the collection department at the bank than a strong case of fraud. If they can demonstrate intent to defraud, it is criminal. Although, just a civil action on fraud is much stronger than simply trying to get a judgement on a note or repossess collateral.


Take out a disability wavier on the loan just in case


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## mdi (Jan 15, 2009)

swellbound said:


> It's pretty much impossible to obtain financing on a boat beyond 25 years old.


My boat was built in 1967, no problem with loan with USAA or insurance with BOATUS. Both wanted a survey with approved Surveyor before releasing money or covering the boat. No unusual challenges.


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## MedSailor (Mar 30, 2008)

Minnewaska said:


> Not so fast. This appears to be the case, as most loans are paid current and are not a priority, nor do most banks reconfirm these things.
> 
> However, if you find yourself in a bind and can't pay, there is nothing more powerful for the collection department at the bank than a strong case of fraud. If they can demonstrate intent to defraud, it is criminal. Although, just a civil action on fraud is much stronger than simply trying to get a judgement on a note or repossess collateral.


I wasn't implying that he'd be able to keep the boat and not pay the loan. What I meant by saying "once they write the loan they've written the loan" is that once they write the loan you are usually done answering their questions.

If he doesn't pay the loan then sure, they're going to repossess it, but nobody is going to repossess a loan that is currently being paid on.

As for fraud, I wasn't encouraging any felonys here. If the contract is written is stone cold clear language about living aboard and you lie about it, then yes, that is likely fraud. What I was recommended was taking advantage of any ambiguity there might be, just as your lawyer would do.

MedSailor


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## jobberone (Jun 24, 2012)

We are currently looking for our first boat and in the market for a used 37-50 footer. We'd prefer a cat in the 37-44 range.

I talked with USAA today and we both didn't know some answers.

He stated the boat had to be bought on US soil. I wondered about that. I asked him if it needed to be registered and flagged as a US vessel as well. Then the question of certificates or whatever came up and I have no idea about that. 

So if we find a boat in BVI under Costa Rican flag and ???documentation/certification/registration how do I finance that?


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## Minnewaska (Feb 21, 2010)

Where do you plan to keep the boat?

If you are a US citizen, its going to be harder to flag it in another country, unless you set up a trust and pay attorneys for the rest of your life.

The charter companies commonly sell their inventory, but I would highly caution a new sailor from doing that. Those boats take a beating and you will pay for that in maintenance. If you're experienced, you can find a good deal.... maybe. They might, on the other hand, tip you off on where you can obtain financing down there.

Your problem is going to be insurance, even if you can find the financing. Insurance companies are not keen on taking the risk of a new sailor on a large boat. If you break it, smack into a dock, hit someone else, don't tie it to the dock properly, etc, they have to pay. They want to see that you've passed formal accredited training, have experience and no claims. While you can own a boat without insurance, you can't finance one without it.

If this is something you really think you want to do, I would spend the time and money to take a liveaboard or bareboat cruising course with your wife, instead of the captained charter. It is full time, so you won't be able to fish or scuba, but you would get a little snorkeling in. You usually have class at breakfast aboard, then have practical lessons all day and a written test at night. It isn't hard, but its intense and everyone I've known that has done it has become a reasonably good fair weather sailor in a week. Better, you will have an accredited certificate and know what you are doing.

If you can slurge, do the course over week one and then bareboat charter with just the two of you for week two. Other than the cost, the only downside I can see is that the two of you decide you don't like it. However, that would be the case with your captained charter as well.


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## jobberone (Jun 24, 2012)

Minnewaska said:


> Where do you plan to keep the boat?
> 
> If you are a US citizen, its going to be harder to flag it in another country, unless you set up a trust and pay attorneys for the rest of your life.
> 
> ...


Oh I agree completely. We will do this with a captain to get her feet wet on the open water. I've routinely fished 50-80 miles offshore but only power so I need to learn to sail and continue to learn the sea. If she thinks she like the sea then we'll take courses together.

I'm still in the acquiring knowledge about buying a boat but before I do I'll learn to be a newbie day sailor before purchasing it and certainly before captaining it anywhere particularly around docks and the public.

I'm looking to keep the boat at anchor in the Caribbean and SE US.


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## PrebleBoy (Dec 27, 2012)

Further Update: First Bristol 40 did not pan out so I continued to look until I found a beautiful Sailmaster 45 designed by Sparkman and Stephens. We came to a price and survey looks good. We will sign this week.


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## benesailor (Dec 27, 2012)

Congrats prebleboy, That's a stunning boat! Need more pics

I used USAA as well. It took 2 minutes to approve and they could care less if you lived aboard. I had other banks say no way. It was almost scary!
You didn't happen to check pentagon federal did you?


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## Veracity (Apr 4, 2013)

RRRR... I'm in the market having lost my Tartan 37C to Sandy and set my eye on Marage, sent and email to SS and was hoping to have a look this weekend! Absolutely beautiful. Good luck with her!


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## Reefpoints (Sep 7, 2011)

I'm another happy USAA customer.


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## PrebleBoy (Dec 27, 2012)

Here is _Liberty_, formerly _Marage_ before we set off for Newport, RI last weekend. Sorry to take her from you Veracity, but she has the best lines I've ever seen in fiberglass so I could not let her go. There are some nice Bristol 40s for sale in Mattapoisette, MA on Yachtworld.

Unfortunately her engine, which started fine for the sea trials, did not start so we made the dinghy up to power. My father, uncle and I worked together to pull her in at the Navy marina in Newport beautifully.

We averaged 8.5kts on the 103nm sail, broad reaching most of the way! At one point we hit 10kts if you can believe it! I've never sailed that fast on a CCA boat.

Now to fix/replace the starter motor on this unknown Westerbeke 53hp.


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## Veracity (Apr 4, 2013)

She is certainly lovely, Prebleboy. I was actually interested in something a bit roomier but I don't think I'd be able to resist her. I looked at the listing and thought I'd be happy just sitting and eyeing her on her mooring. Stunning. Anyway contracted yesterday for a Niagara 42 - more of a truck to your new jaguar but I think she'll work out for the kind of cruising we do. Maybe catch up with you in Newport or Block I or Nantucket or .... this season.


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## RobGallagher (Aug 22, 2001)

PrebleBoy said:


> Here is _Liberty_, formerly _Marage_ before we set off for Newport, RI last weekend. Sorry to take her from you Veracity, but she has the best lines I've ever seen in fiberglass so I could not let her go. There are some nice Bristol 40s for sale in Mattapoisette, MA on Yachtworld.
> 
> Unfortunately her engine, which started fine for the sea trials, did not start so we made the dinghy up to power. My father, uncle and I worked together to pull her in at the Navy marina in Newport beautifully.
> 
> ...


That is one fine looking vessel. More pics!


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## ACKward (Jan 26, 2010)

Congrats -- on both the vessel and on joining the long line of satisfied USAA boat financing customers. They were terrific when I bought mine 3 years ago; pretty much the definition of no hassle financing. And while they wouldn't refi me this year without a fresh survey (NADA guide value was bizarrely low for my boat and, unfortuantely, it's the only secondary source they allow), they were able to able to knock my rate down by 3/4 over the phone. Unquestionably the best.


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