Whether you are a U.S. Coast Guard boat owner looking for a mortgage, you may wonder if there is a unique program designed just for people in your situation. In any case, there is! Borrowers who meet the requirements for the preferred ship mortgage program offered by the United States Coast Guard are eligible to receive preferential interest rates and other incentives.
However, before you apply, you should ensure you have a solid understanding of the prerequisites for qualifying and the steps involved in the process. This blog article will provide you with all the facts you need to make an educated choice on whether or not you should participate in this program. Before you send in your application, here are some things you should know:
Your Current Mortgage Must Be At Least 15 Years Old
A “preferred ship” mortgage may be available if you’ve had the same mortgage for at least 15 years and are in the market to renew or refinance. This mortgage type does not charge additional costs if you decide to finance a second home. All that is required is that your present house is paid in full and the new property serves as your primary residence. After just five years of continuous ownership, you may renew your mortgage and keep your preferred ship mortgage rates (though all the other requirements must still be met).
So, if you’ve lived in your house for over 30 years and your mortgage is up for renewal in the next six months, you can be eligible for a preferred-ship mortgage at a rate similar to the going rate. If you have two or more mortgages on the same property, you are “piggybacking,” Most lenders will not approve your loan because you have amassed too much equity and might lose it if your income or spending change.
The Average Age of Your Boat Must Be At Least 25 Years Old
Many individuals express an interest in living aboard a boat, but few are ready to put in the time and effort required to prepare the vessel for occupancy. You may get a preferred ship mortgage loan these days for a boat, provided you have enough money and a desire to live on the water. Financial institutions specializing in mortgages for boats at sea are referred to as “preferred ship” lenders. The average age of your yacht must be at least 25 years old. The bank will want extra security in place if it’s younger than that.
This implies that they will provide you with smaller monthly payments, but you will be held more accountable for completing those payments on time. It would help if you talked to your bank before buying a new boat to convert it into a floating residence. They may not give you money against it if they don’t believe it might be transformed into a living area or if they don’t have adequate security because of how new it is.
For A Preferred Ship Mortgage, You Must Keep Your Boat in the United States
Suppose you are a citizen or permanent resident of the United States and are considering getting a boat mortgage. In that case, you may wonder if there is a significant difference between getting a loan from your local bank or credit union and getting a loan from a “preferred” company specializing in boat loans. These speciality lenders provide rates and conditions that your standard bank likely won’t. So, how can you know whether applying with them is worthwhile?
The good news is that despite appearances, the application procedure for a loan from one of these lenders is comparable to that of the more conventional choice. But before you begin, it’s essential to learn as much as possible about what’s required, so you don’t waste time or get disheartened. One significant distinction between applying for a boat loan and a conventional mortgage is that you will be required to retain your boat in the United States.
You Must Have Owned Your Boat for At Least 5 Years
You will be needed to give evidence that you are the owner of the vehicle and that you have been paying payments consistently. At least five years must have passed, with each payment being paid on time. It is possible that you will not be able to make future payments reliably if you have not paid payments consistently over the last five years. As part of the terms of the loan agreement, your lender will want to verify that there is no outstanding amount that is owed on the boat. If a sum is still owed, your lender may stipulate that the whole amount be paid off before they would agree to offer the preferred ship mortgage.
You may have heard that the U.S. government is trying to crack down on mortgage lenders for some unscrupulous practices, but did you know there are still lenders out there willing to work with certain vessels? If you’re planning on getting a preferred ship mortgage (or other watercraft), contact the U.S. Vessel Documentation Center at (800) 340-7580 for more information.
