Boat finance is the term commonly used to describe ways of raising the funds necessary for the purchase of a boat – this might be anything from a pleasure craft or cruiser for your own recreational enjoyment or a vessel put into commercial service as part of a business venture.
Probably the most common form of boat finance is a marine mortgage – especially if the boat in question is anything significantly bigger or more valuable than a simple sailing dinghy.
It is important to remember that marine mortgages come in many different shapes and sizes – with varying terms and conditions, and, most critically, rates of interest.
To help you negotiate the tricky waters of the marine mortgage market, you might want to draw on the advice and experience of an independent finance broker who specialises in the provision of boat finance and marine mortgages.
You are probably familiar with mortgages that are advanced for the purchase of your home or buy to let and other residential and commercial property.
You might also have arranged for a loan to buy your family car.
A marine mortgage is somewhere between the two of these – it is effectively a secured loan, a mortgage against which the security is the boat itself, and with regular monthly repayments made throughout the agreed mortgage term.
If you are funding the purchase of your boat with the help of a marine mortgage, you have ownership of the vessel.
Because the loan is secured against the boat itself, however, you must remember that if you default on the mortgage repayments, the lender may apply to the courts for repossession of the vessel – and if its market value is then less than the outstanding balance of your marine mortgage, you are still in debt to the lender.
A marine mortgage is, of course, a legal contract between the lender and borrower.
In the case of real estate mortgages, details are registered by the Land Registry.
For boats, the relevant register is the Register of British Shipping, which carries the name of any vessel sailing outside British waters and the details of any marine mortgage which may be outstanding.
The Register of British Shipping is used by all manner of vessels, including pleasure craft.
Any mortgage lender is almost certain to insist that the mortgaged property is adequately insured against loss or damage;
This is to protect the lender’s interest in the property and to ensure that it remains sufficiently intact as security against the outstanding balance of the loan.
The requirement is also in place when it comes to marine mortgages.
It is important to remember that any lender’s assessment of the sum which your boat needs to be insured is typically limited to the value of the outstanding mortgage balance, and does not necessarily reflect the mortgage cover which you need for the comprehensive protection of the vessel against loss or damage.