How do you sell a boat with a marine mortgage.

[Major Catastrophe]

Reading all these scare threads about buying boats with some sort of mortgage lottery thrown in, I was wondering then, how do you sell a boat that has a mortgage?

One assumes that as the boat is mortgaged, the owner does not actually have the readies to reimburse the bank, so how does he go about facilitating the transfer and assuring the buyer that the mortgage is cleared and the bank is happy?

The bank cannot say the mortgage is settled until it receives the money and the buyer may not want to part with cash until he has paperwork confirming the mortgage is settled.

I am assuming that any deposit is not enough to cover the debt.

 

[CX54WEK]

Can the buyer pay the mortgage company off their share and the vendor whatever is left?

 

[PaulGooch]

Until JFM comes along to fill in the small print

Typical way of doing such things in other fields would be for the buyer to pay the outstanding finance direct, if it was a private sale. You could get a letter from the bank detailing the outstanding amount and pay it to them. The balance would then go to the seller.

If it was being bought via a broker, you pays your money to the broker anyway, so the broker would then settle the finance and pay the balance to the vendor, after deducting his meagre commission of course.

 

[jfm]

Until JFM comes along to fill in the small print

Typical way of doing such things in other fields would be for the buyer to pay the outstanding finance direct, if it was a private sale. You could get a letter from the bank detailing the outstanding amount and pay it to them. The balance would then go to the seller.

If it was being bought via a broker, you pays your money to the broker anyway, so the broker would then settle the finance and pay the balance to the vendor, after deducting his meagre commission of course.

Yup there are many ways to skin this cat but normally the lender will give a settlement figure (in writing, so as to make the buyer happy) which is the amount of money needed to repay the loan on some specified date next week. Buyer then makes 2 bank transfers, one to lender for the "settlement figure" and one to vendor or broker for the balance

This is entirely analogous to what happens 99% of the time when mortgaged houses are bought and sold in the UK. Only difference of course is that a yacht broker client account is not as secure as a solicitor client account, so a sensible buyer would pay the lender directly rather than pay the broker

Now if the buyer is also borrowing it might get interesting! I expect it is easier if buyer borrows from same bank as vendor, but that will often not be possible (eg BoS) or desireable. Anyway, buyers bank will set out the completion steps that they want to see done

 

[RIN]

Until JFM comes along to fill in the small print

Typical way of doing such things in other fields would be for the buyer to pay the outstanding finance direct, if it was a private sale. You could get a letter from the bank detailing the outstanding amount and pay it to them. The balance would then go to the seller.

If it was being bought via a broker, you pays your money to the broker anyway, so the broker would then settle the finance and pay the balance to the vendor, after deducting his meagre commission of course.

Yes that's the way we did it when we bought our boat - private sale. The owner declared the mortgage to us, I spoke to the bank and they asked for the outstanding balance on the mortgage to be paid by us directly to them as if we paid the seller directly and he did not pay them, they would have an interest in the boat. We paid the the balance to the seller.

Still plenty of potential for that to go wrong though if the seller was not honest.

It was part 1 registered. I still have the original part 1 registration which says that the certificate is "not proof of ownership" and also that "registered mortgages are not shown" So if the seller had not told us about the mortgage, we wouldn't have known

 

[jfm]

I still have the original part 1 registration which says that the certificate is "not proof of ownership" and also that "registered mortgages are not shown" So if the seller had not told us about the mortgage, we wouldn't have known

Yes, if a boat has a mortgage registered by the bank on the part 1 register, the part 1 light green laminated certificate will not show this. The only way to see the mortgage is to apply to Cardiff for a transcript of the full registration, for a fee of £20 ish. Then you see the mortgage registration

 

[Major Catastrophe]

Yes, if a boat has a mortgage registered by the bank on the part 1 register, the part 1 light green laminated certificate will not show this. The only way to see the mortgage is to apply to Cardiff for a transcript of the full registration, for a fee of £20 ish. Then you see the mortgage registration

Unless it is not registered, as has been proved on the other thread as often being the case. But then this is thread drift as I was just asking about how a known mortgage is settled satisfactorily.

 

[Kipper]

As above have said. I sold mine recently with some of the marine mortgage still outstanding. Though it started as a private sale a broker introduced the buyer so I agreed to pay them a fee.
The buyer was given the settlement figure which he paid through the broker and then recieved a notice of no further interest in the boat. He then paid me the difference ( after the brokers fee) directly into my bank. This kept everybody happy and I didnt have the worry of getting my money out of the broker. It all happened within an our or so.

Gary