marine mortgage

[Ships_Cat]

I do not think anyone is contesting at all that it is possible to finance the purchase a boat without it being on the register. Obviously that is just a matter between the lender and the borrower and they can call the financing arrangement whatever they like, and whether they call it a secured loan, money laundering, repayable gift, etc or even a marine mortgage is entirely their own business. But whatever they call it does not change what it actually is.

So yes, I do believe you.

John

 

[Birdseye]

Not true. A mortgage has a precise meaning namely that it is a loan secured against specific property. In this case a boat.

In the case of a Pt 1 vessel the lender notes this mortgage on the Register under the Merchant Shipping Acts and it is open to your scrutiny. It is a charge against your boat.

In the case of an SSR boat he cannot do this, so apparently the mortgage is structured in such a way that actual title to the boat is vested in the lender. He keeps the docs which proves the chain of ownership. Reputedly this is an even safer deal for the bank than the simple charge allowed for Pt 1 boats

It really depends on the lending institution exactly how they structure the deal. It might even be a top up mortgage on your house or a personal loan. Check the small print.

Note : I am not a lawyer. So if this issue matters to you, ignore what I have written and get proper legal advice.

 

[Ships_Cat]

<<<A mortgage has a precise meaning namely that it is a loan secured against specific property>>>

I agree totally with that Birdseye and have not said otherwise. However, if I were really picky, I would point out that a "mortgage" is not a loan, a mortgage is actually the security you give the lender. However, I slip up on that too /forums/images/graemlins/smile.gif.

What I am referring to is what a "marine mortgage" (both words together) is normally taken to be and that is narrower than the dictionary definition.

Using the land case as an example where the of the use of the term mortgage is narrower than the dictionary definition. In many countries a "mortgage" with respect to land is generally recognised as being the security against land where the lender's interest is noted in the property register and available for public inspection. We generally do not describe the securing of a loan against land in any other non publically scrutinisable way as a "mortgage". For example, in some countries the loan against property may be commonly secured by a Deed of Trust which is also available for public scrutiny, and in dictionary terms the security given is a mortgage, but because it is for land it is not called a mortgage - in the case of land the term is usually and in most places limited to security noted in the property register.

Similarly, a "marine mortgage" (using both "marine" and "mortgage" together as a term) is generally recognised as security against the boat and which is noted in the Register of Ships which is available for public inspection (just as for land, anyone can go to the Register of Ships and inspect it to check the registered ownership and any encumberences).

As I said in my last post, between the lender and the borrower they can call it whatever they wish, am just saying what the generally accepted usage is for a marine mortgage.

{Edit: quite a big document and Canadian but if anyone happens to be particularly interested it describes in parts of it how a "marine mortgage" works with respect to the Register of Ships - http://www.tc.gc.ca/marinesafety/TP/Tp13414/TP13414E-rev2000-07-27.pdf. In the same way as Birdseye points out it uses the term "mortgage" in the general way as being a security over the vessel, then specifically says eg page 6, that when a mortgage is registered with the Registrar of Ships it then becomes a "marine mortgage".

Again, I emphasize that the parties to an agreement can call the security given whatever they wish, but the term "marine mortgage" is usually taken to refer to a particular type of security}.

John

 

[Birdseye]

Think we are in danger of descending into semantics here, but I for one have learned something from the thread. I shall never use a marine mortgage - my income wouldnt support it. But I shall certainly be reluctant to buy a second hand boat not on Pt1 because of the difficulty of establishing that she isnt mortgaged and isnt accompanied by other debts.

I had not previously realised that you could have a marine morgage on an unregistered boat, and that the mortgage debt can be pursued against a new owner.

 

[cliff]

Hear, hear.

Is there anyone out there who is so naive as to think there is not some central register of marine mortgages issued, paid up or outstanding?

How many marine lenders are there in the UK? - Not that many in real terms! Banks generally refer applicants to marine finance houses of which there are few.

When one applies for the mortgage one has to provide evidence of the providence of the vessel such as all bills of sale going back to original owner if available, make and model of vessel, HULL NUMBER, previous owner's details etc. From that little list it is easy to find out if there is an outstanding mortgage on the vessel.

It is similar to the motor insurance companies getting together and creating a central database of customers to prevent fraud.

Apply this scenario to the marine finance houses and it is easy to see how straight forward it would be to check a vessels credit / loan history.

Combine this with the applicant's "ability to pay" and past track record and there is a strong basis to approve the loan secured on the vessel. We are of course talking about pleasure craft under 24m not commercial vessels.

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[Ships_Cat]

I agree Cliff, one cannot rely on there being any central register of mortgages or marine mortgages over a vessel.

I trust that something else that has become clear is that if one intends buying a boat that is registered on the ships' register then one should search the register to see if there is a marine mortgage registered against the boat. I would guarantee that the majority of pleasure sailors do not do that search.

It is still no guarantee, but as far as a registered vessel is concerned it certainly reduces the odds.

John

 

[fireball]

Mortgage the house ... then at least if you can't repay you've still got the boat ... far more important!! /forums/images/graemlins/grin.gif

 

[Ships_Cat]

Certainly is the best way where we live AFrogley.

Fortunately, neither our house nor boat is mortgaged - maybe I should do so and have more boats /forums/images/graemlins/smile.gif.

John

 

[Joe_Cole]

[ QUOTE ]

Is there anyone out there who is so naive as to think there is not some central register of marine mortgages issued, paid up or outstanding?


[/ QUOTE ]

Interesting. Are you saying that this is in addition to the SSR? If so, where is it? How do we access it?