Let’s face it: boats aren’t cheap. For most prospective buyers, securing financing is a necessary path toward ownership. Amidst your research in finding the boat of your dreams, you may not have spent much time learning about the different types of mortgages that can be ascribed to vessels. One particular instrument you would be wise to know about is the Preferred Mortgage, which specifically relates to a vessel’s United States Coast Guard documentation.
What Exactly is a Preferred Mortgage?
So, first things first, what exactly is a Preferred Mortgage? Essentially, it’s a mortgage that is given preferred status as a maritime lien. In other words, in the unfortunate event of a default, a Preferred Mortgage can give the lender a priority claim on the vessel. Additionally, the Coast Guard is barred from making special changes in documentation including, but not limited to, change of vessel ownership, name, and hailing port without the expressed consent of the mortgagee.
Why Do Lending Institutions Value Coast Guard Documentation?
A Preferred Mortgage definitely gives lending institutions leverage, so it’s not surprising that it’s a preferred instrument on their end. With this in mind, they also will often require that a vessel be registered with the United States Coast Guard. Vessel documentation is vital to the borrower, as well, as it will make it easier for you to get financing in the first place. You should also consider the other benefits of documentation, such as how easy it can make travelling to other countries, as your documentation number will be recognized by many foreign nations, allowing for much more streamlined passage.
Are You Interested in Documenting Your Vessel?
If you’ve done your financing research, and have come to the logical conclusion that vessel registration is in your best interests, you want to consider using a third party service for your application needs. At U.S. Vessel Documentation, Inc., we aim to make registering your vessel as easy and painless as possible. We have a team of documentation experts on staff who will look over your application to ensure that everything is entered correctly and accurately before we submit it to the Coast Guard. Please take a moment to explore our website — you’ll see that we offer a wide range of services to accommodate all of your vessel documentation needs.