I'm getting ready to close on our new boat. The mortgage company wants to charge ~$500 for US Coast Guard and New York State registration and documentation. I just spent some time on the web researching the registration/documentation process and it looks fairly straightforward - just fill out the required forms and mail them with a check (which is a lot less than the $500). Am I missing something? Why do all the mortgage companies make a big deal about documentation fees? Thanks.
new boat registration and documentation
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Mortgage requirements
Often the lender requires documentation on the boat as a condition of the loan. This gives them a more secure lien with a preferred ship mortgage. They believe that by paying a service that specializes in getting boats documented, that they can be more certain it will get done than if you do it yourself. At least this was the case with my loan.
Often the lender requires documentation on the boat as a condition of the loan. This gives them a more secure lien with a preferred ship mortgage. They believe that by paying a service that specializes in getting boats documented, that they can be more certain it will get done than if you do it yourself. At least this was the case with my loan.
May not be as easy as it looks
The CG is very, very particular about required documents. They cannot be copies as I recall, they must be originals. If your seller fails to cooperate and provide his originals like mine did, you might have problems. I am very glad that we had a title service handle it. It cost us $350 ten years ago. Getting the seller to cooperate and provide the originals took three or four months and a variety of threats from the title company. I was told later that the seller had better offers and wanted to back out of the deal but we had already paid in full for the boat. Sellers remorse like buyers remorse is a very real phenomenon and don't ever forget it. If it is a brand new boat purchased from a dealer, that shouldn't be a problem for you. If you are buying from an individual, make sure your ducks are in a row. Get original documents and don't settle for anything less before the final payment. A documented boat is much easier to encumber with a lien by anyone who wants to do so. It is more like selling a house. The possible lienholders include anyone who has a claim, is injured aboard or does work on the boat, utility companies, marinas, etc. A registered boat is therefore easier to sell as compared to a documented one.
The CG is very, very particular about required documents. They cannot be copies as I recall, they must be originals. If your seller fails to cooperate and provide his originals like mine did, you might have problems. I am very glad that we had a title service handle it. It cost us $350 ten years ago. Getting the seller to cooperate and provide the originals took three or four months and a variety of threats from the title company. I was told later that the seller had better offers and wanted to back out of the deal but we had already paid in full for the boat. Sellers remorse like buyers remorse is a very real phenomenon and don't ever forget it. If it is a brand new boat purchased from a dealer, that shouldn't be a problem for you. If you are buying from an individual, make sure your ducks are in a row. Get original documents and don't settle for anything less before the final payment. A documented boat is much easier to encumber with a lien by anyone who wants to do so. It is more like selling a house. The possible lienholders include anyone who has a claim, is injured aboard or does work on the boat, utility companies, marinas, etc. A registered boat is therefore easier to sell as compared to a documented one.
It Was Suggested To Me...
...by the broker to have a documentation service do it for my boat. I had it done quite a few years ago and the Doc Company did all the leg work, and such, for me. I didn't have to hassle, it all.
...by the broker to have a documentation service do it for my boat. I had it done quite a few years ago and the Doc Company did all the leg work, and such, for me. I didn't have to hassle, it all.
coastg guard
go to hailing port services web site; they do it all for a lot less money, and they are pros.
go to hailing port services web site; they do it all for a lot less money, and they are pros.
Shop Lenders Around
John W is correct. The lender feels more comfortable having a documentation company of their choice handle the transfer and registration. They usually have a company lined up to whom they funnel all their business through. Sometimes these lenders loose track of the impact these increasing costs have on the consumer as they don't pay for them. The way to keep them honest is to shop the deal around indicating you are very concerned about the interest rate and fees. Let them loose a few deals and they will talk to the vendor to get the costs more in line with the market. I have not documented a vessel in a long time but $500 does seem a little steep.
John W is correct. The lender feels more comfortable having a documentation company of their choice handle the transfer and registration. They usually have a company lined up to whom they funnel all their business through. Sometimes these lenders loose track of the impact these increasing costs have on the consumer as they don't pay for them. The way to keep them honest is to shop the deal around indicating you are very concerned about the interest rate and fees. Let them loose a few deals and they will talk to the vendor to get the costs more in line with the market. I have not documented a vessel in a long time but $500 does seem a little steep.
I did that last year
The loan broker set me up with a company who would handle the documentation. The cost was $500. When I got everything back from the Coast Guard I saw that the actual cost to the Coast Guard was $150. I was charged $350 buy the documentation service to fill out 5-6 forms, have it noterized and fed-x it along with a copy of the survey and loan documents. Probably could have done it myself in 2-3 hours at a cost of maybe $50 total.
The loan broker set me up with a company who would handle the documentation. The cost was $500. When I got everything back from the Coast Guard I saw that the actual cost to the Coast Guard was $150. I was charged $350 buy the documentation service to fill out 5-6 forms, have it noterized and fed-x it along with a copy of the survey and loan documents. Probably could have done it myself in 2-3 hours at a cost of maybe $50 total.
It is just a ripoff
I have had 4 documented boats. The first 2 were done by the $500 crooks. The last two I did myself. $133 total cost. It takes less than an hour to do everything to get it ready to send to the USCG. I called the USCG on one occasion for clarification on part of the instructions and they were very nice and very helpful. I had absolutely NO problems. You can go online and fill out all of the forms for printing on your computer. Just sign them and send them in with the check. They will even accept credit cards. If your lender is requiring the documentation you may have no options if you want them to make the loan.
I have had 4 documented boats. The first 2 were done by the $500 crooks. The last two I did myself. $133 total cost. It takes less than an hour to do everything to get it ready to send to the USCG. I called the USCG on one occasion for clarification on part of the instructions and they were very nice and very helpful. I had absolutely NO problems. You can go online and fill out all of the forms for printing on your computer. Just sign them and send them in with the check. They will even accept credit cards. If your lender is requiring the documentation you may have no options if you want them to make the loan.
Hey MJB, Do It Yourself If They Let You
Three years ago I bought my boat with credit and told them I wanted to handle the documentation process. You are right, it is very straight forward. Fill out four forms as I recall, include the check, and mail away. Now I don't know about state registration as we do not have to do that in Maryland if a boat is documented. NY may be different. $500?? No way if I can avoid it!
Three years ago I bought my boat with credit and told them I wanted to handle the documentation process. You are right, it is very straight forward. Fill out four forms as I recall, include the check, and mail away. Now I don't know about state registration as we do not have to do that in Maryland if a boat is documented. NY may be different. $500?? No way if I can avoid it!
Ripoff? Crooks?
The terms ripoffs and crooks make me think of someone taking something from me against my will. I remember agreeing to the use of a documentation service in our case. And they are running a business. I suppose they could hire high school dropouts at $7 per hour working out of their kitchen, but I think a lot of the services use competent people, in a nice office. They may even provide health and other benefits to their employees. I think if it were such a racket, many more of us would be in it. I wasn't thrilled with the idea of paying for the service at first, but in the end, I appreciated not having to mess with it, with all the other things going on at the time. Besides, $500 wasn't the largest expense involved in my purchase, by far.
The terms ripoffs and crooks make me think of someone taking something from me against my will. I remember agreeing to the use of a documentation service in our case. And they are running a business. I suppose they could hire high school dropouts at $7 per hour working out of their kitchen, but I think a lot of the services use competent people, in a nice office. They may even provide health and other benefits to their employees. I think if it were such a racket, many more of us would be in it. I wasn't thrilled with the idea of paying for the service at first, but in the end, I appreciated not having to mess with it, with all the other things going on at the time. Besides, $500 wasn't the largest expense involved in my purchase, by far.
Also liability...
if something isn't right in the process and the lender looses in a bankruptcy, reposession, or similar proceeding due to a mistake or failure by the documentation processor, the lender will go against them to recover. The processor is guaranteeing their work and on the hook for it. Given the value of today's boats, that's a lot. You are paying for more than just the time to complete the forms. It's more like title insurance on your home. If you think of it that way, it should be a percentage of the purchase price (as in title insurance), rather than a flat fee. BTW, I think my lender covered the doc fee in my last transaction. But that was the 3rd time I've used them, so that might be it. I know on a recent refinance they covered the redocumentation fee.
if something isn't right in the process and the lender looses in a bankruptcy, reposession, or similar proceeding due to a mistake or failure by the documentation processor, the lender will go against them to recover. The processor is guaranteeing their work and on the hook for it. Given the value of today's boats, that's a lot. You are paying for more than just the time to complete the forms. It's more like title insurance on your home. If you think of it that way, it should be a percentage of the purchase price (as in title insurance), rather than a flat fee. BTW, I think my lender covered the doc fee in my last transaction. But that was the 3rd time I've used them, so that might be it. I know on a recent refinance they covered the redocumentation fee.
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