Getting a mortgage on island property is not different, the process is all the same, HOWEVER....

Save yourself some trouble and advise your friend to discuss his mortgage with a local bank and don't try to go after a loan with a broker or big bank who are not adequately familiar with underwriting a seasonal island property. I ran into this with my mortgage broker, the deal eventually got done but not before dealing with some unnecessary heartache finding out a week from closing they would not close on the loan until they had a buyer for the mortgage all lined up and they did not typically service these kinds of loans. I was furious since had I known that AHEAD of time I never would have engaged them in the first place. That could very well have spelled disaster on the deal since the seller could have easily walked away instead of giving us an extension to get the loan done.

Had I known better I would have gone to Meredith Village Savings Bank, they are great to deal with and get the whole island property thing.

I agree with MAXUM, give Pam Noble @ MVSB a call or email.

pnoble@mvsb.com
direct: 603.279.9291

Ditto for MVSB and Pam Noble. None of the "how far is the nearest fire hydrant" and similar questions. The Bank gets the reality of Winni real estate.

Trying to tie your boat loan into your mortgage will not be possible, not to mention why spread out your boat payment over 30 years? It is possible to wrap in improvements as long as you have enough percentage of the total combined purchase to put down, and provided it appraises ok in completed state. Island appraisals can be tricky.

If there is sufficient equity position, he could put it on a HELOC but doing the simple math it doesn't sound like that will work unless they are putting a lot down. Assume a $350k all in on the house, you will need 20-25% down plus closing costs. That leaves you are $280k mortgaged with 20% down, or $70k+ out of pocket. In order to have enough equity on top of that to buy a boat on a heloc you would end up having to have a much larger equity stake in the house, or more cash outlay up front.

In short, buy the boat separately. It wont work otherwise. Also, make sure they have plenty of cash to start down this path, you are not going to get a island mortgage with 3% down and PMI... They will want 20-25%.

I will mirror the other comments made, don't waste your time with a big lender. Go to Laconia Savings, MVSB, or even Newburyport 5 Cent.

Thanks for the comments. I too used MVSB when I bought my home on the lake.

Good point on the equity piece, 20% down is the bare minimum for a second home as a general rule, they can get even more needy if it's seasonal or if the value of the house is out of the value percentage skew versus the value of the land. In other words if the value of the building is to little of the overall land and building package price that can set off red flags.

If it were me I would worry about securing the property first and worry about buying a boat and improvements later. In fact your friend may find out quickly that spending big bucks on an island boat isn't necessarily a good idea. Whatever boat he/she gets will inevitably be used not just for pleasure but also as a freight/trash hauler. Not necessarily something you'd want to do with a 50K boat. Plus having two boats is really ideal, when one breaks you have an alternative way off the island.

So, your friend wants to buy a second home with no money down, improve the home and buy a boat? Isn't America great.


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Most all fixed rate loans are sold in the secondary market and there are guidelines for them to be accepted. Even when they are not sold and instead held by a local bank, the local bank generally uses the same underwriting guidelines to process the loan. That way if the bank ever wishes to transfer servicing the new lienholder knows it meets appropriate criteria.

The value that will be used by the lender is the lesser of the appraised value or the selling price.

The type of financing this person is looking for would have been tough to get even during the boom days of 2004-2007.

Did I miss something? Where does it say "no money down"?

I also used MVSB, and worked with Lori Borin. Great people.

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It says purchase price $300, $50 for upgrades and $50 for a boat and a mortgage of $400. Math never lies.



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Yes you did. Basic math: Home price $300,000 + boat of $50,000 and $50,000 for improvements. mortgage loan he is seeking is $400,000. Basically, the person is asking for a loan well in excess of the $300,000 home purchase price.

"For an easy math instance" implies fake numbers. We have no idea what the OP's friend is dealing with for numbers.

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Why So Literal
 

Why so literal? <in the voice of the Joker>

The post asked about loan strategies; one vs multiple. The numbers supplied were used as an illustration.

Wow, too literal is right! I gave ballpark numbers for he purpose of the question . They would put AT LEAST 20% down. But with how low rates are, they will put as little down as allowed without having to deal with PMI.

Thanks for the feedback. Especially about the boats. Would perhaps a used 15 foot Boston whaler and a 22-24 pontoon be a good combo? I know a lot is personally preference...

It all depends on where they are looking, but in many places on the lake that would be a decent combination. Do they have a particular island in mind?

If they were broad side of Rattlesnake that may not be the best options, but on Cow it would be good for example. Another part of it pertains to where they are calling "home port" on the mainland. If they were launching from Gilford, but boating across to Cow they may want something a bit more suited to rough water. Again, just using Cow as an example.

Yes definitely agree on this one. Having a pontoon gives you a nice platform to haul big bulky items.... small boat really comes down to where you are and how much you plan to use it. I keep my big boat on the mooring in front of my place all season, use the little one to commute. Can't go wrong with a Whaler, those are great but can be pricey for what they are.

The broads side of Rattlesnake is sort of an exception, most other islands are not subject to the same type of conditions on a rough day.

Docking at Camp
 

Another aspect that needs to be considered when buying a boat is the size of the dock at the cabin. That can be a limiting factor, especially if extending the dock is not an option.

Also in my opinion whats more important then the actual length or size of the dock is the water depth at the dock. I personally have had a very long dock since back when Cigarette boats frequented Winnisquam. With out that long length I would not be able to pull my inboard in or out any time of the year, even at the end of the season I have to watch my depth or of course chew up a prop.

I am sure you know different boats need different depths. Keep an eye on what you buy or atleast keep it in mind.

One other piece of advice, speaking from experience. If your friend is serious about purchasing property the best advice to give them is to employ the help of an experienced and knowledgeable real estate agent that is not just familiar with island property, but specializes in it. While it's helpful to seek out advice from a forum like this especially from those of us that are islanders, it's always good to have somebody that can help answer some of these questions and guide your friend through the process. It's not just about finding a piece of property but finding answers to who and where to go for financing, insurance, what each island has to offer or not, dealing with questions of main land logistics etc...

I highly recommend your friend contact Nancy and Doug Deporter of Keller Williams. Nancy was my agent when I bought my place and provided me with invaluable advice. They both are awesome to work with AND they are both islanders themselves. Visit her website at http://www.nancydeporter.com, or better yet have them give her a call. Several of us on this forum have employed their services and been very pleased as a result. They really are the best out there.

A mortgage is "secured" by the appraised value of the property. As a rule of thumb you can get a mortgage for up to 90% of the property value without a lot of hassle, and assuming you have good credit.

For your numbers, you're talking a $300K mortgage and another 33% ($100K) in extras, that is very unlikely to happen.

Also, while mortgage rates may be relatively low right now, the smart money is still with putting as much of a downpayment as possible without totally depleting savings/emergency funds. From your posts it kinda sounds like your friend may be stretching things a little thin. I'd buy the property with a solid downpayment and get a cheaper boat to start. There are plenty of perfectly good boats to be had in the $15K range.

Islands are a bit different. The banks usually require 20-25% down as these are considered seasonal, second homes. They are also held in house (portfolio loan) instead of brokered.

I would go with a min 17 or 18 ft on the whaler.

I had a 16 dauntless that worked great. I would cross from Mark to Glendale in all conditions. It was perfect for running over to grab someone or store runs and was small enough that I never had a problem finding a place to park even when the docks were busy. Much easier than taking a 25' pontoon. I had a few Rage 14 and 15's as well but they were rather finicky with the OMC jet drive engines.

I did LOVE my 20 Dauntless with the 200 Verado though.

Again, this really all depends on where the property is located.