In my experience, lenders insist on documentation because they can charge exorbitant fees for a few minutes worth of work. It''s more profit in their pockets. No, you don''t have to do it, but it''s a good idea since the boat''s already documented. In some states (such as MD where I live), documenting the boat is cheaper in the long run than registering it with the state.
You can easily do it yourself. You fill out one form (usually), attach the bill of sale (form also on the website below), attach a check for $84 and then you wait. Here''s the link that has all the info: http://www.uscg.mil/hq/g-m/vdoc/nvdc.htm
If you have more questions, call the documentation office at 1-800-799-8362. They are most helpful. I just changed the documentation on a boat I bought last fall and it went through without a hitch -- and the PO had let the documentation lapse.
To answer other questions you had -- the yearly cost to renew the documentation is ZERO, nada, zip. Once a year they mail you a form to sign and return, and then you receive the new documentation paper shortly thereafter.
Oh, and the process takes about 3-4 months, not 10 days to two weeks. Whoever told you that is dreaming. I sent my paperwork to them in early Dec. and just got the new documents last week, which was faster than I thought it would be.