Motorhome financing
As newbies to the RV lifestyle dream we are researching and preparing to buy our first RV. We know we want a large Class A built with high quality which with our budget means older high quality versus...
Forum Discussion
mtofell1 wrote:
Some people need a basic finance class. Why not borrow 5% (tax deductible) and keep your money in an investment earning 7%? Depreciation of the coach is totally irrelevant to this discussion.
Check with your accountant about 2nd home tax deduction. I thought I heard some things might be changing with that under the recent tax reform.
For the money being talked about, a $200 prepayment penalty is not even worth thinking about.
5% interest rate on the purchase isn't too bad these days. I've heard/read around here that credit unions will generally be the best. Home equity lines might also be good. Older coaches often times won't qualify for the best rate.
Love this answer. I was taught never to risk your own money. Borrowing with the interest deduction despite still paying some interest will still allow your money to earn more via investments and thus a net in your wallet. Paying cash means you are pulling your own money, putting it at risk and losing the money you would have gained in those investments. it's a lose lose. And I'm risk inhibitive, meaning if the bottom fell out and a worst case scenario happened ( a million things), the bank loses the money on the RV - not you - and you still have your cash but may suffer some temporary credit worthiness loss. Plan for the best but be prepared for the worst.
That said I would still shop around for rates. We went with our local bank that we've been doing business with for 40 years. they don't even really do RV loans but they made it work.
