Be Perpared to Pay if you want to Play

soren wrote:

Effy wrote:
Math is math and of course your payments will be high on a 5 year note. That's a lot to cram into a short span. That's why they offer 15-20 year notes on RV's.That's why they offer 15-20 year notes on RV's. Sure you pay a lot more in the long run but the monthly sting is less and makes actually living on a budget manageable.

While shopping for our last two motorhomes (used) we continually ran into people who were suffering greatly because they took out a long term loan on a liability that depreciates far quicker than the loan balance. It's common to find really nice 6-10 year old rigs that are overpriced, and firm on the price, since they have a 15-20 year loan, and they owe tens of thousands more than the thing is worth. Saddest of all is the widows we met who can't handle the motorhome at all. They have never driven the thing, and would have no idea how to set it up on a site. They are now alone and saddled with a stupid mistake their husband made. Trapped in a mortgage that far exceeds the value of their motorhome, and have no idea how to get out of the mess.

Sure taking an irresponsible long term loan on a steeply depreciating liability WILL make the payments more "affordable" short term, but for many, situations change, and half way through a long term mortgage, they discover that they really managed to screw themselves pretty well.

I wasn't opining on whether it was a good or bad idea. It's an option. OP complaining he can't afford certain things on a 5 year note. Amortizing helps to afford it. And interest aside - which is deductible, what's the difference if you pay it all up front or amortized? The amount paid (less interest- which again can be claimed) vs depreciation is the same. So your loss is the same whether you pay it all faster or slower. If you buy a 40k FW and 10 years form now it's worth 20k, what difference does it make if you spent that money in 5 years vs 10? Add that if you have cash, isn't it better to use the banks money and invest yours elsewhere for a better return rather than throwing all your money on a depreciating asset?

Irritating when people are overly critical of other's financial decisions because they look at things with blinders on. I took a 15 year note on our MH. The cash I would have spent on it I invested elsewhere in commercial real estate. Not only did I get a healthy ROI in monthly income, I made an 80% profit on top of that when I sold it 5 years later. All the while used the bank's money to purchase the RV and wrote off the interest. Are you saying I would have been wiser to throw all my cash at the RV, avoiding investing elsewhere for a profit only to arrive at the same depreciation with the same loss on the RV?