Coach financing

[Foodsman]

Hi Folks,

I've seen all kinds of things on RV financing from;
• A credit score of 725+ is all you need.
• A good credit score and 20% down.
• Come on down, we finance with no credit check at all.
• No finance charge when the Moon is in the 2nd house and Jupiter is alined with Mars. (hey could that be Aquarius?)

What is true? And base the conversation on someone with an excellent credit score.

What are some of the biggies... The age of the Class A diesel pusher, loan value of same etc.

Our kids had all kinds of questions and I found one area I was clueless is on the financing part.

Thanks for your help

[Foodsman]

That is good news. You look at some of the hight end coaches that are 15 years old and older becomes a good option. I recently saw a 1999 Newell and thought it was new!

[bsinmich]

There are Credit Unions and many banks that will look at you as well as the MH you are purchasing. I was a member of 3 different Credit Unions and all had widely different rules.

[Foodsman]

I've noticed that Essex and Good Sam's will not finance a motorhome over 10 years old. What happens if you want a coach thats 11 years or older?

[Aridon]

What does it matter? You bought a RV with equity money. The RV depreciates just as fast with the loan on the house as it does with the loan on the RV.

There is no difference. Unless you're looking at just paying interest only which would be insane.

Especially given that HELOCs can adjust in rate, if you are writing off your HELOC interest you already have tons of debt so the RV loan would be written off as well and on top of that if you got into a pinch you can dump the depreciated asset which secures the loan and keep your house which is the better deal. Especially considering many states protect your primary residence so best to keep that debt free.

The entire premise is crazy for what amounts to a tiny savings on interest.

In addition, there is no reason to pay a higher rate on a loan with a shorter term. If you intend to pay off the loan there are no pre payment penalties (practically no bank has these in the States, Canada is different) so make the lower payment or make a larger one if you want to pay it off faster. There isn't a benefit to paying 1% more for a shorter term when there is no penalty for paying it off early.

Banks love it when you pay them back early. They are lending at near historic lows with inflation starting to pick up. They love you paying them back early.


In addition, 725 is an OK score. Kind of middle of the road. You're at the bottom end of the good scores. Five years ago that would of been fine for the best deals now its kind of borderline. You need other tangibles like down payment and income from most banks.

http://www.creditscoring.com/creditscore/distribution.html

[kcmoedoe]

wbwood wrote:

Ron3rd wrote:

spoon059 wrote:
Home equity line of credit... They are currently around 3.5% right now. No RV financing is going to touch that interest...

True, the interest on e ELOC is a bit lower, I think we got 5.3% from Bank of the West but the downside to the line of credit is the RV is now tied to the house.

Yep...could end up losing both your homes...

Actually, no. I the scenario of using a home equity loan to pay for the RV, you would own the RV without any liens. However, since the home is almost assuredly a better performing asset than the RV, you would be encumbering something that goes up in value to own something that goes down in value. For most people, if you had to have either your home or your RV repossessed, the right answer would be the RV.

[wbwood]

mich800 wrote:
It still comes down to the three C's. A great credit score and no or limited means to repay will still be declined in many instances. But if you have a good credit score, down payment, acceptable debt coverage and source of repayment income you should not have any issue obtaining a loan.

Depends on the company....

Back in 2010, we were looking at TT's at a show. Saw one we liked. Was priced at I think $22k. We had $5k to put down. Did the paperwork and wrote a check. Didn't hear anything for a few days. Called the delaership to see what was up. They said that they were trying to get a hold of me (lie as they had 3 phone numbers for us) and that the finance company wanted me to call them. Red flag! They didn't even have their own finance person. So I called the finance company. They had us believing our credit was terrible. Only way they could finance us was for a much higher rate....in the teens! Told them no. Called the dealership and told them the deal was off and to send us our check back, which they did. We decided that a used pop up will have to be in our future and set out to look for one. Was at a CW looking at their used units and a salesman came up and started talking to us. One thing led to another and we told him our story. He said it was BS and that they could get just about anyone financed for under 8.9%. Especially when they have a down payment like we did. So, we took the 15 minutes and filled out some paperwork. They ran our credit and told us the finance company was truly full of it. We ended up buying a much nicer, bigger and more expensive TT that day from them. We traded in the TT last year for a Class C with them and got a great deal. But the year before that, we tried and they wouldn't budge. Tried to tell us we had to have a certain amount down, but last year we didn't. Just depends on the day, the banks and the underwear the dealership owner put on that day.

[wbwood]

Ron3rd wrote:

spoon059 wrote:
Home equity line of credit... They are currently around 3.5% right now. No RV financing is going to touch that interest...

True, the interest on e ELOC is a bit lower, I think we got 5.3% from Bank of the West but the downside to the line of credit is the RV is now tied to the house.

Yep...could end up losing both your homes...

[bsinmich]

I had 25% down when I got my Newmar. At that time Bank of the West beat my credit Union rates so I got them. When interest rates dropped & Costco advertised refi at lower rates I applied. It was Essex and they are also bank of the West. They wouldn't refi to a lower rate. I wrote the check and paid them off so they aren't getting any interest from me now. My Fico score on my Discover bill is 832 so I don't think that was refused due to bad credit.

[NoVa_RT]

When I bought, some of the banks I checked for financing didn't seem that interested in offering terms for someone with good credit who was making a large down payment and only financing for 6 years. Their RV loans seemed to be geared towards those who would be under water from the start and financing for 10-15 years. The dealer ended up having a pretty good rate thru Bank of the West, so it worked out. I emphasized to the dealer that they'd have to be competitive since I had other options, but don't really know if that helped get a better deal. It's best to do some leg work to make sure you get a loan rate commensurate with that good credit score, it doesn't seem to happen automatically.

[Dave_H_M]

your title of the thread reminded me of the purse the wife bought the other day. :R

[mlts22]

Playing with HELOCs can be playing with fire. I don't mean to be pessimistic, but when the economy tanks, one can lose both their RV and their stick and brick home if a HELOC is used for this purpose.

I'm sure the loan on a house has a lower interest rate. If one is secure knowing their income will be coming in, it is a better deal. However, if we get another 2008, it might cause someone to lose everything.

This is assuming the HELOC is on the S&B home, of course.

[Ron3rd]

spoon059 wrote:
Home equity line of credit... They are currently around 3.5% right now. No RV financing is going to touch that interest...

True, the interest on e ELOC is a bit lower, I think we got 5.3% from Bank of the West but the downside to the line of credit is the RV is now tied to the house.

[spoon059]

Home equity line of credit... They are currently around 3.5% right now. No RV financing is going to touch that interest...

[Ron3rd]

Essex and Bank of the West are two big financers of RVs.