About to purchase- Finance questions

[RoyBell]

Hey all, I have a downpayment on a new travel trailer and just sold my pop up last night. Thursday I will go to sign papers.

They were touting 4.99% finance rates until I got the deal. Then it jumped to 5.99%. I just purchased a car 2 months ago and my credit was 775 at that time. They pulled it Monday at the camper place and now it's 706. Big drop. I told him no way @ 6.99. He got it down to 5.99% which still seems high.

What should I expect? MSRP is $32K. Purchase price $20K I will be putting $10,000 cash down and financing $12,000 for roughly 10-12 years...whatever gives me the best rate, then I will pay down early.

I think with that kind of down payment I should be in the 3-4% range. Not sure what the deal is with my credit and the huge swing but hoping I can show the bank the rating from 2 months ago to help swing into a better rate.

Any thoughts? Either way the trailer will always be positive in equity.

Edit: I found a local credit union @ 4.24%. My score is lower than anticipated because my old car AND new car loan both show up. Old car should be off by now! The break over from Good to Excellent is 720 points. 720 is good for another .25% from the CU. Today the CU pulled it and it showed 710 (I did close some cards yesterday, maybe it helped?). So close.

[rbpru]

Wing Zealot,

You are welcome!

Enjoy the ride.

[RoyBell]

smkettner wrote:

RoyBell wrote:
I'd be curious what the "cash only" folks pay in property and other taxes. Being in IL we have some of the highest property taxes (2-3% value of home on average, average home 200-300K), state income tax (2.5%), and sales tax (8.5%), higher in the city. Plus the tax for toll roads ( $1-2 per toll now I think), high gas prices (currently $3.15 for regular)... The list goes on and on. They suck us dry here.

At the end of the day, the government gets more of my money than most other states. I suppose if I got to keep that money I could buy more in cash too 😉

Property tax including Mello-roos school bonds and street improvement bonds 1.5%. $300k is a good down payment.
Income tax up to 9%
Sales tax 8%+
Gas $4 but not too many toll roads
Electricity 15 to 46 cents per kWh
CA has you beat by a long shot.

That's the average for the whole state? That's close to what the "city of Chicago" charges for everything. Sales tax 9.25%, gas is over $4.00 gal for regular. We do get cheap electricity here which is a bonus. Housing within city limits is sky high, plus you get higher insurance rates too. I live just outside the city which helps on everything.

When I Looked into moving to CA the houses were about the same as they were here and the property tax never went up (correct me if I am wrong). Here they go up yearly, and rarely ever go down. We also have a lot more schools compared to CA which is where most of the money goes to.

That really blows on the income tax. I was wrong on ours, we are 3.75%, down from 5%. My union dues are 2.5%. The areas I was looking in at CA did pay slightly better than here (10-15%). I would say CA and NY are closest for ripping off the residents though lol

[wing_zealot]

rbpru wrote:
Hopefully no one will have to discover the advantages of "pay as you go".

Mainly because it often involves a series on unpleasant circumstances, that no one thinks will happen to them.

It is true that somethings must be financed, but I never considered toys to be one of them. I prefer to set a savings goal and wait.

I am sure I am in the minority.

Thank-you for saving your money so it's available for me to borrow cheaply - you rock!.

[time2roll]

RoyBell wrote:
I'd be curious what the "cash only" folks pay in property and other taxes. Being in IL we have some of the highest property taxes (2-3% value of home on average, average home 200-300K), state income tax (2.5%), and sales tax (8.5%), higher in the city. Plus the tax for toll roads ( $1-2 per toll now I think), high gas prices (currently $3.15 for regular)... The list goes on and on. They suck us dry here.

At the end of the day, the government gets more of my money than most other states. I suppose if I got to keep that money I could buy more in cash too 😉

Property tax including Mello-roos school bonds and street improvement bonds 1.5%. $300k is a good down payment.
Income tax up to 9%
Sales tax 8%+
Gas $4 but not too many toll roads
Electricity 15 to 46 cents per kWh
CA has you beat by a long shot.

[MM49]

You are doing business with a criminal organization when buying a trailer from a dealer. Don't do any of your financing through them. Remember birds of a feather flock together.
MM49

[RoyBell]

I'd be curious what the "cash only" folks pay in property and other taxes. Being in IL we have some of the highest property taxes (2-3% value of home on average, average home 200-300K), state income tax (2.5%), and sales tax (8.5%), higher in the city. Plus the tax for toll roads ( $1-2 per toll now I think), high gas prices (currently $3.15 for regular)... The list goes on and on. They suck us dry here.

At the end of the day, the government gets more of my money than most other states. I suppose if I got to keep that money I could buy more in cash too 😉

[rbpru]

Hopefully no one will have to discover the advantages of "pay as you go".

Mainly because it often involves a series on unpleasant circumstances, that no one thinks will happen to them.

It is true that somethings must be financed, but I never considered toys to be one of them. I prefer to set a savings goal and wait.

I am sure I am in the minority.

[RoyBell]

tragusa3 wrote:
I haven't had a credit card in almost 20 years (unless my debit card counts)...credit score was 820 when they pulled it for our trailer this year. I'm not sure of the complete formula, but closing or not using credit hasn't affected mine.

According to everyone in this post, that's impossible lol. Like I said, show me one person with a poor credit score that it went down because they closed off some credit cards. Old wives tale. Not only do they look at debt to open credit, they also look at open credit as potential credit which can be just as bad.

At any rate, today I got my check from the credit union. Decided to go with 60 months @ the 4.24% rate. Had I been with them 5 years they would had knocked another .25. Another .25 of I was at 7.20 score. The said I could refinance no cost if I wanted that extra .25 in a couple months.

Had I met those 2 options, it would had been 3.74%

The initial point of this post was to see if 5.99% was high for an rv loan. It was. Thanks for those who had helpful input. I now have an extra $800 in my pocket.

[tragusa3]

I haven't had a credit card in almost 20 years (unless my debit card counts)...credit score was 820 when they pulled it for our trailer this year. I'm not sure of the complete formula, but closing or not using credit hasn't affected mine.

[mich800]

RoyBell wrote:
I have been told having too much available credit is just as bad as no open credit. Face of the matter is no one knows for sure what makes it go up or down. In my experience, just the act of closing cards has not adversely affected my credit...however, I usually have a new line of credit not too far behind it.

The question was if closing cards effects credit. The answer is no, but possible indirectly. If you have enough open credit you should be fine. I'm am proof. Show me someone who has closed all their credits and their credit dropped to 500. Sounds like an old wives tale to me.

Sometimes we take advice from those that are as clueless as the one with the question. Who said closing all open credit for a person with good credit would kill your score to 500. It just is not going to happen.

The fact is your credit score moves around based on open credit, inquires and many other factors. Long term as long as you have not done something crazy it will trend in a range. You stated you just obtained an automobile loan. That impacts your credit rating. I wouldn't over think it. I have also found certain things impact the three reporting agencies very differently. Did they all move the same magnitude?

[beemerphile1]

RoyBell wrote:
I have been told having too much available credit is just as bad as no open credit. Face of the matter is no one knows for sure what makes it go up or down. In my experience, just the act of closing cards has not adversely affected my credit...however, I usually have a new line of credit not too far behind it.

The question was if closing cards effects credit. The answer is no, but possible indirectly. If you have enough open credit you should be fine. I'm am proof. Show me someone who has closed all their credits and their credit dropped to 500. Sounds like an old wives tale to me.

Again, you "know" things that are incorrect.

Open a free account at Credit Karma and learn what does affect your credit and how it affects your credit. As Fox Muldor would say, "The truth is out there".

I'm not trying to demean you because you are obviously a bright guy. You are just misinformed and it can be costly to be confident and wrong at the same time.

[RoyBell]

I have been told having too much available credit is just as bad as no open credit. Face of the matter is no one knows for sure what makes it go up or down. In my experience, just the act of closing cards has not adversely affected my credit...however, I usually have a new line of credit not too far behind it.

The question was if closing cards effects credit. The answer is no, but possible indirectly. If you have enough open credit you should be fine. I'm am proof. Show me someone who has closed all their credits and their credit dropped to 500. Sounds like an old wives tale to me.

[beemerphile1]

Vulcan Rider wrote:

RoyBell wrote:

It's BS.

Well you claim to know pretty much everything already so I continue to wonder why you asked for advice in the first place.
Except you don't know what you don't know.

It's not BS.
A huge part of your credit score is:
How much total "revolving" credit you have and what percentage of that remains unused. Closing a card or cards reduces your available credit and hurts your score....eventually. All of this stuff takes time to sift down through all of the filters.

Correct, the OP "knows" a number of things that are just plain incorrect.

[beemerphile1]

coolbreeze01 wrote:

RoyBell wrote:


(I did close some cards yesterday, maybe it helped?). So close.

I don't know anything about credit, but I've heard closing credit cards can have a negative effect on scores.

Anybody know?

Absolutely YES!

Approximately 30% of your credit score is based on your debt-to-credit ratio.

Example;
*You have $50,000 in available credit and owe $10,000. That gives you a debt ratio of 20%
*Now you close a $20,000 credit account, and still owe $10,000. Your debt ratio jumps to 33%.
*BAM! Your credit score just took a huge hit!