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.

[Vulcan_Rider]

RoyBell wrote:

As for the purchase of the new one. I feel I got a great deal.

I guess I quoted the wrong part.
Here is what confuses me.
Does this feeling of a "great deal" not include the interest rate too ??

And right this minute, you have open loans for a house and TWO cars and are going for another on an RV. Like it or not, that makes it appear that you are a little too free with taking out additional credit, thus the higher rate.

[RoyBell]

oakbowery wrote:

wing_zealot wrote:
Financing $12K for 12 years you are never even going to get close to 5%. I think if you start checking rates online, in order to get anything close to 5% you would need to finance about $25K or more. You did well by getting 5.99% if you ask me.
Now it's time for the popcorn as you get all the "how stupid you are" from the pay cash folks.

I'm one of the "pay cash" folks as I pay cash for everything I purchase (except house). I recently bought our 2009 Cherokee 31B (37' travel trailer) for less than 10k. The thing looks almost brand new. I've had to do a few minor repairs, but nothing major.

A few years ago I would have been in your shoes about financing until my wife lost her job. At the time we were dependent on both of our incomes to pay the monthly bills. I know God put me through that so that I would personally learn a lesson. I now have the cash only motto and if I can't pay cash for it (especially for what I consider a toy) then I don't need it. Yeah it'd be nice to have a brand new camper, but for half the price or less you could get one a few years old that is practically new.

To me, a camper that I use for recreation is not worth me losing sleep over if something happened and my wife or myself lost a job again.

Would I say that anyone who finances anything is "stupid"? Of course not, I just know that I sleep better at night knowing that if something were to happen the only thing I'm worried about financially at that point is my house.

Just my 2 cents.......

Luckily I am single with a decent paying job that is secure. There is enough in reserve to cover a years worth of mortgage if something where to happen. I could had asked the GF to chip in but I rather not. If we aren't married, I don't want a purchase that would be a hassle to split up if we ever broke up.

Unfortunately, I am getting a larger camper because of her kids which isn't fair for my pocket book lol. We looked at older ones and we really only like 2-4 year old ones the most. In the quad bunk setup, the older models were really beat up, smelled funny, or they wanted almost new pricing for. A 4 year old light weight trailer with sleeping for 8 is still around the $16-19K mark. The heavier trailers are obviously less, but I only have a half ton truck.

[rbpru]

Roy,

At this point it sounds like you playing a game but you are not sure of the rules. There are several different types of loans, and various ways to manipulate the payments.

I prefer a simple interest loan where you pay a fixed amount per month over a certain period of time. The loan is set up so that you can increase your payment and the increase goes directly to the principle and not the interest.

Go to your bank or CU and see what the rate and payments are.

The dealerships are set up to provide a money source for everybody; good credit, bad credit, no credit, smart or foolish. If you want to purchase a TT, they will find the financing for you. They have no idea what the impact will be on your budget; that is your business not theirs.

Buying a TT is not a race and a complete understanding of what you are doing can eliminate a lot of buyers remorse.

[RoyBell]

Vulcan Rider wrote:

RoyBell wrote:


I also told them my credit score was 775 on my last purchase 2 months ago, it was 70 points less when they pulled it...so, I went from Excellent rating to Good (in their defense).

So now I'm confused.
What was your objective in making the original post ?

If you are happy with what transpired, then why question it at all ??

About all I'm coming away with from this discussion is that you may be accumulating too many loans.....which is why your "rating" is going down. It will go down even more after this latest deal.

If you let them get away with jacking up the rate AFTER they quoted you a rate, that will not be a good thing. In some places that is illegal......especially if they did it in writing.

What's confusing? I am asking what typical rate for my situation should be. Too many loans? I have one for my house, one for my new car I just got. My truck has couple payments left before I am done. OTher than that, I have the new camping I will be getting. Thats a total of 3 including the house.

[Peg_Leg]

With that percentage down, if I couldn't get it for 3% or less I'd get up and walk.

[oakbowery]

wing_zealot wrote:
Financing $12K for 12 years you are never even going to get close to 5%. I think if you start checking rates online, in order to get anything close to 5% you would need to finance about $25K or more. You did well by getting 5.99% if you ask me.
Now it's time for the popcorn as you get all the "how stupid you are" from the pay cash folks.

I'm one of the "pay cash" folks as I pay cash for everything I purchase (except house). I recently bought our 2009 Cherokee 31B (37' travel trailer) for less than 10k. The thing looks almost brand new. I've had to do a few minor repairs, but nothing major.

A few years ago I would have been in your shoes about financing until my wife lost her job. At the time we were dependent on both of our incomes to pay the monthly bills. I know God put me through that so that I would personally learn a lesson. I now have the cash only motto and if I can't pay cash for it (especially for what I consider a toy) then I don't need it. Yeah it'd be nice to have a brand new camper, but for half the price or less you could get one a few years old that is practically new.

To me, a camper that I use for recreation is not worth me losing sleep over if something happened and my wife or myself lost a job again.

Would I say that anyone who finances anything is "stupid"? Of course not, I just know that I sleep better at night knowing that if something were to happen the only thing I'm worried about financially at that point is my house.

Just my 2 cents.......

[Vulcan_Rider]

RoyBell wrote:


I also told them my credit score was 775 on my last purchase 2 months ago, it was 70 points less when they pulled it...so, I went from Excellent rating to Good (in their defense).

So now I'm confused.
What was your objective in making the original post ?

If you are happy with what transpired, then why question it at all ??

About all I'm coming away with from this discussion is that you may be accumulating too many loans.....which is why your "rating" is going down. It will go down even more after this latest deal.

If you let them get away with jacking up the rate AFTER they quoted you a rate, that will not be a good thing. In some places that is illegal......especially if they did it in writing.

[RoyBell]

Checked 2 banks. Mine does not do Boat/RV loan. Another one was at 11%.

2 Credit unions local. 1 Does not do them, another would only match it at 5.9 for 60 months.

Bummer.

[gcloss]

I took a HELOC from my Credit Union @ .99% the first year and 2.97% after the first year with no closing costs. I plan on paying off my Eagle in 3-1/2 to 4 years.

[lenr]

Doubt the credit score would drop 69 points based on an auto loan--they are considered secure--more like 20 points especially if you make your payments on time. Interest rate may go down on a loan with a bigger loan or a shorter term. Longer term carries more risk for the bank so higher rate. Best approach is to get preapproved at a bank or CU one with experience with you if you have a good track record. Then go in and let the dealer rv or auto try to beat it. My rv dealer couldn't beat 4.99 that I got from the bank that did my previous rv loan. RVs are considered more risky than cars and will demand higher rates. Go see what a bank will offer and get them to tell you your score. Don't get worked up if it is way better. Just take any lower rate that you find and go buy the trailer. Most powerful technique with dealer is the word NO--forget using logic with a dealer.

[Hermes]

midnightsadie wrote:
never ever use the loan company at the rv dealer they get a real nice kick back.

I would not say never ever. It is true what you say that the dealers get a kickback on loans, however sometimes it may make sense to use the dealer financing. For example my current and last TT, we received better rates through the dealer than my local credit union. In both cases we came armed with a pre approval and when offered the better rates, jumped on it. Also for those who may not get a pre approval or search for rates ahead of the purchase, can take the dealer offered financing and then re-finance at a later date if a better rate is to be had.

[RoyBell]

APT wrote:
Your credit rating may have taken a hit because you purchased that car two months ago, esp if you have any loan on that.

My credit union is offering 4.74% interest rate for your amount/length. The lowest rates they have at 4.49% with at least $15k financed.

If you plan to pay to off in say 2-yr anyway, I would not worry too much about the interest rate.

I am sure it did + the addition of the new loan. However, the old loan should have been paid off should would bump the score to offset the inquiry I would think. My truck will be paid off in 2 more months which should give it a nice bump as well.

[goducks10]

Your score went down because your debt to income changed. You are allowed some hits on credit checking. It used to be that you took a hit every time they ran a credit check. Not so anymore. Most lending institutions realize that when car shopping dealers will run a credit check to see where you stand credit wise. Sometimes you may visit 2-3 dealerships before purchasing.

FWIW my CU is @4.49 new and 5.00 for used. But those score are with top tier credit in the mid to upper 700's. 706 isn't that great. Its good but you need to be in the mid700+ to get the best rate. 850 being the top.

Interesting article on credits hits while shopping for something.
http://classroom.synonym.com/much-credit-check-drop-score-6813.html

[RoyBell]

Vulcan Rider wrote:

RoyBell wrote:

They were touting 4.99% finance rates until I got the deal.

This is an easy one......for an outsider looking in.

IF they ever at any time during your personal communication with them quoted the 4.99 rate and then didn't honor it later......WALK.

The RV market is still WAY depressed. In Florida, it is WAY,WAY depressed with deep discounts even on new models. You don't have to deal with anyone who isn't 100% open and honest.

I also told them my credit score was 775 on my last purchase 2 months ago, it was 70 points less when they pulled it...so, I went from Excellent rating to Good (in their defense).

When I purchased my car they were talking about 2% rates. Finance time came and they were at 2.19. I told them no way. I was borrowing quite a bit (about 32K?) so it added up quickly, but with that credit score I should be lower. They claimed it was a special edition vehicle and blah blah blah. I said money to borrow is money to borrow, it shouldn't matter. I went on my phone while talking and showed him my local bank (Chase) was offering 1.99 on new cars. Then all of a sudden one of his banks offered my 1.89. I was ok with that. To get less I had to borrow less. I wasn't going to put down another $5,000 to save .1% on the loan. I will make more with it in the bank.

As for the purchase of the new one. I feel I got a great deal. They were pretty strong at 23K for the trailer but eventually got them to $20,400 outright (no trade) which was less than another dealer that had the lower tier model (shadow cruise vs radiance). I looked it up when I got home and used ones are listed at $20,000-23,000. Makes me feel a little better about the purchase 8-)

[APT]

Your credit rating may have taken a hit because you purchased that car two months ago, esp if you have any loan on that.

My credit union is offering 4.74% interest rate for your amount/length. The lowest rates they have at 4.49% with at least $15k financed.

If you plan to pay to off in say 2-yr anyway, I would not worry too much about the interest rate.