Financing

[Wandrews530]

As of now, we've settled on the Seneca 37hj. Since this is going to be a major purchase, would like to hear some ideas on financing. My In-Laws have their's, Fleetwood Discover 38N, through Bank of the Ozraks and appears to be a 2nd mortgage or mortgage of some sort. Thanks in advance for the info.

[curver900]

IMO never mortgage your house for a depreciating asset like an RV... you don't want to be homeless because of it...

[Lake Huron]

X2!
I did my 5th wheel under an rv loan thru my local credit union. They had good rates and are local so if I have any issues I can go in and slap someone around. Lol! Which I have to do regularly because nobody understands how to make a PRINCIPAL payment. They always want to make an EXTRA payment which pays interest. PRINCIPAL payments are just that, principal, no interest. One thing is at the end of the year you can still claim it as a second home on your taxes,

[RetiredOne]

Originally Posted by Wandrews530

through Bank of the Ozraks and appears to be a 2nd mortgage or mortgage of some sort. Thanks in advance for the info.

Bank of the Ozarks, called Bank OZK now, makes many RV loans. But, to clarify, they are usually written as separate RV loans, NOT second mortgages attached to your primary house.

One item that can be confusing with RV loans is that they can be considered a second home, so interest on the loan can be deducted on taxes, just like a primary home mortgage. Just don't confuse the language with the salesman as a second loan or second mortgage, or home equity loan, on your house. You should NEVER do that.

[RetiredOne]

Another item to consider if you're thinking of taking the interest deduction on a RV loan, is does your individual tax situation warrant it? With the standard deduction on taxes now up to $24.8K, many people don't itemize their deductions, so this second interest deduction might not be of any benefit, from a deduction standpoint.

[jeffro01]

Originally Posted by RetiredOne

Another item to consider if you're thinking of taking the interest deduction on a RV loan, is does your individual tax situation warrant it? With the standard deduction on taxes now up to $24.8K, many people don't itemize their deductions, so this second interest deduction might not be of any benefit, from a deduction standpoint.

True but in a high cost state like the one I live in, that was a nice little additional deduction...

Jeff

[Wandrews530]

I think I misspoke. They showed me their end of year interest statement and it said mortgage.

[RetiredOne]

Originally Posted by jeffro01

True but in a high cost state like the one I live in, that was a nice little additional deduction...

I hear you about the high cost state, I'm in one also... but we also get spanked because of the SALT deduction.

[RetiredOne]

Originally Posted by Wandrews530

I think I misspoke. They showed me their end of year interest statement and it said mortgage.

I'm still confused, I think you need more information from them. Did they take out a second mortgage on their house to pay for it, and are using the equity/collateral from the house to guarantee the loan, instead of getting a separate RV loan?

[pconroy]

We used Good Sam. A bit of a hassle because the motorhome was used. We ended up paying cash for it (pulling from Second Mortgage Account) and then when loan approved, we paid back the second mortgage account.

[EA37TS]

Originally Posted by Wandrews530

As of now, we've settled on the Seneca 37hj. Since this is going to be a major purchase, would like to hear some ideas on financing. My In-Laws have their's, Fleetwood Discover 38N, through Bank of the Ozraks and appears to be a 2nd mortgage or mortgage of some sort. Thanks in advance for the info.

Should be a secured loan on the RV and depending on the bank they may treat it as a mortgage type loan with annual 1099 int sent. My last one was a secured vehicle loan and I had to call every year for interest info for tax filing.

[jeffro01]

Originally Posted by RetiredOne

I hear you about the high cost state, I'm in one also... but we also get spanked because of the SALT deduction.

Indeed... Same here...

Jeff

[Onyrlef]

Southeast Financial for us with an excellent loan officer. Takes them over a week to do the approval, then closing took place in about another week. We bought from an individual and did the closing by zoom. We were unfamiliar with walking ourselves through the financing process and were a bit tentative, but they were very clear about what paperwork was required from both seller and buyer and it went quite smoothly.

[drmike961]

Save and pay cash for all depreciating assets unless you somehow have no risk factored into your future income. Yeah I'm that guy that pees in the punch bowl.

[CAG]

I am in the save and pay cash boat too especially since interest rates are up and going higher.

Using a home equity loan is not really a good idea in most cases and especially with vehicles. The general financial situation is going to get much worse before it gets better.

[Onyrlef]

Originally Posted by EA37TS

Should be a secured loan on the RV and depending on the bank they may treat it as a mortgage type loan with annual 1099 int sent. My last one was a secured vehicle loan and I had to call every year for interest info for tax filing.

All vehicle loans are secured. They're secured by the valuation of the vehicle and your credit worthiness. If your credit worthiness is suspect you'll pay a higher interest rate, likely pay a higher down payment, may need a guarantor, collateral. and likely a shorter term ( they'll want to limit their exposure). A second mortage doesn't care whether you took it out to invest in corndog futures, buy an RV or play high stakes poker at the Taj, it's tied to the equity in your home. Default on it and you lose your home, not the RV. If you secured your RV loan with the equity in your home and you default, as well as not being the sharpest pencil in the drawer, you'll be out both your home and RV.