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10-14-2016, 08:49 PM
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#1
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2 Rivet Member
Lexington
, South Carolina
Join Date: Sep 2016
Posts: 21
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Financing a leftover unit
I was interested in purchasing a leftover '16 at Colonial and wanted to put down 10% and finance the rest for 8 years, was told that they only do 15 year loans. There is no way I would finance a trailer for that long (even if they have no prepayment penalty), anyone get a shorter term than that from them? This is the only thing keeping me from buying a trailer for them. Wanted to go older, but then I need more money down because the banks won't lend to much on a 2012 unit compared to the selling price. I probably should loan shop but I like one stop shopping.
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10-14-2016, 08:53 PM
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#2
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Rivet Master
2006 23' Safari SE
Biloxi
, Mississippi
Join Date: Nov 2011
Posts: 8,278
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Check with your bank or credit union.
__________________
MICHAEL
Do you know what a learning experience is? A learning experience is one of those things that says "You know that thing that you just did? Don't do that."
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10-14-2016, 09:24 PM
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#3
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Some Guy
1968 26' Overlander
2021 25' Globetrotter
Nashville
, Tennessee
Join Date: May 2015
Posts: 409
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Finance it for 15 (better interest rate) and write off the interest as 2nd mortgage. (trailer qualifies).
Pay it off in 7. These are simple interest loans with no pre-payment penalties.
D
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The Jarretts
Nashville, Tennessee
1968 26' Overlander
2019 RAM PowerWagon TV-Petrol Hemi
WBCCI # 22342
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10-14-2016, 09:24 PM
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#4
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Rivet Master
2006 25' Safari
St. Augustine
, Florida
Join Date: Oct 2011
Posts: 2,670
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SCBarber, check on those borrowing facts yourself. I borrowed initially on mine and it was a six year-old model. They set it up for 12 years but I paid it off in a year- just had to shuffle money. A 2012 is only four years old. It may be that their lender may not go that old or they do not want to sell it as much as they do a new one. You may have to put down more though.
__________________
WBCCI 8653/AIR 60240
2022 Ford F150 PowerBoost Platinum w/7.2KW
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10-15-2016, 12:10 PM
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#5
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3 Rivet Member
2016 30' Classic
Santa Rosa
, California
Join Date: Apr 2015
Posts: 145
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I agree with djarret. Take the 15 year financing, make one principle plus interest payment per month, and an additional monthly principal-only payment of the same amount (or less, when convenient). You will have it paid off within 7 years.
__________________
Happy Trails,
Phil
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10-15-2016, 12:59 PM
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#6
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2 Rivet Member
2007 28' Classic
Ivanhoe
, Virginia
Join Date: Aug 2015
Posts: 38
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Term is determined by amount financed, used to be anything over 25k would finance for 15 Yrs. Take the term Erie off interest as second home, pay off after 7-8 years when payment becomes mostly principal.
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10-15-2016, 01:19 PM
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#7
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Rivet Master
2014 20' Flying Cloud
Washington
, Missouri
Join Date: Mar 2014
Posts: 2,591
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Quote:
Originally Posted by phann
I agree with djarret. Take the 15 year financing, make one principle plus interest payment per month, and an additional monthly principal-only payment of the same amount (or less, when convenient). You will have it paid off within 7 years.
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I agree with djarret & phann. You can also simply make the payment that amortizes (google amortization calculator) it for 8 years or any term you wish, assuming it is simple interest and you need to confirm. Historically dealers/banks have used paper that front loads interest so an early payoff balance is a surprise. Google rule of 78's.
Also the dealer probably sells the paper to the bank and term may be part of the value of that paper. Also as awchief said....check around, especially credit unions.
Bob
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10-15-2016, 01:35 PM
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#8
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Living Riveted since 2013
2016 Interstate Lounge Ext
Green Cove Springs
, Florida
Join Date: Dec 2013
Posts: 8,210
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Yep, TurboTax agrees that if you itemize and other deductions don't reduce / eliminate the value of your interest deduction by pushing you near or over the maximum deduction amount, mortgage interest deduction on an RV as second home is fine as long at it has sleeping, cooking and toilet facilities.
https://ttlc.intuit.com/questions/18...ct-my-mortgage
https://ttlc.intuit.com/questions/19...tax-deductible
https://ttlc.intuit.com/questions/29...d-property-tax (check the paragraph under "It's not equal")
Still seems a good idea to pay off the loan faster, even though that would reduce the interest you pay along with the associated potential deduction.
BTW, I'm no tax accountant - if your return is complex, get professional help. In any case, check & verify what I said above before you start spending money.
__________________
Rocinante Piccolo is our new-to-us 2016 Interstate Lounge 3500 EXT
(Named for John Steinbeck's camper from "Travels With Charley")
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10-15-2016, 03:40 PM
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#9
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Rivet Master
2005 19' Safari
GLENDALE
, AZ
Join Date: Aug 2004
Posts: 2,453
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Re: Rule of 78s
See links for explanation of "rule of 78s" pre-computed loan interest:
The "rule of 78s" is illegal in 16 states, but the others still allow loan issuers to take advantage of borrowers using this interest calculation method.
If loan interest is computed in this way, there is no savings in paying off a loan early.
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10-15-2016, 04:34 PM
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#10
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Rivet Master
2022 25' Flying Cloud
2015 30' FB FC Bunk
2012 25' FB Flying Cloud
Golden
, Colorado
Join Date: Jan 2012
Posts: 915
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Do the math and send in the payment to payoff on your desired schedule/time frame. There should not be a prepayment penalty, at least not any I have financed and paid off early.
Sent from my iPhone using Airstream Forums
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2022 25RBT FC, 50A Dual AC, Awning Package, 270W Solar, Convection Microwave. Ceramic Coat, Grand Lounge, 3" Lift, 16" Michelin RIBs, Multiplus II, Battleborn 400A, MPPT 100/50, Orion-TR 30, EasyStart (2), Easy Touch, AirKrafters jenRack, Onan 2500i, Truma Aquago Confort, Starlink, Pepwave, Parsec
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10-15-2016, 04:42 PM
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#11
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Rivet Master
2008 19' Bambi
2012 23' Flying Cloud
2016 25' Flying Cloud
Bandera
, Texas
Join Date: Jun 2012
Posts: 786
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Buy it and pay it off early.
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