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Old 07-05-2015, 02:39 PM   #29
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I see some people are using the words MH and investment in the same sentence. Key thing, don't forget a MH is NOT an investment, you will not make money when you sell, it just not done that way.(with very very few exceptions because someone will always say they sold theirs at a profit)

It's an expense - and a continual expense as long as you own it (maintenance, insurance, fuel etc).

The way I look at it (I paid cash for mine) when I sell anything I get is "found" money. And if I do keep it for 20 years, it will eventually be worth a few hundred dollars.

No payments, instead I can spend on camp grounds and fuel. The biggest return I get is the enjoyment when I use it

Using someone else`s money always comes at a price (someone is making money off of you) - if its too good to be true it isn`t!

Pay cash, enjoy life, go RVing! (just my opinion)
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Old 07-05-2015, 03:06 PM   #30
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Money is as cheap as you will find it right now. To take a large amount of working money and spend it on a depreciating asset does not make sense. The bottom line is you should do what ever you feel comfortable with. Good luck!
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Old 07-06-2015, 12:01 AM   #31
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Re: loans and depreciation- Something to think about, if you think you may trade in a few years from now, try to put enough money down to cover depreciation value for that amount of time. Because you don't want to end up with your loan being larger than the MH value down the road when you are ready for another purchase. (More likely would apply to fairly new MHs or new ones, or depending on how good of a deal you got).

In other words, it's not fun when you want to trade up and you find you MH is worth $10,000 less than your present loan on it.
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Old 07-06-2015, 10:23 AM   #32
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Money is cheap. Using your own money is crazy. Put enough down to cover depreciation and to come up with a payment your comfortable with. Good luck.
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Old 07-06-2015, 12:18 PM   #33
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Money is cheap. Using your own money is crazy. Put enough down to cover depreciation and to come up with a payment your comfortable with. Good luck.
This - you can pretty much make more money back in investments plus the tax write-off you get on the interest. Paying cash right now isn't the smartest thing to do. Take the cash, invest wisely and if you're not happy with making payments, etc - then pay the MH off. Also, we personally in this kind of situation where the money is cheap, we like to have it fairly liquid in case something does happen and we need it rather quickly (we dont have to wait to sell the coach, etc).

Finally, we found the Essex rate at 3.92 but then got a 3.75 rate through BofA. Not a huge difference but it will save you a little bit.
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Old 07-06-2015, 12:29 PM   #34
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This - you can pretty much make more money back in investments plus the tax write-off you get on the interest. Paying cash right now isn't the smartest thing to do. Take the cash, invest wisely and if you're not happy with making payments, etc - then pay the MH off. Also, we personally in this kind of situation where the money is cheap, we like to have it fairly liquid in case something does happen and we need it rather quickly (we dont have to wait to sell the coach, etc).

Finally, we found the Essex rate at 3.92 but then got a 3.75 rate through BofA. Not a huge difference but it will save you a little bit.
BofA 1-800 number claimed to have no loans over 72 months and up to like $50k. They were hardly competitive with RV loan options. If they are beating Essex...mind sharing loan duration and amount details...where you got the info?
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Old 07-06-2015, 12:37 PM   #35
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First Time Buyer - Should I Finance?

So many incorrect assumptions here, I don't know where to begin.


First, interest is not deductible on a dollar for dollar basis. Most of you are paying taxes, after deductions, of around 20%. So your interest 'write-off' is only 20 Cents on the dollar. You are still paying 80 cents on the dollar, or 80 percent of that interest! So, 0f $10,000 in interest paid, only $2,000 is a "write-off". $8,000 is lost money down the drain.

Secondly, the above makes all your other investment assumptions incorrect. (e.g. "I can make more on my investments than the interest rate paid").

Third, be very careful of the investment environment going forward. The end of zero interest rates is soon to begin. Greece will eventually collapse, Spain and Puerto Rico are close behind. The market is way overdue for a correction. Remember, Berkshire Hathaway went down 36% in 2008.

So ask yourself, "Do you feel lucky?".

You also have to pay high capital gains taxes on your investments (28%, +), don't forget that!

Lastly, your best bet is to negotiate a low price on a used RV from a PRIVATE SELLER and pay CASH. That will save you the most.


Cheers!
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Old 07-06-2015, 01:04 PM   #36
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Smart

Quote:
Originally Posted by cvbdsl View Post
I see some people are using the words MH and investment in the same sentence. Key thing, don't forget a MH is NOT an investment, you will not make money when you sell, it just not done that way.(with very very few exceptions because someone will always say they sold theirs at a profit)

It's an expense - and a continual expense as long as you own it (maintenance, insurance, fuel etc).

The way I look at it (I paid cash for mine) when I sell anything I get is "found" money. And if I do keep it for 20 years, it will eventually be worth a few hundred dollars.

No payments, instead I can spend on camp grounds and fuel. The biggest return I get is the enjoyment when I use it.

Using someone else`s money always comes at a price (someone is making money off of you) - if its too good to be true it isn`t!

Pay cash, enjoy life, go RVing! (just my opinion)
cvbdsl is a smart fellow!!! These MH's costs you when you buy them, costs you while you own them and costs you when you sell them!!

Doesn't sound investment grade to me!
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Old 07-06-2015, 01:14 PM   #37
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BofA 1-800 number claimed to have no loans over 72 months and up to like $50k. They were hardly competitive with RV loan options. If they are beating Essex...mind sharing loan duration and amount details...where you got the info?
We got a 20yr loan through BofA, 10% down at that 3.75% rate. We went through the dealer who said they could beat the Essex rate.

Quote:
Originally Posted by alpha99 View Post
So many incorrect assumptions here, I don't know where to begin.

First, interest is not deductible on a dollar for dollar basis. Most of you are paying taxes, after deductions, of around 20%. So your interest 'write-off' is only 20 Cents on the dollar. You are still paying 80 cents on the dollar, or 80 percent of that interest! So, 0f $10,000 in interest paid, only $2,000 is a "write-off". $8,000 is lost money down the drain.
Yes, very aware its not dollar for dollar, however it is still a deduction. What you failed to mention here is that the deduction also lowers your taxable income which determines your tax bracket - hence if we, for example, didn't take these deductions we'd be in a higher tax bracket and paying more in taxes. This is something each individual/couple needs to determine based on their income, etc but in our case financing was a much smarter play than purchasing.

If you're really worried about the market, you can pick up a high yield jumbo CD at 2.25% (min $100k) and along with the 20% or so you're getting back on your interest payment via your deduction you wouldn't "throwing" any money away.
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Old 07-06-2015, 04:17 PM   #38
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[QUOTE=alpha99;2636478]...
Secondly, the above makes all your other investment assumptions incorrect. (e.g. "I can make more on my investments than the interest rate paid").

Third, be very careful of the investment environment going forward. The end of zero interest rates is soon to begin. Greece will eventually collapse, Spain and Puerto Rico are close behind. The market is way overdue for a correction. Remember, Berkshire Hathaway went down 36% in 2008.
QUOTE]

If you're paying 3.75% for the money, but making 10 - 12% (or more) on your investments, you don't need any tax write-off for it to make sense. If all your money is in an IRA, as is ours, there's no capitol gains tax involved, only tax paid on anything (ordinary income) I take out, the rate depending on how much I take out. Any tax benefit is just icing on the cake. Whatever the loan interest rate is in the future will have no bearing on any loans taken out now at a lower rate, it can't be increased (with some exceptions that have no bearing on this conversation) during the life of the loan. Declining markets can be a hazard short term (which is why I have a financial advisor, to help me through this minefield) but those that hold back from the markets will definitely loose out on the long term. Bottom line, if you don't already have a financial advisor, this might be a good time to seek one out.

For what it's worth, I had the same, "80% is gone and lost forever" conversation with my best buddy about 20 years ago when he announced he was going to have to buy a bigger house, the one he had was about paid for and he was loosing his interest write off. He never did buy another house.
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Old 07-06-2015, 05:04 PM   #39
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A couple of items not mentioned yet-1. The purchase price of equivalent motorhome in future years will go up in price, so some depreciation might be mitigated. 2. I have read where G8 have come to an agreement, there will be no more Bank Bailouts-but only Bank Bail-ins- they use depositors and shareholders money to cover losses. Some one mentioned buying privately and I agree. In most instances you could expect to pay closer to wholesale than retail, and certainly an offer of a cash sale is a big hammer to soften the sellers price.
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Old 07-06-2015, 05:59 PM   #40
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So many incorrect assumptions here, I don't know where to begin.


First, interest is not deductible on a dollar for dollar basis. Most of you are paying taxes, after deductions, of around 20%. So your interest 'write-off' is only 20 Cents on the dollar. You are still paying 80 cents on the dollar, or 80 percent of that interest! So, 0f $10,000 in interest paid, only $2,000 is a "write-off". $8,000 is lost money down the drain.

Secondly, the above makes all your other investment assumptions incorrect. (e.g. "I can make more on my investments than the interest rate paid").

Third, be very careful of the investment environment going forward. The end of zero interest rates is soon to begin. Greece will eventually collapse, Spain and Puerto Rico are close behind. The market is way overdue for a correction. Remember, Berkshire Hathaway went down 36% in 2008.

So ask yourself, "Do you feel lucky?".

You also have to pay high capital gains taxes on your investments (28%, +), don't forget that!

Lastly, your best bet is to negotiate a low price on a used RV from a PRIVATE SELLER and pay CASH. That will save you the most.


Cheers!

It's not a "credit"...it's a deduction.

When interest rates go up, so do investment returns. Sure would love to have that cash instead of it sitting in the driveway depreciating when this happens.
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Old 07-06-2015, 06:44 PM   #41
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We financed.. but we got 1.99% three years ago... It made sense to re-mortgage the paid off house to purchase.. we did get the write-off for taxes.. the extra helped push us over the minimum deduction.. plus, we have all of our "cash" earning FAR more than the 1.99% we got..

As other have said - correctly or incorrectly - this is an intensely personal decision.. It's wise to elicit opinions from the wealth of information IRV2 is.. but at the end of the day, you'll need to do what's best for you..

My two cents... I'd say finance.. you can ALWAYS pay it off when you want (assuming you stipulate; no pre-payment penalty).. but I like to watch my money grow.. I like to see it.. taking out a HUGE amount to pay cash would suck.. but again, that's just me..

As a former "Business Mgr" many moons ago.. they will make money off you in the "box".. So, shop the rate.. let them work for you.. Heck, tell the guy you will only allow him to make .25% or .5% off you.. no more.. and demand to see his approval from the bank.. should reveal his "buy" rate (or ask him what his "buy" rate is)...

Bottom line.. we're all telling you what we've done, or what we'd do.. We are only interested in you enjoying the beautiful lifestyle so many of us enjoy.. don't sweat the small stuff.. talk to your financial guy and do what's best for you and your family..

I like what someone said.. it's needs to be done in the best interest of your overall financial strategy... Life is a marathon.. not a sprint !!
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Old 07-07-2015, 10:32 AM   #42
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Quote:
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It's not a "credit"...it's a deduction.

When interest rates go up, so do investment returns. Sure would love to have that cash instead of it sitting in the driveway depreciating when this happens.

When interest rates go up investment (stock) returns go down. As do bonds yields.

Your RV in the driveway is depreciating whether you financed it or not.

Cheers!
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