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Old 01-29-2013, 10:59 AM   #1
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Loan terms

I am expecting arrival of my new MH in a month and wanted to lock in a rate and loan terms but my sales associate isn't the most forthcoming with details. So a few questions...

1)Should I be thinking about the loan more like a mortgage with all the fees and such or more like a long car loan?

2)any perk to going through the dealer or going for a loan on my own?

3)Is 4.49% on a 20yr with >20% down a decent rate?

4) Can't I lock a rate in now?

Thanks for the help
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Old 01-29-2013, 01:08 PM   #2
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Think of it as a really long-term car loan, not like a mortgage. I suspect you can't exactly "lock" these down. 4.49% sounds decent to me, but I'd hesitate going 20 years on any vehicle. You'll be instantly upside down. I realize sometimes that's what you have to do, but OMG.
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Old 01-29-2013, 01:09 PM   #3
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Quote:
Originally Posted by GuidoDoc View Post
I am expecting arrival of my new MH in a month and wanted to lock in a rate and loan terms but my sales associate isn't the most forthcoming with details.
So go in, sit down with him, and don't leave until you get the answers you're seeking. After all, he's getting a commission on the sale...make him earn it.

Quote:
1)Should I be thinking about the loan more like a mortgage with all the fees and such or more like a long car loan?
There really shouldn't be much in the way of fees for the loan.

Quote:
2)any perk to going through the dealer or going for a loan on my own?
Go with who ever will give you the best deal. If that's the dealer, then use their financing (just be aware that they do get a kick back, but if their deal is better than you can get on your own, who cares?).

Quote:
3)Is 4.49% on a 20yr with >20% down a decent rate?
Yes, that's a good rate. But do you really want a 20-year loan on a depreciating asset that you more than likely won't keep for 20 years?

Quote:
4) Can't I lock a rate in now?
Yes, you should be able to (read my first comment).
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Old 01-29-2013, 01:48 PM   #4
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The F and I managers at dealerships will probably not agree, but see your bank or credit union. Do your homework, bring with you the VIN of the MH, plus any photos description etc. Also your proof of income, credit report, even though they will pull one when you apply. You can then be prepared for any errors in your report and any suprises. I think you can lock in a fixed rate less then you said in your post. I would not go any longer then 10 years, unless there is a good reason such as the payment amount. So, arrive for your loan approval prepared and you can save $1000's on the life of your loan.

Good luck and most of all enjoy your new purchase!!
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Old 01-29-2013, 02:45 PM   #5
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I look at the term of an RV loan a little differently. Since they are simple interest loans - there are no prepayment penalties or least there shouldn't be. Put as much down as you can afford and finance as little as possible. The longer term and lower principle gets you a low payment. When you make a payment - you can make a regular single payment - or as many as you like at a time and have no payment due for that time period. Durning that time each month pay as much as possible directly to principle. That's allowed too. Interest is calculated on the amount of principle remaining and by throwing every available penny at principle you can you reduce the interest paid and the term at the same time. If you factor an approach like this into your downpayment amount (holding x regular payments back and make multiple payment right off the bat) and stick to your knitting you can pay it off in a much shorter period of time than the stated term and - you will not be facing a larger monthly payment associated with the shorter term. This isn't for everybody but it works for me. We put just over 60% down and I enjoy looking at my account online and watching my principal come down and beating them out of as much interest as I can. Of course if you can buy it outright, so much the better. But that's not for everybody either. As to the rate - yep that's a good rate. Don't wait on the dealer - make some calls.

Good luck however you choose to go. Just don't bite off more than you can chew. And regardless - throw extra money at principle every chance you get. You may well own the thing before you have it broken in.
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Old 01-29-2013, 04:35 PM   #6
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Get pre-approved thru your bank or credit union, my opinion credit union is better but everyone has an opinion for which is better. I would do that for any large purchase you were thinking of ie house, car, motorcycle, RV. You will know for sure what you can afford and you will normally get better rates.
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Old 01-29-2013, 04:46 PM   #7
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If this is a new motorhome I believe you should be able to do better on the rate. 3.75 - 4.25
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Old 01-29-2013, 04:48 PM   #8
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I look at the loan for our MH which will get me the lowest payment; not really concerned about the length of loan. I would rather have the money for investment reasons; if loan is for 4% which our is I can certainly get more return from investments. So I choose to keep cash.
just my opinion!
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Old 01-29-2013, 05:12 PM   #9
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Play around with this RV Finance Calculator. I ended up approaching it more like a car loan with a down payment closer to what you do with a conventional mortgage. It tends to be best given the depriciation rate of RV's and amount of money most of us are spending.
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Old 01-29-2013, 06:35 PM   #10
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If you do not already have financing arranged elsewhere before sitting with the finance agent at the dealer, you have put yourself at a serious disadvantage. Financing should be negotiated in earnest to get the best deal for you. Negotiate, play one lender against the other, then take the best deal attainable. Good luck.
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Old 01-30-2013, 12:30 PM   #11
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Wow. Thank you all for such quick replies. I am putting about 40% down and it is a new vehicle. I will pay it off in a few years just don't want to right now and a 20 year keeps my payment low. Thanks for the advice. I will seek out some alternates to have a comparison.
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Old 01-30-2013, 07:24 PM   #12
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Depending on your credit rating, high 750 plus you can do much better! Most likely 3%to4%. Under 750 not so. Good luck I would do as suggested check with banks and credit unions!
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Old 01-30-2013, 08:31 PM   #13
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Seems there are some knowledgeable people on this thread, so here is a question: How hard is it to get a 20 year loan on a new Class A? Are 20's only given for very high cost ($250,000+) units? Or is it just a factor of credit worthiness? And do they come at a very high interest rate? I'm trying to justify (to DW) a Thor Palazzo which would be about $150,000 new. With a $25,000 down payment from a trade in of our ACE, 20 years would give me a payment of $825 a month at 5%. Is this reasonable or just a pipe dream? We are both retired but have good pensions and I have SS. Our FICA scores are in the low 800's.
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Old 01-30-2013, 09:14 PM   #14
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As noted, shop the rates with your bank and credit union. It is really just a longer term car loan and nothing like a home mortgage.

I have had dealers actually manage to get the rate to under my bank rate when they have to if they want the loan fee.


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