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Old 11-25-2015, 03:54 PM   #15
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Quote:
Originally Posted by Nana25K View Post
Buying a RV is a luxury purchase. As an old Realtor I would never expect to get an RV loan for the same as a mortgage.
If it replaces a stick and brick residence and becomes the primary residence, is it truly a luxury purchase?

Back to the OP's issue... Where would you have tax documents mailed to? That should qualify for any "permanent" address on a loan application.

And why not pay cash? I bet I can run head to head with you in a "thrifty" race, but at this point in life and with your presented asset class, is it worth the hassle? Save pennies by searching for lowest price diesel instead. That will give you the cheap fix guys like you and I live for.
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Old 11-26-2015, 07:06 AM   #16
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In a nutshell, the two responses so far.

"Yes Mr. Monroe, we'd love to lend you the money you want, if your address came back to a house."

Or

"Yes Mr. Monroe, we'd love to lend you the money you want, at only 2 points above market price."

The market price I'm talking about is for RV loans, not mortgages. I've seen recent posts claiming rates as low as 3.09% and have friends that just got a 20 year loan for 3.45%. Alliant wants 5.75% because our living circumstances don't match convention.

As for paying cash, that's a loosing proposition. To net the cash for full payment I'd pay a BIG penalty in taxes. On the other hand, if all that money remains in our investment accounts our average returns would make the payments and then continue to provide income long after the motorhome was paid for. Long term paying cash just does not make sense for us. While we've done OK for ourselves, we have to use all the tools available to support the lifestyle and maintain the level of security we are comfortable with.
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Old 11-26-2015, 07:33 AM   #17
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You made a very important qualifying statement above....... If your investments are all in pretax accounts (IRA / 401), the tax implications of taking a large distribution can be significant based on your taxable income for that year. If you had enough cash in a "regular" account, you would just be playing the interest rate vs. growth rate assumption game.

As previously mentioned, many investment / brokerage houses offer portfolio loans that can have very attractive rates and may be a viable option to investigate. However, they are not mortgages, so it is our understanding they would not meet any sort of morgage integrate rate deductions on your taxes.

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Old 11-26-2015, 08:01 AM   #18
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If you are based out of South Dakota, Liberty National Bank in Sioux Falls will do the loan. Their catch is they only do 65% of total loan value. They came in low on the interest rate as well. When we "Moved" to SD, we transferred our daily checking to them. We have also opened a regular savings, and money market type account with them.
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Old 11-26-2015, 09:39 AM   #19
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I'd pay a BIG penalty in taxes.
Boy oh boy, can I relate to that problem! IRA funding was pushed so hard in our working careers that is has created a tax monster that is peering over our shoulder. The tax man is spoiling our fun!

Without knowing what tax bracket you are trying to stay in, you have to remember the tax will be paid at some point. If you are heavy in IRA money, required mandatory withdrawals (RMDs) could be a problem down the road so it may be advantageous to jump a bracket now. Hopefully you have a financial adviser that looks at all angles. There are many that don't.

This is a bit off topic but is important to those who are not yet retired. IRAs are an important piece of the savings pie. To much tax deferred money creates a tax issue in retirement. It is important to utilize the limits of tax brackets and pay up some tax in younger years. This can be done by using a ROTH IRA (or conversion) or contribute to the IRA with after tax money. If you own stock within an employer sponsored retirement plan it may be advantageous to do a NUA (net unrealized appreciation), pay up some tax and free it from the IRA constraints. One other elephant in the room is higher tax rates coming soon. If you have never heard any of this from your financial and/or tax adviser... FIND A NEW ONE!

One other thing. Often investors like to spread their savings between multiple advisers or self guided accounts. One advantage to having a higher asset level with one QUALITY firm is that you get perks. As an example, with securities based lending I can get a substantial loan at 0% for 90 days to 2 years and 2% thereafter.

Many options, unfortunately many never know what is available due to inept advisers or predatory firms.

Getting off the soap box now...
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Old 11-26-2015, 10:50 AM   #20
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Of course the theory was you'd be in a lower tax bracket come retirement, but of course that depends on how much you take out. Large lump sum distributions are where you get in trouble.

I could split, some withdrawal this year, more after the 1st, but I'm still not going to take out the full purchase price, or anywhere near it. It remains my position that given our portfolio and credit history we should qualify for the best rates, not some "you're lucky we'll even give you the time of day" rate.

Oh for the days of the local banker that knew you.
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Old 11-26-2015, 11:06 AM   #21
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"I'm from the government and I'm here to help you".
Yeah, though in this case it was likely an unintended consequence. The regs were tightened after the 2008 recession, when numerous mortgage defaults occurred. The wording of the reg refers to loans on primary residences, which might be interpreted to include a loan for a fulltime RVer, even though it is not technically a home mortgage. From what I understand, the fed banking bureaucrats declined to give an interpretation as to whether Congress intended the new requirements to apply to all loans or just home mortgages, and the big banks are unwilling to risk running afoul of the regulators.

My guess is that Bank of the West is willing to gamble with its Essex subsidiary, which is basically a paper shell selling loans, but not willing to gamble its main line mortgage and financing business.
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Old 11-27-2015, 03:02 PM   #22
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Update

Essex got back to us with an approval. In a nutshell, we're now down to a 1% penalty for not having a fixed address. I told the dealer (Midway) to go ahead and process the order.

In the meantime I'll keep shopping rates. It'll be five months, after all, before I need the $.
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Old 11-30-2015, 08:55 AM   #23
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Jay:
I assume your going to make sure this has a good radio/nav system unlike what we both currently have
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Old 11-30-2015, 10:52 AM   #24
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Ron, I'm not going to count on it. If it does, that's just the cherry on top.
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Old 12-14-2015, 06:59 PM   #25
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Ummm,

Didn't you lease an apartment/ condo at the beach for the year ? wink, wink !

It's not fraud if you really rent one ! and some dives can be rented cheap !
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Old 12-14-2015, 07:20 PM   #26
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Maybe calling it a RV is bad language to use. Call it your motorhome.


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Old 12-14-2015, 08:17 PM   #27
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One thing to consider is to talk with your investment bank and get a line of credit against your investment account. I did this once to buy a second house. Write a check to the rv dealer and pay back the line of credit as you want to.
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Old 12-15-2015, 07:57 AM   #28
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Its true that the IRA"S we so highly valued have now become a huge liability to the tax hungry government. Roth IRA"s came too late for some of us to take advantage of because our investments were too large to convert by paying the tax while we were still working. (Tax bracket too high). This tax indebtedness now prevents us from taking out the money except on a dribble basis. To be truthful we saw this coming years ago but found no answer to it.

We have found though that we can secure a low interest loan for a new MH by basing our collateral on the IRA's as well as the new MH. We still had to have a legal address to base the loan and register and title the MH. This can be done in a large number of ways; Rent an apartment; Rent a PO box; Hire a mail service; Have an agent set up a legal address for you and collect and forward all your mail. All these can work and satisfy the bank,
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