5% Down payment options?

[MapleKing]

I'm familiar with different financing options for different vehicles and know that down payments can vary depending on circumstances. Having said that, I'm wondering what the typical down payment options are for class A RV's. I've read that 10% is what most lenders look for but are there lenders that will consider 5% down payments? I'm currently looking at buying a new travel trailer in the mid 20-30K range and have a 10-20% down payment but my wife is also looking at some 2-3 year old smaller class A's in the 45-55K range. I have a plenty of income for a low DTI and a credit score in the mid 700s so is that even an option or should I tell her to just focus on the travel trailers?



Most lenders I've looked at have quoted the 10% on their Websites but haven't spoken to anyone and thought I would ask to see if anyone knows different options.


Thanks!

[momdoc]

Try a credit union as they seem to have laxer rules.

Do note that you will be underwater with your loan for almost the life of the loan.

[Crasher]

To each his own, but I wouldn't buy a used motorhome with anything less than 20-25% down, especially a DP. The operating costs of a MH far exceed that of a travel trailer and the depreciation could easily put you upside down with just 5-10% down. Add in the unexpected repairs and it can turn into an unpleasant experience.

[Tonkexpress1]

You are not going to like how this story ends when you have to write a check to the lender to get rid of it. The older MH is a money pit. Thousand here thousand there=it never ends.

[450Donn]

Lets look at it this way. 5% down, payments of XXX.XX for lets say 36 months. At the end of 36 months you still have an outstanding balance of XXXXX.XX. but and heres the rub rhe RV whether its a new TT or a used MH is only worth XXXX.XX . In laymans terms your upside down. If you try to sell it, trade it or what ever your going to wind up paying a lot of money for something you no longer own.
Your best bet, buy a used TT something you can pay cash for and go camping. If at the end of 3 years you might decide you absolutely hate or maybe love camping. At which time you can make the wise decisions about what kind of RV you might want. Realize most folks start out with 1 RV and after a season or two find enough dislikes that their ready to move on to something else. Buying used for your first few RVs gives you rhe chance to find what you really want. It took us 20 years wirth of RVs before we found the perfect fit for us. That one lasted 13 years before we had to sell out for health reasons.

[mtofell]

It will be difficult to find 5%.... not impossible but difficult. There's a reason lenders don't go that low. You will instantly be upside-down.... possibly A LOT. Lenders don't like that. Even at 10 or 20% many folks are instantly in bad shape.

[Solo_RV_Guy]

If you can only put up 5%, you cannot afford the RV or the first repair bill. About every 2 months we read a tale of woe from someone who found a 'good deal', and either financed way too much and now need to sell, or put all their cash into the purchase with no reserve for "oh sh...ucks" moments. Either way they are usually stuck somewhere in dire need of repairs or service they can't afford and cannot perform themselves.

Don't be one of them.

[Roy-c]

No, NO,NO! Financing a new OR used RV with low down payment is a mistake. You will definitely be upside down for the life of the loan. listen to the advice you are being given.

[triplewide]

450Donn


Your best bet, buy a used TT something you can pay cash for and go camping. If at the end of 3 years you might decide you absolutely hate or maybe love camping. At which time you can make the wise decisions about what kind of RV you might want. Realize most folks start out with 1 RV and after a season or two find enough dislikes that their ready to move on to something else. Buying used for your first few RVs gives you rhe chance to find what you really want. It took us 20 years wirth of RVs before we found the perfect fit for us. That one lasted 13 years before we had to sell out for health reasons.[/QUOTE]


Crasher
To each his own, but I wouldn't buy a used motorhome with anything less than 20-25% down, especially a DP. The operating costs of a MH far exceed that of a travel trailer and the depreciation could easily put you upside down with just 5-10% down. Add in the unexpected repairs and it can turn into an unpleasant experience.



Tonkexpress1

You are not going to like how this story ends when you have to write a check to the lender to get rid of it. The older MH is a money pit. Thousand here thousand there=it never ends.




What they said ^^^^^

[MapleKing]

Thanks for the responses so far. To be clear, I'm a current travel trailer owner and have been for several years. I understand the concept of being "upside down" in a loan. I'm also looking to purchase something in the next few months for use next year which gives me time to get ahead on the loan. I'm not putting every penny I have for the down payment and leaving nothing in reserve as some have suggested. I was just asking a question about lenders.


The only reason the topic came up was layouts. I know from our experience 8 years ago that there isn't a perfect layout but we found that Thor made a Vegas model from 2017-2019 that is actual is perfect for us. We could easily settle on a travel trailer but just wanted to look at options.

[stew1]

We got our first class c of of creglist paid 6000 cash just to see if we like camping keep for two years , then went to a used class a , a 2002 with 36 thousand miles have never look back. Traded c for a at dealer

[CWSWine]

We never pay cash since to buy a motorhome cash we don't have that kind of money sitting in a checking account and it would foolish it we did. We could cash investments and pay capital gains tax and pay for the motorhome then replace it paying all the fees. To me that not got business sense. We put 20% down and finance our motorhome for 10 years to get the best interest rate. Now we paying double and sometimes triple payments and should have paid off in 4 years.


As far as loans we have good relationship with our bank that we built it up over the years and we get good deals. If you don't have that I would check with credit unions and if you go though a dealer SOMETIMES they can get you a better deal.

[triplewide]

Originally Posted by MapleKing

Thanks for the responses so far. To be clear, I'm a current travel trailer owner and have been for several years. I understand the concept of being "upside down" in a loan. I'm also looking to purchase something in the next few months for use next year which gives me time to get ahead on the loan. I'm not putting every penny I have for the down payment and leaving nothing in reserve as some have suggested. I was just asking a question about lenders.


The only reason the topic came up was layouts. I know from our experience 8 years ago that there isn't a perfect layout but we found that Thor made a Vegas model from 2017-2019 that is actual is perfect for us. We could easily settle on a travel trailer but just wanted to look at options.

Sorry if some of our posts made unwarranted assumptions. May have overreacted because many people do get in to the "upside down" situation which is a tough place to be. I have met a few when looking for a "new to me" coach.


Good hunting

[Gary RVRoamer]

I'm also looking to purchase something in the next few months for use next year which gives me time to get ahead on the loan.

I think you are dreaming. You aren't going to get ahead of it in a year. Or 2 or 3. You are buying retail but the used value is wholesale if traded and not much better in a private sale. Low retail value at best. Lenders know this well, which is why they usually ask for 20% down and maybe settle for 10% if you are a good credit risk. Getting into an RV loan with a low down payment is just digging a financial hole.


With you credit score, you may be able to get a lender to do 5% but probably not on a long term loan. Many people want 15 or even 20 year loans on a Class A, and by then its value is next to nothing. If you are thinking 3-4 years, then maybe.


One of the problems with RV loans is that the resale value is highly variable based on condition and there is not a wide wholesale (auction) market for the bank to easily recover its principle. They know they would be lucky to get back 50%-60% if you default, thus the high down payment requirements.