Beware Of RV Financing Pitfalls!RV financing can hardly be regarded as a necessity. However, if you have found the motor home or RV of your dreams, but you don't have the thousands of dollars lying around to purchase it, you will need to investigate available financing options. Here are some guidelines to consider. First, make sure that you really want to make this purchase. RV financing is just like any other debt. Over the long run, you will pay much more that the asking price for that RV. Would a cheaper model make your make your loan terms a little easier to handle? Second, make sure that you can afford it. It may seem that the terms of your RV finance agreement will be easy to meet now, but how about at the end of the year, when property and income taxes start to come due. That easy to make payment can make your life very difficult later on. Your credit score is important to consider as well. If your score is low, you may want to wait before seeking RV financing. Remember, unless you are one of the rare individuals who need an RV for work, an RV is a luxury item. Getting a high interest loan for the family car can be an unavoidable necessity, but high interest financing for an RV or a motor home is seldom a good idea. Spend some time getting your credit score back in shape, and you will be rewarded with lower payments. Keep an eye on the interest rates. Waiting a few months for your purchase until RV financing rates are lower can be a very smart move. One popular option for RV financing is to purchase with a home equity loan or a second mortgage. The higher collateral value of your home will often allow for better interest rates, even in a bad market. This sounds good, and it can be. Just be sure that you can afford to make the monthly payments long term before you put your house on the line. One critical question to ask is, do you really want an RV? Getting financing for an RV that will just sit on blocks most of the time is not a good idea. Consider renting an RV a few times before you start investigating a purchase. You will not only get a feeling for how much you will like the RV or motor home lifestyle, but you can try out several models to see what kind of rig works for you. When seeking RV financing, work with a reputable financial institution. Just as with car or house loans, RV financing has it's good guys an it's bad guys. Your home bank should always be a prime consideration, especially if you have a good relationship. They will often shave some points or closing costs to add additional value to your account. Many RV dealers will try to provide RV financing on site. This can be a good thing. They will have trained loan officers with years of practice writing this kind of instrument. But they may also try to lock you into terms you won't be able to afford later on. Before agreeing to RV financing with any company, check them out with other RV users. Have they kept their promises? Have they been responsive to problems? Beware of balloon payments or scaled interest rates. This usually means that you are buying a unit that is out of your price range. Use the same care with RV financing that you would with any other major purchase. Be patient, be knowledgeable, and don't let anyone push you into a deal that you aren't comfortable with. |