Financing

One Question? When was your last home appraisal?

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When was your last home appraisal?

Home values are on the rise across the United States and homeowners are turning to mortgage professionals to help tap this equity and get in a better financial position.

When interest rates rise, home values tend to rise too. This is great news for you, the home owner – You can now access this equity and get ahead!



If you have not had your home appraised recently, it’s time to contact a banker today and discuss some money saving options.

A refinance can help you get the cash you need for:

1. Debt Consolidation

2. Home Improvement

3. Medical Expenses

4. Tuition Expenses

5. Large Purchases/Vacations/Weddings

6. Eliminating Mortgage Insurance

7. Convert an Adjustable Rate to a Fixed Rate

8. Consolidate a 1 st and 2 nd mortgage

9. Lower Rate – Pay off the home faster!

There are some great new loan programs for 2019:

  1. FICO <500

  2. FICO 500+

  3. Self-Employed

  4. Investor/Too-many-financed properties

  5. Asset based loans

  6. Credit Repair

  7. Fresh Start/Second Chance Loans

  8. 1 Day Out of BK or Foreclosure

  9. Expanded Credit Guidelines – Making it easier for you to qualify!


Did you know there are options that involve $0 closing costs out of pocket – Only an appraisal, if needed!

Smart home owners are refinancing their mortgages and taking advantage of a low rate while they still can.

The time to lock in your rate is now!




Customer Testimonials:

 “I was connected with a banker who was very knowledgeable and offered a better rate than my local bank. My loan closed in just 3 weeks! Thank you for all your hardwork!  - John M – Orlando, FL

 “I just want to thank the team WaveWallet connected me with for my refinance. The banker and processor were on top of my loan every step of the way. It closed much sooner than I expected. I saved over $2000 per month! I can’t believe it!  These guys are professionals!!”

                 Jenny – Sugarland, TX

Items to Prepare:

  1. Mortgage Statement

  2. Home Owner’s Insurance Declarations Page

  3. Income Documents

  4. 2017/2018 W2

  5. 2 Recent Pay Stubs

  6. Tax Returns, if self-employed, all pages, all schedules

  7. Retirement Income – Award/Benefit/1099s

  8. Photo ID

  9. 2 Months Bank Statements – All pages

  10. Statements for any bills you wish to consolidate with a home loan

Contacting WaveWallet for help with my home loan refinance was the sma2rtest financial decision I ever made!! My payments fell by over 50% and I paid off all those high rate credit cards. I am a disabled veteran and I was introduced to a banker who understood my situation. I can finally sleep at night.”      Wendy C – Orange, California

The pro's and con's of Rent to Own RV

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The Pros and Cons of Rent to Own Campers

The tiny home movement has brought with it many new styles of living; off-grid homes, micro houses, and in many cases, homes on wheels. Full-time living in an RV isn’t a new concept, but it’s one that’s been gaining a lot of traction lately. People are drawn to RV living because it allows you to travel and lead a fulfilled life without having to pay for a home or apartment at the same time. That being said, the start-up cost of buying an RV can be gargantuan. In many cases, RVs can cost just as much as a house! However, there’s another option for people who want to own a camper without the upfront costs: rent to own camper trailers.

The Cost of Ownership

Buying an RV is no easy feat. You’ll need to do hours of research just to find the RV that’s right for your needs! On top of that, there’s the process of finding financing, saving a down payment, and much more. There are a few things to consider before buying an RV:

  • Think about whether you want a newer or older RV. Newer RVs will have fewer problems and will come with a warranty. However, it’s going to cost you big bucks. On the other hand, an older RV will be less expensive, but you may need to budget more in maintenance costs.

  • Finding financing can be a real pain. Newer RVs are easier to finance. Many banks won’t finance RVs that are older than 15 years, so that’s something to keep in mind. Either way, you’ll need good credit to get traditional financing, just like you would with a house.

  • You’ll need a sizeable down payment to finance an RV. You probably want to put $5,000 at the very least. If you don’t have a lot for a down payment, look for longer financing terms to offset the monthly cost.

  • You’ll also need to get the right type of insurance for your camper. If you’re only going to be using it on weekends and for short vacations, you can get insurance through your auto insurance provider. If you plan on living in the camper, you’ll want full-timer insurance, which is a combination of homeowners and auto.

  • If you aren’t going to live in your camper, you’ll need to make storage arrangements. This is another significant expense. Winterizing and storing an RV can cost as much as $400 per month!

Search Rent to Own Inventory here.

Renting a Camper

Obviously, if your budget is tight and you don’t plan on living in your camper, renting one is the way to go. Peer to peer RV networks like ours offer some of the best rental rates on the market. Here are some benefits to renting a camper through RVshare:

  • You can find campers of all shapes and sizes, which is great if you want something older and more affordable.

  • You’ll work with the owner directly and can message them through our online platform. You can negotiate rates, terms, and even ask if the owner has rent to own trailers.

  • If you’re renting, you don’t have to worry about storage costs and maintenance.

  • Renting a camper is a great idea if you’re thinking about buying one or have never been RVing before. You’ll be able to test out the different styles you like and see whether living in a camper is right for you – all before you make the commitment!

Need RV Financing? Click here.

Benefits of Renting to Own

A quick search of “rent to own campers near me” will pull up thousands of hits on Google. There are plenty of RV owners and dealers who are willing to work with people who want to eventually own their campers. Renting to own is the best of both worlds:

  • They’re often financed by the dealership or owner directly. That means you don’t have to deal with financing through a bank. It’s a good way to get an older RV, which banks won’t usually finance.

  • You won’t need to put down as much of a down payment. In some cases, you may not need one at all.

  • Renting to own is a good option if your credit is less than desirable. Traditional banks treat RV ownership as a luxury, so their credit requirements are usually pretty tight. However, keep an eye out for rent to own campers no credit check scams. While there are legitimate deals, some of these scams have interest rates through the roof.

  • You may be able to negotiate the terms with the owner or dealer. Many times, rent to own campers are listed as such because the seller is motivated, or the dealership needs to move inventory. Use that to your advantage.

Should you Rent or Own a Camper?

Of course, the decision of whether it’s better to rent or own a camper depends on how you plan on using it, in addition to the state of your personal finances. If you’re only going to use your RV for weekend trips and short vacations, you may want to consider renting on an as-needed basis. Otherwise, you’ll have to budget all the other expenses that come with RV ownership, like storage and insurance.

Buying an RV to live in, on the other hand, is another story. The costs of renting an RV for months at a time can get expensive. If you’ll be spending lots of time in your camper, you should probably buy one. Thankfully, if you’re dead-set on buying a camper but don’t have the up-front costs or credit, renting to own is a viable option. It’s not hard to find a camper for rent to own, and the benefits are abundant. You’ll enjoy the perks of ownership without the limitations of financing a new (i.e. expensive) RV. It’s an affordable option, whether you want to live in your camper or not.

Closing Thoughts

While RVshare does not offer a rent to own option, we wanted to make sure you know every possibility that is available to you. Rent to own campers give people the opportunity to own an RV when they may not have otherwise been able to. If you’re interested in renting to own, check with your local dealerships to see what’s available. Just remember to read the terms carefully and watch out for high interest rates and “bad credit” scams. Good luck!

For more information visit NoCreditCampers.com

Get Your Loan Approved With Bad Credit

NO CREDIT CAMPERS.COM IS INNOVATING THE MORE EFFICIENT WAY TO FINANCE RV'S

Traditional RV financing makes the process very complicated by requiring you find a Camper you like, and then discuss financing. No Credit Campers.com offers a solution that allows you to have the cash in your hand BEFORE you go shopping for you dream Camper. This allows you to negotiate the most fair pricing to dealers and private party purchases by giving you the power to say you have the cash in hand.

For more information click here.

 

FINANCE FREEDOM

No Credit Campers saves you the hassle of shopping around by offering over 500 financing partners to assure you receive the best offers.

There is never a minimum credit score required as we work hard to get every application funded.

VALUE PRICING

We've eliminated the middle man and made the whole process more efficient. Go into dealerships, craigslist, and Facebook groups with the confidence of having cash on hand.  

Also, visit our clearance mall that includes Free Shipping here

FUNDS DIRECTLY TO YOU

No Credit Campers.com made sure to only work with financing partners who do direct loans. It's your money, don't let the dealerships and banks make money off of it.

Approved loans are funded directly into your bank account. You choose what you want to do with your money.

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Bad Credit RV Loans: Get Approved

Bad credit can be an obstacle to getting the things you want in life, but not necessarily an insurmountable one. For example, if you have always wanted a recreational vehicle (RV), you know that it is the type of big-ticket item that can be hard to secure financing for if you have bad credit. This guide to bad credit RV loans will give you some tips on improving your chances of getting financing, as well as making sure this is the best long-term decision to you.

Bad Credit RV Loans: Improving Your Chances

Have no illusions about this – having bad credit will make it tougher to get an RV loan. However, there are a variety of steps you can take to improve your chances:

  1. Make progress in your credit history. Identify the reasons your credit is bad, and start addressing those problems. This can entail catching up with overdue bills, paying down credit balances, or correcting errors in your record. Even if these steps don’t immediately restore your credit rating to the low-risk range, being able to show a lender progress will demonstrate a change in the right direction.

  2. Show improved earnings power. Your credit rating is based on the past, but a significant raise in pay could make a meaningful difference in how risky lenders consider you to be. If your household has recently added an income, this might be another way of making lenders more confident in your ability to repay an RV loan.

  3. Demonstrate a reduction in other payments. Income is one thing, but your ability to repay a loan also depends on how many other financial obligations you have. If this burden has recently become easier, for example if you have recently retired an old debt, it should improve the way that lenders view you.

  4. Build up a strong down payment. In general, the higher the down payment, the more forgiving lenders tend to be about credit standing. So, if you want to overcome credit problems, building a down payment of 20 percent or greater should improve your chances.

  5. Know the value of what you are buying. The RV you choose would be the collateral for the loan, so a bad deal for you would also be a bad deal for a lender. Make sure you know the market well enough to spot a good deal, because this will increase your chances of finding a lender who feels the collateral is sufficient for the loan.

  6. Take advantage of the dealer’s financing relationships. If you are buying from a dealer, use the fact that the dealer is motivated to complete a sale. Some dealers offer their own financing, while others have relationships that might get you a more welcome reception from a lender.

  7. Shop around for financing. Even if a dealer can finance a loan or introduce you to a lender, don’t settle for loan terms until you’ve done some shopping around on your own. It’s not just interest rates that vary from one lender to another – their tolerance for weaker credit also varies, so shopping around can help you find a lender willing to offer reasonable terms to someone with less-than-perfect credit.

Making the Right Choice

Getting approved for bad credit RV loans is part of the challenge, but what may be even more important in these situations is making sure the purchase is the right choice for you. Going through the following steps will help you determine whether or not you are fully comfortable with this commitment:

  1. Recognize the cost of bad credit. It’s almost certain that your bad credit rating is going to require you to pay a higher interest rate. Run a couple amortization schedules comparing the total interest costs of the loan terms you’ve been offered with what those terms would be if you had good credit. This will show you what the cost of your bad credit will be over the life of the loan. You can decide whether it might be worthwhile waiting until you can repair your credit before you make this purchase.

  2. Make a budget you can live with. Look at the monthly payment you have taken on, and figure out in detail whether it is something your budget can live with. Remember, this purchase is supposed to bring you joy, not cause you stress. LendingTree’s RV loan calculator can help you estimate loan payment amounts.

  3. Be sure of your commitment to this vehicle. An expensive vehicle like a RV can depreciate in value by a great amount after you buy it, so if you have to re-sell it, you could take quite a loss. The point is, make sure that this is something you are sure you are buying for the long-term. If you’ve never been behind the wheel of an RV before, consider renting one before buying to make sure you know the ins and outs of operating one.

The most important part of pursuing your dreams is making sure you are clear on what those dreams are. If you have thought through the nature of this choice and the financial consequences, the above tips could help you pursue the dream of owning an RV.

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Owner Finance RV or Dealer Finance

OK your ready to get an RV loan to buy your dream RV, but you have questions.  Where do I go to get a loan?  Should I do something prior to getting a loan?.  How do I get a good interest rate?  Will I be able to afford the monthly payments?  What if I get turned down?  Oh Great, now I am dazed and really confused and my head is spinning and I feel ill.

Calm Down and take a breath, I am going to help you.  Getting an RV Loan isn't Rocket Science (actually Rocket Science is easier than getting an RV loan, JUST KIDDING).

How do I get a good interest rate?  

The first thing you need to understand is that just like any loan your interest rate is based on your Credit Score.   Do you even know what  your Credit Score is?  This is an important topic, so we have dedicated a whole page to it.

Your RV Loan Interest Rate Will Depend on Your Credit Score.

Once you've completed the section on credit reports you should review the two additional steps to getting a loan for an RV.  These steps will answer all of your other questions about getting a loan for an RV.

Step 1:  What to do before financing an RV.  Actually these are items that you should ponder, before actually seeking a loan.  These are monthly costs for owning an RV and should be reviewed before deciding what monthly loan payment amount you can afford. 

Some of these items may not have even crossed your mind, that is why I am here to bring them to your attention (because that's what I do).

Step 2:  Is a primer (tells you how to do things) on getting the best loan you can on  your RV purchase.  How diligent you are at completing step 1 will determine, how well step 2 will turn out (that's a hint, if you skipped step 1, you might want to go back and take a look at it).  I will give you a few tips on shopping for a loan (and this is definitely not like buying eggs at a supermarket with a coupon).

I know how excited you are about getting an RV.  We were too, when we got our first RV and our second RV and our third RV etc.  By providing these steps, I hope that I have helped answer some of your questions about RV Loans.

Once you have purchased your RV, you will have a chance to experience the RVing Lifestyle, and I know just like us, you will loveit.  The memories you create by RVing will last you a lifetime making the steps you had to take to get your RV worth the effort.

Thanks for stopping by and Happy RVing. 

Do you have any suggestions or comments on this topic?  You can add them to this page by using the comments section located near the bottom of this page.

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Get the best deals on RV financing

Recreational Vehicle Financing Rates and News

If you have been searching for RV loan rates in 2018, you may have noticed the recent wave of RV rate increases. While the hikes of 2017 were only .25% to .37% on average, they have increased by .50%, (from their lowest point), or more so far this year. This makes it different from other upturns we have seen over the last several years, that quickly reverted back to the previous levels. This "sticky" spike leads us to conclude that rates had likely hit rock bottom in December of 2016, or very early in 2017.

All the RV news isn't that bad; after a number of years of declining RV sales, financing and other RV related services, many economic indicators have been heading in the right direction for the industry. Most of the dealers surveyed expected an increase of 12% to 17% in orders of new units from RV manufacturers; reaching for greater sales levels than the last several years of higher than anticipated totals.

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Lower Interest Rates May Have Bottomed Out

Much of the new business may be coming from buyers who have been "on the fence" in deciding when to purchase. With rates currently on the rise, this trend should continue. The "Fed" will have to start raising rates sometime fairly soon, and the smoke signals we're seeing now could be read like a neon sign later in the year.

The improved economy and growing consumer confidence should continue to stimulate more sales of motorhomes and other types of recreational vehicles. RVs are even becoming "Cool" with the emerging baby boomer market.

The RV financial service providers indicated that interest rates for RV loans had hit bottom late last year, and we were in a rising interest rate economy. Our own research shows that rates had continued to hold at record low rates for most of last year, with some minor, short-lived spikes in recent months. (These increases have been confirmed as of 2017 with a quarter to half-point increases holding after the first couple months of the year.)

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We can also finance older used RVs and motorhomes, (from 10 - 12 years old), so you can easily find seven to ten-year-old luxury motorhomes from $60,000 to $80,000, or even less. So if you've been thinking of taking the plunge, come on in - the water (and rates) may be rising soon.

The banks, as well as online RV loan brokers, felt the trend could very easily reverse course if the economy began to sputter - or even if things began to heat up and jump-start a new ripple of competition between RV lenders. (That seems less of a chance now, as there are so few national RV lenders even in the market.)

The head of RVIA, the Recreational Vehicle Industry Association said that he expects shipments of new RVs to continue to increase this year. We agree that this will be another year with increases of 5% to 6% higher than last year. RV manufacturing, much of which is located in Indiana, is an $11 billion dollar industry, now employs close to 300,000 people, with mergers of existing manufacturers and new brands emerging at an increasing rate.

And Now, a Word from the Government

Although current economic conditions have improved, uncertainty in government policies may still dampen spirits if political leaders continue to keep their focus on their own interests above those of the American people. (Or vise versa, depending on your own opinion and current developments. This seems to be a common topic in recent events; and in the opinion of many people surveyed at recent shows, the industry news and media, and RV events across the country.)

At some point the Fed will have to begin to increase interest rates - however, with inflation remaining stable, that may not be enough to derail the recreational industry's current "freight train" momentum. The recent election instability has begun to confirm our theories that we are beginning to enter a rising rate environment.

But Wait - There's Still More

All government and political issues aside, the RV market is being "buoyed" by the ever-increasing demands of retiring, or "soon to retire" baby boomers. The Gen X'ers and Millennials are falling in line right behind them.

With these higher numbers of potential RV buyers entering the market, forward-thinking RV manufacturers are continuing to engineer and produce lighter and more efficient units at virtually all price levels. This is helping keep the younger, entry-level buyers engaged with more economical and easier to purchase RVs at most all levels.

These gains in innovation are also keeping older, or should I say "Seasoned" RV'ers in the game by helping reduce operating costs, making more maneuverable units - and even lightening up the Big Boys. What are ya gonna do, but keep on rolling!

Continued gains in the job market, and higher household incomes and the current record-low interest rates, would seemingly project an extremely favorable outlook for the recreational industry in the foreseeable future.

Regardless of the outcome, the near-term months and approaching years are widely projected to be the best time to purchase and/or finance an RV. If you are in the market but may have been waiting for the rock bottom. That time could very well be now. Stay tuned for updates, or just get it out of the way while the getting is good.

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No Credit Check RV - Not all dealers are bad

Buying & Financing an RV - The Dealer is Not the Enemy

Statistics show that the 80/20 rule applies to RV sales profits. This means that approximately 80% of all RV's sold will make the dealer an acceptable profit. How much is that? I can tell you it is measured in the thousands... and even tens of thousands of dollars. As you will learn, this applies not only to the sale but also to the RV financing.

How about the other 20%? Most of them will fall into the area of "just under the acceptable range". But, they are still paying the dealer several thousand dollars in profit. Actually, only about 10% - 20% of RV sales made last year were at a profit margin that would be considered totally unacceptable to the dealer. In other words, the customer won... and won BIG!

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I've always believed that buying, or selling an RV, really doesn't have to be that difficult. It basically depends on how each of the parties involved has been trained, and what they have learned.

My sales people have always been taught to be courteous, helpful, and most of all professional. They return phone calls. They send thank you notes. And, they treat each and every customer with respect.

They Are Also Taught Two Basic Principles:

1. Make a reasonable profit. We have earned it and we deserve it. We have to pay the mortgage, utilities, salaries, RV sales, and financing commissions, etc. So by all means, make us a reasonable profit.

2. Sell RV's. Always try to make a reasonable profit, but if you can't... at least try to make some profit. A little of something is better than a whole lot of nothing.

It's really very easy to save a substantial amount on the purchase of your next RV... If, and only if you know exactly what to do. Here's a look at a typical outing to the local, or not-so-local RV dealership.

The Gun-Fight at the O.K. RV Sales Corral

Most people walk into an RV dealership with the impression that they are going into battle. They bristle with resistance as the salesman introduces himself, and begins the cat and mouse game of "I can sell you... No, you can't."

The salesman is asking qualifying questions, to hopefully keep from walking all over the lot and showing each and every RV. You are simply trying to see the different styles, options, colors, models, etc. It is a tug of war... But it doesn't have to result in all-out war.

Obviously, the dealer, as the individual or business that has shelled out literally millions of dollars to provide a good inventory of recreational vehicles, has the right to regulate the flow of potential customers through his doors. He also has the right to dictate what type of methods his salespeople use.

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When people walk through the doors of the dealership, many salesmen, like a cop in a bad movie, will subconsciously read you your RV Miranda Rights.

You have the right to remain ignorant. Anything you say can and will be used against you in the sales office. You have the right to speak to your spouse, and to have your spouse present during any negotiations. If you cannot afford an RV, one will be financed for you at 1% to 3% over "buy rate". (Buy Rate is the Dealer's actual interest rate charged by the lender.)

This is the mentality of many, many RV dealers and salespeople across the country. They will use any means possible to sell you an RV from their inventory, and their lot. They will use a multitude of tricks and strategies to "help" you buy on your first visit. They will give you formidable real and/or "not-so-real" reasons to buy NOW! (You should already know, or have the knowledge to recognize any "Real Reasons" the dealer may legitimately offer. They can be BIG money-savers.)

You, as the consumer also have a set of rights that you should go over mentally as you walk through the doors of any dealership.

The RV Consumer's Bill of Rights

1. You have the right to be knowledgeable. Anything you have learned can be used against any high-pressure tactics of a salesperson or over-aggressive sales or finance manager.

2. You have the right to take your time. Although you do have the right to know how to use urgency to your advantage.

3. You have the right to know the wholesale and retail book value of your trade-in, as well as the RV you are potentially buying.

4. If you finance your RV, you have the right to choose your own source for your RV Loan, at the best interest rate and terms possible.

5. If you choose to purchase an RV Warranty, you have the right to a fair price and a reputable company.

Clearly, the dealer is entitled to some profit... Without it he could never survive. Many dealers make HUGE profits on the RV's they sell. Your job as a consumer is to make sure that he pays the rent on the next buyer... Not you.

You are Your Own Worst Enemy...

Most people never take the time and/or money to learn. They don't realize that when they walk into the dealership and sit down, they have taken a knife to a gun fight. Dealerships spend thousands of dollars training their salespeople to make a good profit on each and every person they work with. Yet still, the vast majority of buyers never take the time to really learn how to buy an RV at a minimal profit for the dealer.

Unfortunately, there is very little good information out there on the subject of RV related SAVINGS! There are plenty of books on how to use your RV, fix your RV, and travel in your RV. There are even some books on the subject of buying an RV. But all of them combined seem to provide very little real-world, down and dirty strategies for saving money.

I have read every book that is available on the subject and find all of them very lacking in good advice. If you are only armed with the advice in these manuals, a good salesman will eat your lunch every time.

Not only must you be able to buy your RV very near the dealer's cost, you must be skilled in evaluating the quality, or lack of it, in the various makes and models you have to choose from.

One important thing to consider is the issue of a trade-in. Should you put forth the effort to sell your own RV before you purchase another one? "Effort", is the key factor. If you put in the effort, you deserve to keep the profits of your labors.

What About My Trade-In?

If you trade in your RV, the dealer will be the one who puts forth the effort to sell your unit. He will be the one to make interest payments on it while it sits on his lot. He will incur the advertising expense, sales commissions, etc. He will also have to fix any defects or problems as well as typically providing a warranty on the unit for a minimum of 30 days.

In other words, don't expect to get full retail for your trade-in. It doesn't happen... Ever. (See our article on evaluating your RV Trade-In Value.)

Some Parting Thoughts...

People ask me time and time again: "When is the best time to buy an RV?" My answer is always the same. "Anytime..." They then typically reply: "No, I mean is Winter the best time? Or maybe at the RV Shows? What about the end of the month, I've heard that is the best time of the month..."

The truth of the matter is this: RV dealers need to sell and finance RVs all year long. Some sales make a lot, some sales make a little. Your job is to make sure you have the skills to play the game effectively.

As long you are armed with the proper tools, and by that I mean information and knowledge, you should be able to negotiate a deal that is fair to both you and dealer. No matter what time of year, remember... Knowledge is power. Use it to your advantage.

Do your homework. Research various models and dealer pricing. Leave your checkbook at home until you are ready to make an offer. Remember the value of the Internet and the ease of shopping it offers.

And always remember... Be kind to your local RV dealer. He is the one most likely to be servicing and repairing your RV. A few dollars more - spent locally... Are wisely spent.

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Insider RV Financing Strategies - Buy here pay here

Insider RV Financing and Loan Rate Strategies

Many people who contemplate financing an RV, or any other high-ticket item such as a boat or private aircraft, are intimidated by the length of the financing term needed for an acceptable payment. Typical financing terms are 10 to 20 years, with 15 years being the most common.

Some consumers choose a shorter financing term and a higher payment simply because of their fear of the longer-term commitment. Even though they obviously know RV owners rarely, if ever, keep an RV for the entire term of their financing; they choose a shorter loan term. They unnecessarily strap themselves to a higher payment that could strain their budget - should illness, unemployment or other hard times take place.

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Most buyers choose the longest term available to secure the lowest payment possible - even though they could afford much more. They pay more interest than principal during most, if not all of their actual loan period, and wind up in an "upside-down" position.

In other words, the remaining payoff on their loan is much more than the actual value of their unit when the time comes to trade or sell their RV.

A Hybrid RV Loan System

Savvy RV buyers use a "Hybrid" type of financing system to get the best of both worlds. They finance the RV for the longest term available for the loan amount, which makes the payment lower than they can actually afford.

During the loan, they make the monthly payment PLUS an additional amount, which is directly subtracted from the principal amount of the loan.

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When this approach is followed with a good degree of discipline, it can lower the "effective" interest rate to as much as half the original rate - as well as dramatically shortening the length of the loan term.

It also allows the most flexibility. Should the borrower face a situation where times are rough or money is tight, they still have the luxury of making the lowest payment possible.

An Example of a $50,000 Loan

Interest Rate - 5.25%
Term in Years - 15 years
Payment Amount - $428
Total Interest Paid - $27,168

If this person added $50 to each monthly payment, he would change the repayment terms to:

Effective Interest - 4.64%
Loan Term in Years - 12.63 years
Total Interest Paid - $22,418
TTL Interest Savings - $4,750

Now let's assume that this person added $150 to the monthly payment.

Effective Interest - 2.62%
Loan Term in Years - 8 years
Total Interest Paid - $5,487
TTL Interest Savings - $21,681

The example above is ONLY on a loan of $50,000. Imagine the savings if this strategy was applied to an RV loan of $100,000 or more! It is all about planning, application, and discipline. But, if he happens to miss a few months, he just saves a little less.

What's the Bottom Line?

Comparing our last example of a consumer applying a hybrid system - to an individual who took out an 8-year loan upon purchasing the same RV... The hybrid system would have saved nearly 4% in interest over an actual 8-year loan term.

By shortening your loan term from 15 years to roughly 8 years, he would have saved over $21,000 in interest. He has also reduced the "effective" interest rate to less than 3%.

Plus, the buyer has paid off a 15-year loan in about 8 years! Even if he misses a few months of additional principal payments, he will still have saved thousands of dollars in finance charges.

The additional $150 per month added to principal has saved about $78 per month over choosing an 8-year initial loan term. That equates to about $7,500 savings in payment amount over the course of the loan.

What if I Don't Make the Additional RV Finance Payment?

The key to making a hybrid payment system work - is discipline. You must make the additional principal payment every month, or very close to it. You should be certain your scheduled payment amount plus any additional amount you plan to add toward principal is within your budget.

Even if you intend to use a hybrid payment system, but never add an additional penny to the principal loan amount, you will have simply paid off your loan, in the same manner, the majority of RV financing buyers choose.

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The RV Loan Approval Process

Motorhome and  RV loans are considered to be "Recreational Financing". This basically means that they are for "Luxury" items. Things you could live without if best, for some unexpected reason or event, came to worst.

Most people have applied for various types of loans in their lifetime. Student loans when you were younger. Auto loans may also be among the first types of loans that you have become familiar with.

Later in life, you may have encountered home loans, or even business financing, equipment, inventory and other types of credit lines. This list is seemingly endless, all with different criteria in qualifying and underwriting guidelines.

RV Loans vs. Other Types of Financing

Most of these types of loans are considered necessary expenses, such as your home and auto loan. If times become tough, or if you have unexpected medical bills or become unemployed, these "necessary" expenses are usually bills you would find a way to pay.

After all, everyone needs a roof over their head, as well as a means of transportation to get to work, the doctor - or even the unemployment office. You also have other fundamental expenses such as utilities and food. All of these things are considered necessary expenses.

Now, you may be considering purchasing an RV, and are possibly finding it much more difficult to qualify for this type of financing. It doesn't seem to make sense, since in many cases, your home, or even your car cost more than the RV or boat you are trying to finance, yet you easily qualified for these loans.

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Why is it Harder to Buy an RV Than a House?

Once again, lenders have to look at the difference between loans for necessary items and "Recreational Financing". The first being things like home and auto loans. The latter, being recreational items like motorhomes, boats or even other power sport related items such as motorcycles or personal watercraft.

Before the financial crisis and banking system "Bailout", recreational financing was much easier to obtain, just like the sub-prime home loans that led to the financial meltdown in the first place. Loans with zero down payment and "No Doc" loans were readily available - even in the field of recreational lending. Those days are long gone. And, if the banks are giving any indications, likely to never return.

Now, RV lenders are much more critical of things like:

1. Credit Score. (Above 700 normally required.)
2. Debt-to-Income Ratio. (Usually no greater than 42% - 45%.)
3. Liquid Assets. (How much money you have in accounts or investments.)
4. Employment & Residence History. (Over 2-years each is preferred.)

Lenders are even looking at a factor called "Payment to Income Ratio". This means that the payment for your new RV cannot exceed roughly 15% of your total monthly income. This is usually not a problem for individuals with higher incomes, but more likely to affect retirees or those on fixed incomes.

So, even though recreational financing is more difficult to obtain, it is not impossible by any means. An RV loan pre-approval can be helpful in determining if you qualify, and what price of RV you can afford - or - at least what the bank says you can afford.

To obtain pre-approval, you will first need to select a particular year, make and model, and establish an approximate selling price. This information is necessary, since part of the approval is based on the "NADA Loan Value" of that particular year, make and model of RV.

Once you have been pre-approved, you can switch to another similar unit and be relatively sure you will qualify, if it is relatively similar to the unit on which you were approved.

If you choose an RV Loan Pre-Approval, just enter the information for your "Subject Unit". We can normally receive a decision from the lender in as little as one day, so you're ready to close your loan as soon as you find the RV that's just right for you.

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