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03-19-2008, 02:18 PM
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#1
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Montana Master
Join Date: Jul 2006
Location: Olahoma City
Posts: 1,219
M.O.C. #6054
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Which way to finance?
Just curious if most people finance their tow vehicles and RV seperate or as combo loan?
My banker asked me if I wanted to do a combo when we were talking last week. I looked at him kind of funny and asked which drive through was he talking about? Then he explained how much I could save by combining the tow vehicle and RV into one loan. I think it looks great on paper but would like to hear from others who have went this direction. The savings per month is over $300 so I am having a hard time not just signing up today.
TIA!
Phil
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03-19-2008, 02:38 PM
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#2
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Montana Master
Join Date: May 2003
Location: New Bern
Posts: 4,294
M.O.C. #311
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I think that loan is classified as a second home so the interest can be applied to taxes. I guess it is not different then buying a motor home. I think I would go for it combined and get better tax deduction. Only my opinions.
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03-19-2008, 02:43 PM
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#3
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Montana Master
Join Date: Mar 2007
Location: Bonita Springs
Posts: 1,943
M.O.C. #6977
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if you can get the tax saving go for it john
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03-19-2008, 03:00 PM
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#4
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Montana Master
Join Date: Jan 2006
Location: South
Posts: 2,499
M.O.C. #5140
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Just remember, you may save $300 per month, but you'll be making payments much longer on your TV than you would if you financed seperately with different terms. Typically, an RV is 10 to 15 years, while a vehicle is maxed out at 7 years. Will your TV last that long? Also, you will owe much more with a longer term, longer into the term; if you wanted to trade in, you would probably be "upside-down".
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03-19-2008, 03:14 PM
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#5
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Montana Master
Join Date: Sep 2006
Location: Casa Grande
Posts: 5,369
M.O.C. #6333
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Caution, only the RV interest is tax free, even on a combo loan. You must subtract out interest on the TV before you can file....I just went through this with my CPA....
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03-19-2008, 03:57 PM
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#6
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Montana Master
Join Date: Jan 2007
Location: Lobelville
Posts: 2,128
M.O.C. #6650
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We saved and saved and payed cash for our Truck. As for the 5th wheel. Our house was paid for and we took equity out of our house. By doing that we have a 4.75% interest rate. And we write both house and 5th wheel off our taxes. I haven't had Truck or car payments since 1984. I never owned a car or Truck back then I just rented, always had car or Truck payments. However you must have good credit now to get good interest rates. So many bad load in the housing industry. I don't think a person should finance a Truck with the RV, I can't imagine having Truck payments for 15 years. GBY.....
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03-19-2008, 06:37 PM
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#7
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Montana Master
Join Date: Sep 2006
Location: Casa Grande
Posts: 5,369
M.O.C. #6333
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When you finance truck and RV together you do get a longer period to pay it off. The interest rate may be lower than a vehicle loan, maybe not. However, If you want to trade in the TV for a new one, most banks(Iknow ours will), will seperate out the truck so you can sell it. I was considering buying another truck and the Credit Union would seperate out the old truck based on what you got as trade, then roll the new truck into the loan, if you want or you can finance the truck seperately. Of course, the longer you finance, the more you pay in interest. You may, in fact, end up with an upside down payoff. The secret is knowing when to trade the TV and what kind of trade in you are able to get. I will try and work a deal on an annual basis to see what they will give me on trade, then make the deal if it sounds good.
What Delaine is saying about writing off taxes on both stick home and TT is correct as long as you live in the TT two weeks out of the year. At least this is what my CPA guy says......
Hope this helps you somewhat. However, one should always verify this info with a competent tax atty/CPA....
Good luck.
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03-20-2008, 06:32 AM
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#8
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Montana Master
Join Date: Apr 2005
Location: Concord
Posts: 575
M.O.C. #3543
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I think Phil is correct. I would be concerned about getting upside down on the TV with the stretched out payments. And thats not considering the increased interest you will be paying over the longer loan period as well.
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03-20-2008, 04:49 PM
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#9
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Montana Master
Join Date: Jul 2006
Location: Olahoma City
Posts: 1,219
M.O.C. #6054
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Its a 10 year loan. Still chewing the fat on this one. I am going to wait at least a week before I sign on the bottom line.
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03-23-2008, 04:30 PM
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#10
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Montana Master
Join Date: Nov 2002
Location: Oceanside
Posts: 20,028
M.O.C. #20
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I would think if you decide to trade one or the other, a combo loan could be a problem. If, say, you decide to trade for a new truck. I would think they'd figure the current value of the FW and deduct that from the loan balance. The remainder would have to be paid off when selling or trading the truck. With RV depreciation values that could easily leave you upside down on the truck in this scenario.
Maybe if you refinance the entire package with the new truck you'd be ok.
As others said, taxes and interest on the FW are deductible as a second home, or first home for fulltimers with no other home. I would think it would get a bit messy calculating the correct deductions. I don't have anything to hide from the IRS but I'm not anxious to have to justify everything to them, either.
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03-24-2008, 05:46 AM
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#11
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Montana Master
Join Date: Sep 2006
Location: anywhere
Posts: 912
M.O.C. #6260
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Sounds like this is getting into the same realm as the loans so many people are having foreclosures on, owning more that the asset is worth. Also the very valid upside down argument against such a venture.
I have a brother-in-law that took out a home 2nd and bought a new car, he has a great payment but for 30 years, makes it about 10 times what it's worth. That didn't make to much sense either but an otherwise normally sensable man entered into this bad agreement. What you have here is the same deal on a smaller scale.
If you have to ask what to do it indicates you have reservations on the deal and some doubt, if you have this doubt RUN don't walk to the first exit. Things that sound too good to be true, are.
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03-24-2008, 03:53 PM
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#12
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Montana Master
Join Date: Sep 2006
Location: Casa Grande
Posts: 5,369
M.O.C. #6333
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Most financial institutions have a formula for splitting out the truck if need be. It does involve refinancing but that may be a good thing now depending on the interest rate. I am considering a new truck and will probably do this as my truck and trailer are tied in a combo loan. The credit union I use can tell me how much I have to get for the truck on trade or a payoff and you add the new truck in and they refi it all together. Maybe costs a little more on the back end but it does lower your monthly outgo. Whatever works for each person.....
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03-24-2008, 04:53 PM
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#13
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Montana Master
Join Date: Oct 2005
Location: Missiion
Posts: 983
M.O.C. #4766
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I couldn't finance the truck for 10 years, I really think you would be better off doing them seperate Phil. That 300 looks good right now, but four years from now, when you get that new truck itch, there will be problems. This RV/Truck thing is supppose to be worry free and a lot of fun. Don't let them talk you into 10 years of worry. HAVE FUN
John
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03-24-2008, 05:04 PM
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#14
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Montana Master
Join Date: Sep 2006
Location: Casa Grande
Posts: 5,369
M.O.C. #6333
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You are right John, I will just have to look at the numbers IF and When I decide to upgrade.
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03-24-2008, 05:45 PM
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#15
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Montana Master
Join Date: Jul 2006
Location: Olahoma City
Posts: 1,219
M.O.C. #6054
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I think I am going to table the idea for a while. I think I would rather have the option open to put the trailer for sale or the pickup for sale and not have the hastle of a package sale. I only drive my truck about once a week so I know it will last me many years with my limited travel time. By the time I have everything paid off I may be able to take off on a full time adventure which would mean no payments. For now taking care of my parents even though extra cash would help I think I am going to keep them seperate.
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