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I am about to finance a 5th wheel RV and am curious whether it is considered a vehicle or a home. Certainly my eligibility will depend on this...has anyone else experienced this situation?
@Anonymous wrote:I am about to finance a 5th wheel RV and am curious whether it is considered a vehicle or a home. Certainly my eligibility will depend on this...has anyone else experienced this situation?
Considered a vehicle or home by whom? It is both. And why would your eligibility depend on how it's classified? Either you qualify for a loan or you don't, regardless of what type of loan it is.
For licensing purposes, in nearly all states it is considered a vehicle and is subject to vehicle licensing guidelines and requirements.
For tax purposes it is considered a 2nd home IF it includes cooking and toilet facilities, which most trailers/RVs have. The interest one pays on it is tax deductible as a 2nd mortgage.
For insurance purposes, in many states, it is considered personal property, being neither a vehicle or a home. My insurance on my trailer lists it as the year/make/model, but the cost is based on it being personal property and not a vehicle.
As to the type of loan, most lenders will classify it as an RV loan...which it is. RV loans are considered luxury loans, just as boat loans are, and usually have a higher interest rate versus a traditional vehicle loan. When I first got my RV/trailer loan, my FICO scores were mid-700s and I had no problem qualifying for the loan.
Thanks for your response, thom02099, I found it both concise and informative...in other words, you answered pretty much all my questions!
I would be careful about where you finance through. A bank or CU should be fine, but other lenders for a recreational/luxury item could end up being a CFA.
@Glen_M wrote:I would be careful about where you finance through. A bank or CU should be fine, but other lenders for a recreational/luxury item could end up being a CFA.
Yes. Go with a trusted name whenever possible. My credit union offered RV/Trailer loans but got out of that business as have many other credit unions. Look to Good Sam RV loans (www.goodsamrvloans.com ), since they are a major lender and are tied in with Camping World. My loan was originally through Essex Credit, which is a division of Bank of the West, and serviced through them. USBank is also another major player in RV loans.
Trailers are very difficult to assess value and depreciate at a different rate than motor homes. Rates will vary based on the amount financed as well. The more you finance, the lower the rate, generally speaking. You get a better rate financing $40k vs $20K, and the term length will vary. Some lenders won't go below a specific amount to finance, usually $10K.
I do not work for any of these entities nor do I have a vested interest in any of the lenders mentioned.
In 2003 I financed my RV with Wells Fargo. The rate was great at the time, and they were good to deal with. Obviously a well known name. Good luck with the RV.