types of loans? Full timing

[Branderson]

Hey gang,

Is it true the only real type of loan one can get to purchase a bus is a personal loan?  Also, would you say that the majority of coach dealerships don't finance?

The reason that I ask is that I'm looking down the road 5-7yrs to go full time and I'm afraid that my 74 MC is too cramped for my wife, fur babies (2) and I.  I will be looking for a bus with slide outs....most likely a Newell. 

If/when this becomes more of a reality, I will have plenty of questions and asking for advice especially dealing with selling home and how to cope with getting rid of all the stuff I don't need. For those that are full timers in a bus with no slide outs, did you go through a period where you felt cramped and how did you cope or deal with it? 

-Brad

[Dreadnought]

I've gone from a 3000 sq ft house and 9 acres to 280 odd sq ft MC5.

I don't really feel cramped- but I'm single again (yay!).

I miss having a bar in my basement and storage for all of my cars and a dedicated library room.

I will get there again in time.

I had to move all my vehicles into storage. I may even sell a couple (!).

I may get a fur baby.


I don't do loans if I can help it.

Personally- I don't understand the perspective of perusing freedom and being a full timer AND then going heavily into debt to finance that. The latter seems to contradict the former ethos. But that's my personal perspective and I realize it doesn't help you.

[Geoff]

I agree-- don't go into debt to full time.  I have heard of people who sold everything they had and started full timing and after a couple of years they want to go back to a house and cannot afford one.  As much as I love my bus, I like to drive it more than live in it although it is big enough and comfortable enough to live in.  My three Jack Russells like the house and big back yard and camping with them is a big hassle with leashes.  I like my two-bus sized 2,000 sq ft shop.., my two acres, and nice 2600 sq ft house-- all paid for. When I hit the road it will be debt free and have enough money to travel and pay the taxes on the house.

--Geoff



I'm not a full-timer, but I heard enough from the bus boards for the last twenty years.

[Branderson]

Thanks guys,

I hate debt!!  I don't intend to go into much debt if at all.  I think the most I would go in is a 25k personal loan but if I plan things correctly, I won't need to do it.  I was just wanting to make sure that normally loans are not given and there is no financing.  Although it's an upgrade to what I have, I don't plan on paying more than 110-130k range. 

It does give me a little anxiety thinking about selling home and liquidating most of my stuff.  I imagine I would keep storage for some of the stuff that I just can't pull the trigger on selling.  One thing is that if I sold my house, and we went down to 1 vehicle, that would sure save a lot of monthly $.  Hell, getting rid of direct tv would save me a ton   

I could do that all right now and we could just live in the bus we have but my biggest concern would be after doing all that and then end up hating it b/c of "cabin fever".  That's why I think the slides is a must if I was going to make it a reality. 

p.s. I'm also a little concerned that I would end up drinking my face off everyday.  Is there a way to deprogram me from pounding beer when I'm in the bus? haha

[bevans6]

There are probably a number of ways to finance the purchase of a motor coach.  I'm agnostic on the whole "good loan/bad loan" thing, a loan is nothing but a tool.  Like a hammer, it can do something useful, or you can hurt yourself if you drop it on your foot.

Most loans are either personal or commercial.  If you have a business, you might purchase your coach as part of the business and have a commercial loan for it.  Presumably if you have a business you're familiar with normal terms for commercial borrowing.

Personal loans are what most people use to buy things.  A broad separation is between mortgages and loans.  Sometimes mortgages are not even considered loans, they are on real property and the lender retains ownership of the property until the mortgage is repaid, at which point only does ownership transfer to the borrower.  In other cases the lender has a lien on the property and the borrower cannot sell the property until the lien is eliminated by paying the mortgage in full.  In both cases, if there is default ownership transfers to the lender.  Mortgages are almost always on real estate, so called "real property"

A "personal loan" is usually considered to be a loan that is unsecured, or secured against non-real property (a car, a motor coach, etc).  Not much real different to a mortgage in that if a secured loan is defaulted, the lender can seize the security, but usually big differences in interest rate, term, amortization period, etc.  It would be unusual to have a car or truck loan longer than the useful life of the vehicle, say 8 years, and the interest rate is usually a lot higher than a mortgage.  There are people writing RV loans with good interest rates and very long amortizations on quality coaches, so when you get there, shop hard for the loan.

The best way to deal with a loan is to not need one, that gives you leverage.  You could, for example, borrow at 3% over a term and lay that off with a matching investment to secure the loan, with the investment making 6%.  Another way is to leverage property you already own.  In the case of going full-timing, own a house that is fully or substantially paid off, take out a line of credit to buy the motor coach, and pay for it by renting out the house while you drive around in the coach.  Do it right and you full-time for free, or even make a profit (ignoring depreciation).  A lot of full-timers get into it by selling the house, paying for the motor-coach, and praying for the future (houses by and large appreciate and are worth more in the future and have foreseeable maintenance requirements, coaches by and large depreciate, are worth less in the future, and break down expensively on a semi-regular basis).   The last way is to just buy the coach and pay for it, lump sum or on the never-never, and that monthly payment is the cost of doing business for that lifestyle.

I've been debt free for decades, it is a substantial (almost over-riding) part of my lifestyle.  I got to be debt free by borrowing, leveraging income and assets, paying things off, and so on, just like a good little camper, but damn if it didn't work.  I recently had to buy a new car.  My wife's car had a sensor in the transmission fail, and it would have cost 6 times what the trade-in value of the car was to get it fixed, so I walked away from it.  She wanted a manual transmission for old times sake, so we bought a 2017 Ford Mustang fastback with a six speed, all the local kids are jealous.  I fully planned to just pay for it, but they said "we have a 60 month zero percent loan financing option" so my money stayed in the investment fund making 18% last year (fluke, but it happened) and I got me a nice bright blue Mustang with silver stripes, a six speed with an actual clutch, and a happy wife along with $30K in 0% consumer dept...  It's like they gave me a free car!

[Branderson]

There are probably a number of ways to finance the purchase of a motor coach.  I'm agnostic on the whole "good loan/bad loan" thing, a loan is nothing but a tool.  Like a hammer, it can do something useful, or you can hurt yourself if you drop it on your foot.

Most loans are either personal or commercial.  If you have a business, you might purchase your coach as part of the business and have a commercial loan for it.  Presumably if you have a business you're familiar with normal terms for commercial borrowing.

Personal loans are what most people use to buy things.  A broad separation is between mortgages and loans.  Sometimes mortgages are not even considered loans, they are on real property and the lender retains ownership of the property until the mortgage is repaid, at which point only does ownership transfer to the borrower.  In other cases the lender has a lien on the property and the borrower cannot sell the property until the lien is eliminated by paying the mortgage in full.  In both cases, if there is default ownership transfers to the lender.  Mortgages are almost always on real estate, so called "real property"

A "personal loan" is usually considered to be a loan that is unsecured, or secured against non-real property (a car, a motor coach, etc).  Not much real different to a mortgage in that if a secured loan is defaulted, the lender can seize the security, but usually big differences in interest rate, term, amortization period, etc.  It would be unusual to have a car or truck loan longer than the useful life of the vehicle, say 8 years, and the interest rate is usually a lot higher than a mortgage.  There are people writing RV loans with good interest rates and very long amortizations on quality coaches, so when you get there, shop hard for the loan.

The best way to deal with a loan is to not need one, that gives you leverage.  You could, for example, borrow at 3% over a term and lay that off with a matching investment to secure the loan, with the investment making 6%.  Another way is to leverage property you already own.  In the case of going full-timing, own a house that is fully or substantially paid off, take out a line of credit to buy the motor coach, and pay for it by renting out the house while you drive around in the coach.  Do it right and you full-time for free, or even make a profit (ignoring depreciation).  A lot of full-timers get into it by selling the house, paying for the motor-coach, and praying for the future (houses by and large appreciate and are worth more in the future and have foreseeable maintenance requirements, coaches by and large depreciate, are worth less in the future, and break down expensively on a semi-regular basis).   The last way is to just buy the coach and pay for it, lump sum or on the never-never, and that monthly payment is the cost of doing business for that lifestyle.

I've been debt free for decades, it is a substantial (almost over-riding) part of my lifestyle.  I got to be debt free by borrowing, leveraging income and assets, paying things off, and so on, just like a good little camper, but damn if it didn't work.  I recently had to buy a new car.  My wife's car had a sensor in the transmission fail, and it would have cost 6 times what the trade-in value of the car was to get it fixed, so I walked away from it.  She wanted a manual transmission for old times sake, so we bought a 2017 Ford Mustang fastback with a six speed, all the local kids are jealous.  I fully planned to just pay for it, but they said "we have a 60 month zero percent loan financing option" so my money stayed in the investment fund making 18% last year (fluke, but it happened) and I got me a nice bright blue Mustang with silver stripes, a six speed with an actual clutch, and a happy wife along with $30K in 0% consumer dept...  It's like they gave me a free car!

Thanks for taking the time to write that especially about the loans. It's much appreciated.  I just bought the house new in 2015 so I think I will most likely just sell it.  One thing that I forgot which you jogged my memory is that I own land in FL so maybe there's some $ possibilities there.  I think the best thing I got going for me is that I'm retired Army so there's ret pay coming in no matter what which I'm very thankful for. 

I think my current plan is to save towards the price for the next coach I want.  I have some time (unless I get completely sick of my current job and tell everyone to pound sand) I'm not really sure what my current bus would get when sold and maybe by the time of selling the house I can get some back with that....


Congrats on the car.  I like to hear winning stories since it seems like that rarely happens. 

btw, I reached out to my banker about personal loans.  She said I could get a 10yr 25k loan with 2% payments...if I did my math right, that's paying back 60k!!! that's crazy

[luvrbus]

7 years down the road you could have what ever you wanted paid for, if buy from a individual you will be responsible for getting the loan.
A good thing from buying from a dealer they will have a outlet for loans.Back before 2000- 2008 you could sell the house the interest would meet the payments with a little left overs.
Now they are financing up to 20 years on RV's.
I have a friend that bought a 2010 Prevost for over a million bucks it was not a problem for him to write a check for the full amount.
After giving it much thought he had his financed because he could double his money by taking the 15 year loan low interest rate on his bus. He laughs and said if the doom days come he still has his money and they can have the bus back or if he dies the insurance co will pay the bus off and Shirley can sell the bus.

Financing is not all that bad if you get the right deal, real estate sucks you never own the places you just lease it from some government agency I get sick of paying property taxes on properties we own that has been free and clear for 35 years.Do your home work financing is not all bad, now credit cards are a different ball game IMO      

[Dreadnought]

She wanted a manual transmission for old times sake, so we bought a 2017 Ford Mustang fastback with a six speed

I thought you were into Lucas Prince of darkness and on a first name basis with your recovery service :-D

[bevans6]

You are no doubt referring to the 1961 MG midget, the 1964 Mini Countryman, the 1979 MGB, or perhaps the 1959 BMW R26.  I can't imagine what you mean by "recovery service"...    

[flynbanjo]

At the Tampa RV show, I came across an internet bank that will finance coaches as old as 15 years.  The interest rate seemed reasonable but there are a couple of catches.  1. Must not be used as a full time residence. 2. It must have less than 200000 miles on the coach.  I guess I wouldn't tell them about the plan to full time in it.

[bevans6]

I don't understand the "2% payments" thing and $60K.  I did a loan calc at 7.5% interest, and I got $25K principle on 2% payments ($500 per month initial, declining over term, minimum payment) costing just over $9,200, for total payments of $29,450 and a residual balance of $4,746.  With a "percentage" payment you never actually pay off the loan, there is always a residual.  You could do better than 7.5%, probably.

[bigred]

Older Newells can be bought for a very good price usually with low miles .This way you can probably pay cash for it .Check RVT .They have one advertised on there for well under a 100 grand!! I don't mean this to be a s a comment ,but as I have always said if you need a 45ft coach with four slide outs to be comfortable ,you need to stay home in your stick built house!!!! LOL

[luvrbus]

Slides do open 1 up I have never been a fan of slides till recently,I still don't care for the bed room slides or the narrow 12 inch wide slide some us in the living area ,but I do like the Foretravel slides with no outside flanges

[Branderson]

Im pretty torn on the slides issue.  Part of me doesn't want to ever deal with the problems that come with slides.  It seems like there are always issues.  The other part of me loves the room that comes with it.  I also don't care as much with the bedroom (although if it fits a king bed, then awesome) but I really do like the extra room in the living room. 

If I was by myself, I would be totally fine with my no slides 40ftr but as it is, I can tell I would want more. 

[luvrbus]

Good slides don't give much of a problem,the cheap mechanisms like the RV industry uses are problems.The only slides I would have would be the HWH hydraulic system $$$$