Mortgaging a RV Like a Home

RVs are a vacation homes on wheels. What if you could finance a RV like a home the way you do in the burbs?

Rooftop Lounge the Absolute in Luxury 

Have you been to a RV dealer lately? For an easy $3.1 million you can own the super sharp EleMMent Palazzo. It’s cool beyond belief. The six-cylinder engine motors along at up to 93 km/h. As if the rain shower and towel dryer aren’t fancy enough for you, the wine fridge and two 42-inch LED TVs are icing on the cake. Upstairs, you can listen to audio under the stars in the sky lounge with retractable roof.

Bigger Than a Bungalow

Men in Black actor Will Smith and America’a Got Talent executive producer Simon Cowell are hauling some big rigs. Smith’s The Heat has 111.5 square metres with 14 widescreen TVS and room for 30 guests on the decktop. It came in at a hefty $2.5 million. Cowell packed a two bed, two bath retreat with kitchen, office and video hookups into a $2 million mobile pad. 

The Biebermobile

Ontario’s most infamous pop star has an ice cream station, leather couches and plasma TVs in his luxury tour bus. Bieber believers know the 26-year-old pop star made his name on Youtube after placing second in a Stratford singing competition at 12. The London native was performing with Usher a year later.

RVs for Real Ontarians 

You may have something less “bling-ey” in mind. Fabulosity for the average RV buyer comes in a 2021 Forest River Sunseeker for $113,000 with that 25% discount (a modest $404 biweekly). How about a 2018 Coachman Pursuit with slideouts and outdoor kitchen when grill for $108,000? Yes, you can buy a used a RV and finance it. 

How Much You’ll Pay

A $50,000 RV loan with 20% down and 5% interest over five years would cost you $5,290.96 in interest, at $754.85 a month. With storage, gas, maintenance, camping fees and all those other little expenses, it all adds up. Chances are you won’t find a new RV for $50,000, so be prepared to seriously up your budget or buy a used motor home.

Freedom to Wander and a Mortgage   

You know RVs as a cheap way to travel. Your banker or credit union sees your new rig as collateral, just like your car or SUV. Financing options for RVs have gotten a lot better. Lenders can give you the same terms as a car or SUV loan, with up to eight-year terms. You can even use a home owner line of equity or personal credit line to buy a RV valued at up to $50,000. Now some banks and credit unions will also let you take up to 20  years to pay a RV loan, with weekly, biweekly or monthly payments. Your loan is amortized, just like a mortgage. 

Amortizing a RV or Mobile Home Loan

When RV loans are amortized, you pay the interest first, then principal. As you get closer to paying off your loan, more of your payment goes to the amount you borrowed itself. Since your lender makes money off the interest, the longer a loan takes to pay, the more interest they make. And the more you shell out. 

Fixing the Loan Term

As with homes, most RV owners choose a five-year fixed term loan. That means your payment will be the same for the whole five years. At the end of the term, if your credit is good, you can renew the loan for another five and so on until the loan is paid. Adjustable rate loans are available but only if you don’t mind having interests rate dip up or down with financial markets.

Reduce Interest with Extra Payments

Making extra payments speeds up how quickly you pay the loan. Annual prepayments take years off the amortization. You owe less interest and chip away at the original amount you borrowed (the principal) by making a lump sum payment. Finding room in your budget for extra monthly payments works the same way. The additional investment goes to principal only, putting money back in your pocket sooner.  

Financing Options for Your RV

Options and more options. What to do? RV lenders suggest going through the dealership if your credit is fine and you have a downpayment. Dealerships want your business and are keen to negotiate. That could keep your interest rate lower and your loan in line with what you want to pay. Banks and other lenders want your business too, but may be more cautious in qualifying you for a loan. A good credit score comes in handy and you can always use the equity in your home or get a co-signer. Your road warrior isn’t quite yours until it’s paid for. Fun in the sun has its price. 

Finalize Mortgage Documents by Video Call

Close the financing deal on your RV. Axess Law Ontario real estate lawyers review your legal documents and finalize your mortgage arrangements. Arrange a video call and e-signing appointment anywhere in Ontario by dialing toll free to 1-877-552-9377 or 647-479-0118 in Toronto or using our online booking form. Licensed real estate lawyers can meet with you in person at our Toronto, Scarborough, Vaughan, Etobicoke, Ottawa, Mississauga Winston Churchill or Mississauga Heartland law offices.  

Click here to learn more about Axess Law’s real estate law services.