I don't know how many of you Military folks are working with USAA, but I really got a shocker this afternoon.
This past Feb during the 1st wk of the month, I contacted USAA for the first time in my life, after reading that they only dealt with Vets and current military or their immediate family members. I wanted to buy a RV. In less that 4 hrs from the time I said hello to receptionist I was cleared and approved for up to $67,000. on a certain RV. That afternoon I contacted the man who had the unit and had him fax a copy of front and back of the title, his name, and address and tel # to USAA. The next morning b-4 noon, UPS delivered the check to my home, made out to the owner for the MH. WOW, what a deal, 2.7% apr @ 15 yrs with a payment of $365.00 per month. No problems, zippity do dah, just that easy.
We loaded up the MH and left for south TX. During our stay in TX we were pleased with the MH in every way EXCEPT we didn't have as much room in the 2006 32' MH as we had in our 34' 5th wheel. No space for a Splendide and not enough inside storage. So, we started looking for a 40' DP and found one @ a Camping World that we stopped at to have the MH & Gen serviced. We are on our way home to Bethany, MO and in no hurry, so I was working with the salesman on getting figures right on a 2005 Tiffin Allegro Bus 40TSP. The salesman wanted to run an credit application thru one of his loan companies and I said no I'll go thru USAA. Well I get rather lengthy, and I have said all this to say.
I was shocked when I spoke to the loan officer at USAA. They did not have any problem with us wanting to trade so soon, and explained that it happens often. Then she ask me how we were going to use the New to us RV. I answered just like I did the 1st week of Feb. We will spend 3 months in TX or AZ, and 2 months in NE WY or some where cooler place during the hot summer. SORRY, she says, but we can't even write-up anapplication if you are going to stay away from home that long, DUE to Federal Regulations. I said well what has changed since the 1st wk of Feb., has the law changed or have you folks changed. And her answer to me was that the Bank examiners said that USAA was interpreting the law wrong and that they could not loan to people that use their RV to live in that long. It was considered FT'ing. The loan officer apologized several times and said they would loan me up to $106,500. on a personal note, but the % rate would be 8.99 % for a total of 60 months with a payment of $2210.00 .
I know that something has to be wrong, but I just can't believe this. So, now we are going home and selling S&B and pay for our present MH and if we still choose to trade for a 40 DP, we will do so. And I'm sure that is what's going to happen. Sorry I have taken so much of your time, but maybe you can help me understand this craziness.
Who is it that decides if you RV'ing or FT'ing ? Is fulltiming 6 months and 1 day or 182.5 days, more or less ?
-- Edited by rocknb on Wednesday 8th of April 2015 05:48:28 PM
BiggarView said
06:36 PM Apr 8, 2015
Don't know much about RV financing as yet, but my first questioon would be what Federal regulations... specifically.... are being violated or are preventing the transaction from proceding? Something in the process you described doesn't sound right but I can't put a finger on it. On first blush it sounds like some kind of bait and switch, but I find that hard to go with, so something in the terms seems to be misunderstood... at least by me.
Brian
-- Edited by biggaRView on Wednesday 8th of April 2015 06:38:36 PM
Second Chance said
07:56 PM Apr 8, 2015
I've been with USAA for over 30 years and checked with them regarding an RV loan sometime in late February or early March (we're just in the planning stages). I was told that they wouldn't make the loan for an RV (a fifth wheel in our case) if it was for full-timing. The general manager at our local RV dealership is also retired Army and wasn't surprised. The dealership works with several different lenders who will make loans on RVs for full-time use and have rates competitive with what I could have gotten from USAA. USAA will, however, insure the fifth wheel after we buy it (don't think the same goes for motor homes, though).
rocknb said
08:24 PM Apr 8, 2015
Howdy Howdy biggaRView,
Sept. 23, 2010) -- The new lending laws imposed by Regulation Z Section 226.35 requires banks to escrow property taxes and insurance on any RV or boat that is the borrower's primary residence. Since full-time RVers don't have a "permanent residence," the banks may have difficulty determining what taxes to withhold an in what amount. Many big banks have already stopped lending to full-time RVers.
Just google - (Federal Banking laws pertaining to rv's). from RV Daily Report - RV Industry News
-- Edited by rocknb on Wednesday 8th of April 2015 08:38:16 PM
rocknb said
08:34 PM Apr 8, 2015
Howdy Howdy, Second Chance,
Yes, USAA will insure MH's but it is actually through Progressive Ins. I was transferred by USAA to a Progressive agent who quoted me a figure. I checked with my Independent Ins agent which also writes for Progressive and she got me the same policy for $200. a yr less. Now that's another odd one to figure out ????
BiggarView said
07:40 AM Apr 9, 2015
Just looked at Reg "Z". unfortunately, the way the law is written, lenders have an "out" to not provide lending if they wish for RV loans. Still, I know there are "creative" ways to finance/buy your rig at competive rates using some more unconventional but legal methods. They also involve financial risk, and since we are talking about your future home, you should hestitate before employing them.
Personally.... financing a depreciating asset is, typically, not a sound plan unless you have sufficient back up resources earning a substantial return. The old axiom... borrow for appreciating assets and pay cash for depreciating ones, for the most part, is sage advice. I can hear Dave Ramsey falling out of bed (on the financing part).
Larry, I'd look into alternative arrangements to pay for the rig. Cash would be my first choice.
If you are going to use proceeds from the S&B to pay for the rig, a personal loan (if you can swing the payments until the house sells) is reasonable. Do not borrow from 401k's...ever (if you have them) as you will be taxed twice on the borrowed money. Once when you use after tax dollars to repay it and then again when you finally withdraw the funds after you retire.
Perhaps, if you can do it, maybe open a margin brokerage account and put money into a safe non volatile investment then borrow margin money to finance the rig and make payments back to the account. (see the caveat above) The margin rate will be lower than 8.99% (50K to 100K loans are typically around 7% currently, margin interest is tax deductible against long term cap gains & there will be some somewhat tricky tax prep paperwork) and you can pay back at your leisure (upto a point and always subject to brokerage margin rules) It's not a perfect solution, but it might work for your situation. Just saying that there are options out there for you, so check around or seek advice from a CFP.
FWIW, Brian
TXRVr said
09:14 AM Apr 9, 2015
As a long term member of USAA, I have noticed that the company has steadily declined from the way it use to be with respect to service and support. It is not unusual to get conflicting answers from reps when the issue is not simple and easy. You will always get a quick acknowledgement of a problem, but further communications and solutions are not easy to come by. When one is referred to an affiliated company for a product like motor home or motorcycle insurance and travel services, you can usually find a cheaper rate by dealing directly with that company. USAA has competition from Pentagon Federal, Navy Federal, and Armed Forces Benefit Association. Those are worth looking into.
rocknb said
09:19 AM Apr 9, 2015
Thanks biggaRView,
Great Info, but I'm just gonna wait till the sale of the s&b and pay cash. A much better plan I think. Thanks again
rocknb said
10:22 PM Apr 9, 2015
Thank-You TXRVr,
That's good information to know. But, I still think I'll wait till I sell the Ranchette and pay cash. It seems cash speaks a lot louder than loans.
TRAILERKING said
11:20 PM Apr 9, 2015
biggaRView wrote:
... financing a depreciating asset is, typically, not a sound plan
FWIW, Brian
Yes that's the thing with Rv's and Auto's ........They don't hold their value like a house sitting on a foundation.
TRAILERKING said
11:23 PM Apr 9, 2015
rocknb wrote:
Thanks biggaRView,
Great Info, but I'm just gonna wait till the sale of the s&b and pay cash. A much better plan I think. Thanks again
Even if have the money to pay CASH for it. It is still good to take a short term loan and pay it off FAST. You keep up a great credit rating history for the future. If pay cash it does not build up your credit rating score.
BiggarView said
06:25 AM Apr 10, 2015
TRAILERKING wrote:
rocknb wrote:
Thanks biggaRView,
Great Info, but I'm just gonna wait till the sale of the s&b and pay cash. A much better plan I think. Thanks again
Even if have the money to pay CASH for it. It is still good to take a short term loan and pay it off FAST. You keep up a great credit rating history for the future. If pay cash it does not build up your credit rating score.
Don't want to start a debate on credit scores, but don't be lulled into thinking that it's the "be all/end all" to have a great credit score. Many people function just fine with no credit score. There are many lenders out there that know how to evaluate credit worthiness using "manual" methods instead of some nebulous algorithm that large bank lending personnel use to evaluate risk. Their job is to lend money, and the big banks don't have time to really look at the borrower one on one. Credit scores rate your ability to repay a debt and nothing else. They are neither accurate or reliable, but the banks and credit scoring agencies have done a successful job of getting people to worship at the Credit Score altar. Many millionaires have no credit score and would be turned down if using conventional banking operations that Joe Sixpack uses. If you use credit cards to purchase items and pay the bill off, you will maintain sufficient credit score for just about any purchase requiring credit. This would include 99% of the consuming public.
Banks also frown on CC users who pay off their bill in full every month... they don't make any money off them thus the reason for annual fees by some banks or card issuers. Banks call these types of CC users "deadbeats". They will find ways, using your "pay it off in full" pattern of behavior to lower your borrowing limits until you get fed up and leave them. Then when you need credit after you've closed the account, they'll be more than happy to open a new one for you but with higher fees and interest rates. Remember, it's their game and they make the rules so it's rigged in favor of them from the get go.
This not a "hate the banks" rant, just a caution. Another bit of sage advice, when you borrow you become a slave to the lender... a bit counter-intuitive to an RV Dream of freedom. With free will, you get to decide for how long and how heavy that burden will be.
Brian
-- Edited by biggaRView on Friday 10th of April 2015 06:34:09 AM
el Rojo and Pam said
07:45 AM Apr 10, 2015
Cash is King!
travlingman said
08:03 AM Apr 10, 2015
Since you haven't sold your house yet, I would tell USAA that you are going to use your new rig to travel some and see the sites, not give the length of time. With your permanent address now, you could get the loan. With the low loan rate you are getting, I can't see why you would want to pay cash. It is easy to find investments for your money that would pay more than the interest on the loan and you would also have that interest as a tax deduction. When you sell your house, if they start asking for a permanent address instead of a PO Box, use one of your kids or other family member who doesn't mind.
TRAILERKING said
08:03 AM Apr 10, 2015
biggaRView wrote:
Banks also frown on CC users who pay off their bill in full every month... they don't make any money off them thus the reason for annual fees by some banks or card issuers. Banks call these types of CC users "deadbeats". They will find ways, using your "pay it off in full" pattern of behavior to lower your borrowing limits until you get fed up and leave them. Then when you need credit after you've closed the account, they'll be more than happy to open a new one for you but with higher fees and interest rates. Remember, it's their game and they make the rules so it's rigged in favor of them from the get go.
Brian
-- Edited by biggaRView on Friday 10th of April 2015 06:34:09 AM
Yes there is the credit card "Pay Patterns" that can help your credit score without loan history.........So I guess "Cash is KING".
I don't know how many of you Military folks are working with USAA, but I really got a shocker this afternoon.
This past Feb during the 1st wk of the month, I contacted USAA for the first time in my life, after reading that they only dealt with Vets and current military or their immediate family members. I wanted to buy a RV. In less that 4 hrs from the time I said hello to receptionist I was cleared and approved for up to $67,000. on a certain RV. That afternoon I contacted the man who had the unit and had him fax a copy of front and back of the title, his name, and address and tel # to USAA. The next morning b-4 noon, UPS delivered the check to my home, made out to the owner for the MH. WOW, what a deal, 2.7% apr @ 15 yrs with a payment of $365.00 per month. No problems, zippity do dah, just that easy.
We loaded up the MH and left for south TX. During our stay in TX we were pleased with the MH in every way EXCEPT we didn't have as much room in the 2006 32' MH as we had in our 34' 5th wheel. No space for a Splendide and not enough inside storage. So, we started looking for a 40' DP and found one @ a Camping World that we stopped at to have the MH & Gen serviced. We are on our way home to Bethany, MO and in no hurry, so I was working with the salesman on getting figures right on a 2005 Tiffin Allegro Bus 40TSP. The salesman wanted to run an credit application thru one of his loan companies and I said no I'll go thru USAA. Well I get rather lengthy, and I have said all this to say.
I was shocked when I spoke to the loan officer at USAA. They did not have any problem with us wanting to trade so soon, and explained that it happens often. Then she ask me how we were going to use the New to us RV. I answered just like I did the 1st week of Feb. We will spend 3 months in TX or AZ, and 2 months in NE WY or some where cooler place during the hot summer. SORRY, she says, but we can't even write-up an application if you are going to stay away from home that long, DUE to Federal Regulations. I said well what has changed since the 1st wk of Feb., has the law changed or have you folks changed. And her answer to me was that the Bank examiners said that USAA was interpreting the law wrong and that they could not loan to people that use their RV to live in that long. It was considered FT'ing. The loan officer apologized several times and said they would loan me up to $106,500. on a personal note, but the % rate would be 8.99 % for a total of 60 months with a payment of $2210.00 .
I know that something has to be wrong, but I just can't believe this. So, now we are going home and selling S&B and pay for our present MH and if we still choose to trade for a 40 DP, we will do so. And I'm sure that is what's going to happen. Sorry I have taken so much of your time, but maybe you can help me understand this craziness.
Who is it that decides if you RV'ing or FT'ing ? Is fulltiming 6 months and 1 day or 182.5 days, more or less ?
-- Edited by rocknb on Wednesday 8th of April 2015 05:48:28 PM
Don't know much about RV financing as yet, but my first questioon would be what Federal regulations... specifically.... are being violated or are preventing the transaction from proceding? Something in the process you described doesn't sound right but I can't put a finger on it. On first blush it sounds like some kind of bait and switch, but I find that hard to go with, so something in the terms seems to be misunderstood... at least by me.
Brian
-- Edited by biggaRView on Wednesday 8th of April 2015 06:38:36 PM
Howdy Howdy biggaRView,
Sept. 23, 2010) -- The new lending laws imposed by Regulation Z Section 226.35 requires banks to escrow property taxes and insurance on any RV or boat that is the borrower's primary residence. Since full-time RVers don't have a "permanent residence," the banks may have difficulty determining what taxes to withhold an in what amount. Many big banks have already stopped lending to full-time RVers.
Just google - (Federal Banking laws pertaining to rv's). from RV Daily Report - RV Industry News
-- Edited by rocknb on Wednesday 8th of April 2015 08:38:16 PM
Howdy Howdy, Second Chance,
Yes, USAA will insure MH's but it is actually through Progressive Ins. I was transferred by USAA to a Progressive agent who quoted me a figure. I checked with my Independent Ins agent which also writes for Progressive and she got me the same policy for $200. a yr less. Now that's another odd one to figure out ????
Just looked at Reg "Z". unfortunately, the way the law is written, lenders have an "out" to not provide lending if they wish for RV loans
. Still, I know there are "creative" ways to finance/buy your rig at competive rates using some more unconventional but legal methods. They also involve financial risk, and since we are talking about your future home, you should hestitate before employing them.
Personally.... financing a depreciating asset is, typically, not a sound plan unless you have sufficient back up resources earning a substantial return. The old axiom... borrow for appreciating assets and pay cash for depreciating ones, for the most part, is sage advice. I can hear Dave Ramsey falling out of bed (on the financing part).
Larry, I'd look into alternative arrangements to pay for the rig. Cash would be my first choice.
If you are going to use proceeds from the S&B to pay for the rig, a personal loan (if you can swing the payments until the house sells) is reasonable. Do not borrow from 401k's...ever (if you have them) as you will be taxed twice on the borrowed money. Once when you use after tax dollars to repay it and then again when you finally withdraw the funds after you retire.
Perhaps, if you can do it, maybe open a margin brokerage account and put money into a safe non volatile investment then borrow margin money to finance the rig and make payments back to the account. (see the caveat above) The margin rate will be lower than 8.99% (50K to 100K loans are typically around 7% currently, margin interest is tax deductible against long term cap gains & there will be some somewhat tricky tax prep paperwork) and you can pay back at your leisure (upto a point and always subject to brokerage margin rules) It's not a perfect solution, but it might work for your situation. Just saying that there are options out there for you, so check around or seek advice from a CFP.
FWIW, Brian
As a long term member of USAA, I have noticed that the company has steadily declined from the way it use to be with respect to service and support. It is not unusual to get conflicting answers from reps when the issue is not simple and easy. You will always get a quick acknowledgement of a problem, but further communications and solutions are not easy to come by. When one is referred to an affiliated company for a product like motor home or motorcycle insurance and travel services, you can usually find a cheaper rate by dealing directly with that company. USAA has competition from Pentagon Federal, Navy Federal, and Armed Forces Benefit Association. Those are worth looking into.
Thanks biggaRView,
Great Info, but I'm just gonna wait till the sale of the s&b and pay cash. A much better plan I think. Thanks again
Thank-You TXRVr,
That's good information to know. But, I still think I'll wait till I sell the Ranchette and pay cash. It seems cash speaks a lot louder than loans.
Yes that's the thing with Rv's and Auto's ........They don't hold their value like a house sitting on a foundation.
Even if have the money to pay CASH for it. It is still good to take a short term loan and pay it off FAST. You keep up a great credit rating history for the future. If pay cash it does not build up your credit rating score.
Don't want to start a debate on credit scores, but don't be lulled into thinking that it's the "be all/end all" to have a great credit score. Many people function just fine with no credit score. There are many lenders out there that know how to evaluate credit worthiness using "manual" methods instead of some nebulous algorithm that large bank lending personnel use to evaluate risk. Their job is to lend money, and the big banks don't have time to really look at the borrower one on one. Credit scores rate your ability to repay a debt and nothing else. They are neither accurate or reliable, but the banks and credit scoring agencies have done a successful job of getting people to worship at the Credit Score altar. Many millionaires have no credit score and would be turned down if using conventional banking operations that Joe Sixpack uses. If you use credit cards to purchase items and pay the bill off, you will maintain sufficient credit score for just about any purchase requiring credit. This would include 99% of the consuming public.
Banks also frown on CC users who pay off their bill in full every month... they don't make any money off them thus the reason for annual fees by some banks or card issuers. Banks call these types of CC users "deadbeats". They will find ways, using your "pay it off in full" pattern of behavior to lower your borrowing limits until you get fed up and leave them. Then when you need credit after you've closed the account, they'll be more than happy to open a new one for you but with higher fees and interest rates. Remember, it's their game and they make the rules so it's rigged in favor of them from the get go.
This not a "hate the banks" rant, just a caution. Another bit of sage advice, when you borrow you become a slave to the lender... a bit counter-intuitive to an RV Dream of freedom. With free will, you get to decide for how long and how heavy that burden will be.
Brian
-- Edited by biggaRView on Friday 10th of April 2015 06:34:09 AM
Yes there is the credit card "Pay Patterns" that can help your credit score without loan history.........So I guess "Cash is KING".
yep