Question Anyone With An RV Loan Considering A Refinance?

[FL-JOE]

If my RV loan was around 3.25 or 3.5% Neal I would lean toward just making regular payment and investing difference. However, at over 5% plus thinking we will be selling in another couple of years I feel more secure putting more on principle right now. I know the market has been really good (yesterday was a great example) I still can't help but feel a little worried about it.

 

[FL-JOE]

A couple weeks ago we decided to go ahead and do the refi with Bank Of The West (thru Good Sams). By lowering our rate, jacking up the payment, and knocking off several years we felt more confident on getting this thing paid off.

Hickcup number one. They declined my application stating in a letter that my monthly debts were too much for my income! I freaked out and finally got in touch with the actual loan officer yesterday. They had entered my income as annual instead of monthly. Needless to say he apologized all over himself and said he would run it through and get approval within 24 hours.

Hickcup number two. He sent me an email within 24 hours and said the bank requires more than 2.5 times the amount of the loan in some type of equity. In other words I needed to have around $400,000 in the bank, or in the market, or maybe that much equity in a home. A six figure income with a credit score of 829 didn't cut it.

So I guess in order to use Bank Of The West to finance a coach you have to be able to actually pay cash for the darn thing in the first place.

 

[AbdRahim]

Ran into a similar situation on my original financing with several banks. I guess many of them are really afraid of getting stiffed these days.

 

[sheridany]

I am not surprised even with that Fico and income qualification. Banks got hung to dry in 2008 with a bunch of depreciating assets on the books and underwriting policy changed quickly after that even on home lending. You can read the news ($28 Billion set aside by top 3 banks in 2nd quarter) that banks are “nervous nellies” right now.

 

[FL-JOE]

I guess what amazes me the most about the whole thing was that they didn't even give me a chance to slam a chunk down and do a smaller loan amount. From the original app they were aware of what we have in savings so it seemed to me they would have at least suggested borrowing less on the refi.

We can still do about what we wanted to do by just adding to our monthly payment. I suspect these types of banking policies good effect sales of RVs prices at the $250,000 mark and above. The banks will apparently want the customer to have either a home paid off worth $500,000 plus or at least that much in the bank. The couple that might have $50,000 to $100,000 in the market (or bank) and a $100,000 plus annual pension will be out of luck.

 

[AbdRahim]

They did not even inquire about other assets in my case. Nor were they impressed that I paid for the last one in cash. Their loss. The winner is being duels rewarded. The irony is they want recent credit history. Everything all paid off for years today does not seem to cut it.

 

[sheridany]

The truth is banks don’t have a great way to value the RV in cases where they have to repossess
for the purposes of selling it to recoup the loan. Unlike real estate which has very good data to estimate valuation that doesn’t really exist elsewhere that takes into account the depreciation curve. The more assets the borrower has, the better chance they have at getting funded for a loan of course depending on the price the buyer will pay.

 

[FL-JOE]

That all makes sense I guess. I just wish they would have disclosed all of the additional requirements prior to letting us apply. It seems a little shady to dangle a favorable refi rate out there, let you make an initial inquiry with some personal information and then at the end toss in several added on requirements that no one has ever heard of. Why not just state up front "hey, we see you have a 800 plus credit rating and earn more than enough to make the payments, but do you have $500,000 laying around?"

 

[sheridany]

Why not just state up front "hey, we see you have a 800 plus credit rating and earn more than enough to make the payments, but do you have $500,000 laying around?"

I completely agree and they are supposed to be 100% transparent on terms qualifications etc right from the start.

 

[FL-JOE]

Like I said, we can accomplish about what we wanted by tossing extra on the current loan payments. I guess the lesson here is for anyone selling their home and going full time. They might as well go right to Allient Credit Union and apply if seeking a large coach loan rather than waste their time with Bank Of The West right now IMHO.