Assumable RV Loan

[Jaimberlyn]

Happy Tuesday Everyone! I was curious if anyone knew of a loan company that offers assumable RV loans? We have our RV for sale and was approached by an interested buyer, but they wanted to know if the loan was assumable. Unfortunately, our loan is not.

[Cabinfever97]

Even if you had a assumable loan, my thought is the potential buyers credit rating may be the larger issue. Your buyer for instance, why did they not just get their own loan?

[formerFR]

no, most any loan is not 'assumable' since the lender made the original loan based on your situation, your credit, your downpayment, and your 'signature' on the contract, not someone elses.

having said that, it's also possible you might 'do' this on your own, meaning that the buyer agrees to continue paying the loan until it is paid in full. While you will technically retain the 'true' ownership until the lender sends you the 'paid in full' TITLE, the new owner will be paying the monthly payments, since it's doubtful the lender cares 'who' pays it, as long as it gets paid.
If you have a well written and executed 'assumption' contract between you and the buyer, then both of you are protected. They are protected in that they are assuming the payments, making the payments, and will then receive the TITLE, signed by you, when the lender is satisfied. YOU will be protected, your credit specifically, since they will now have the responsibility of making the payments, and on time, and yet you will still have true 'title' in case they don't, with the rights to 'repo' the unit, worse case scenario.

In essence, you are acting like a bank. You are taking the risk.

You would also have to demand that they carry FULL COVERAGE insurance, just like the bank requires you to, with the lender listed as the Loss Payee, which they require. It's doubtful they would care 'who' insures it, as long as it's insured. But have them list YOU on the policy, also as a Loss Payee since you still have a vested interest in making sure the unit is repaired if in an accident, and also so that they don't receive the insurance funds after an accident and then decide to run with it. You get the picture.

It might be the 'last' choice in order to make a deal, but if it's a local family, and you have a way to 'keep an eye' on the RV while the payments are being made, then it could work.
They could even pay YOU each month, including the cost of insurance, and have you change nothing about your current deal with your lender. Similar to you 'renting' the unit until the last payment is made : )

[MR.M]

Originally Posted by formerFR

no, most any loan is not 'assumable' since the lender made the original loan based on your situation, your credit, your downpayment, and your 'signature' on the contract, not someone elses.

having said that, it's also possible you might 'do' this on your own, meaning that the buyer agrees to continue paying the loan until it is paid in full. While you will technically retain the 'true' ownership until the lender sends you the 'paid in full' TITLE, the new owner will be paying the monthly payments, since it's doubtful the lender cares 'who' pays it, as long as it gets paid.
If you have a well written and executed 'assumption' contract between you and the buyer, then both of you are protected. They are protected in that they are assuming the payments, making the payments, and will then receive the TITLE, signed by you, when the lender is satisfied. YOU will be protected, your credit specifically, since they will now have the responsibility of making the payments, and on time, and yet you will still have true 'title' in case they don't, with the rights to 'repo' the unit, worse case scenario.

In essence, you are acting like a bank. You are taking the risk.

You would also have to demand that they carry FULL COVERAGE insurance, just like the bank requires you to, with the lender listed as the Loss Payee, which they require. It's doubtful they would care 'who' insures it, as long as it's insured. But have them list YOU on the policy, also as a Loss Payee since you still have a vested interest in making sure the unit is repaired if in an accident, and also so that they don't receive the insurance funds after an accident and then decide to run with it. You get the picture.

It might be the 'last' choice in order to make a deal, but if it's a local family, and you have a way to 'keep an eye' on the RV while the payments are being made, then it could work.
They could even pay YOU each month, including the cost of insurance, and have you change nothing about your current deal with your lender. Similar to you 'renting' the unit until the last payment is made : )

it would be very brave to do what you suggest . maybe a family member , but a stranger no way . you open the door for all kinds of headaches . once their gone with your rv . you don't know where . they could driver off never make a payment . doesn't matter what papers they sign with you . then it's your ass on the ropes for payments , while your rv is off to who knows where . it could take yrs to find them are you may never . even if you do find them then it's courts and etc etc that would be a big mess . never become a bank unless you know the person personally even family can be a pain

[Iwritecode]

Originally Posted by Cabinfever97

why did they not just get their own loan?

^^^ This.

[formerFR]

yep, it's certainly a risk, but if you are selling your coach anyway, the maintenance and how they take 'care' of it is much less concerning, though them continuing to PAY for it is primary. Banks can't determine or demand that customers take care of their RVs, either...they just have more 'clout' with credit scoring and judgements to be able to manage the 'situation', though even then they get caught with a bad RV from time to time when they have to repo it.

Certainly, if the potential buyer can 'NOT' get a loan, it's usually a good sign that YOU should also not provide a loan... but a 'rent to own' might be a similar option, though then you'd be acting as a 'land lord' and be responsible for the maintenance and repairs, etc. unless you exclude that from the contract.

None of these are 'great' ideas, just ideas... they have worked for some, and have failed for many, banks included.


I rode by my local credit union the other day, and called them when I noticed several cars in the parking lot with no license plates(looked like the must be repos)... I asked if I could look at several and make an offer on one - they quickly shot down that idea as they stated that whenever they take in repos, they send them to an auction, versus dealing with local 'buyers'.
I guess it's too much 'work' for them to make more money on a local sale, and so they take the 'easy' route and just send them to auction where they'll certainly get much less.

Oh well.

[Cabinfever97]

FormerFR ... Our CU takes repos to a auction an hour away. I asked why they didn't sell local and make more money. The answer I received was they wanted the vehicles out of the area. No explanation for why.

[JohnD10]

Originally Posted by Cabinfever97

FormerFR ... Our CU takes repos to a auction an hour away. I asked why they didn't sell local and make more money. The answer I received was they wanted the vehicles out of the area. No explanation for why.

I'm guessing that they know better than us why they take them to a different market.

And I'll bet they are still making money out of them...probably enough to justify taking them to an auction.

[formerFR]

yep, I think it has to do with a lack of a 'sales' department for 'used' vehicles they repo.

I suppose I can't blame them for wanting to just go the easy route to an auction, with no need to 'sell' the vehicle, advertise it/online, deal with haggling on the price, or deal with the paperwork involved in the transaction. Plus, I might imagine also that some potential customers might not be the customer of the Credit Union, and therefore not able to get a loan from the CU, leading to the CU coming across as more of a 'used car lot', rather than their desired 'lender' status. Some of their own customers might like one of the vehicles, and yet not qualify for a loan from their own CU, who is selling it, which would be aggravating and probably even a little embarrassing.... but, who knows. It's probably simply a business decision.
As long as they get back the balance of the loan, maybe an auction makes best sense for them... though I'll bet there's quite a few that don't. A business write-off, for sure.

[timfromma]

Have them take out their own loan and use the proceeds to pay off yours.

[pgandw]

Originally Posted by Jaimberlyn

Happy Tuesday Everyone! I was curious if anyone knew of a loan company that offers assumable RV loans? We have our RV for sale and was approached by an interested buyer, but they wanted to know if the loan was assumable. Unfortunately, our loan is not.

Back in the late '70s and early '80s, some home mortgages were assumable (VA mortgages certainly were). Having an assumable loan at 9% when the prevailing rate was 13-16% was a gold mine. BUT you usually had to take back a 2nd mortgage to cover between what was owed and the selling price. We did that selling our 1st house, and it worked out. Our buyer sold the house 2 years later, and the 1st mortgage was paid off, giving me my VA loan privileges back. Meantime, I was renting and didn't need the cash - which I was paid 16% for.

BUT that was in the days before universal credit ratings and credit checks. Each bank did its own underwriting and risk analysis. Nowadays, dependent on credit ratings from outside the bank, banks aren't going to make an assumable loan.

As other have said, there are only 2 reasons to assume a loan today: 1) the assumable loan has an incredibly low interest rate, 2) the buyer can't qualify for a reasonable interest rate.

just my thoughts and experiences
Fred W
2019 Flagstaff T21TBHW A-frame
2008 Hyundai Entourage minivan

[SailorSam20500]

Originally Posted by Cabinfever97

FormerFR ... Our CU takes repos to a auction an hour away. I asked why they didn't sell local and make more money. The answer I received was they wanted the vehicles out of the area. No explanation for why.

In a prior job for one of the auto finance companies, I worked on a system that managed where used vehicles were sent for auction. I was amazed at how complex it was. Program took in shipping costs, recent sales prices along with the option list on the vehicle including color. Seems black vehicles sell better in north Wisconsin than in south Texas... Sometimes it was worth shipping a vehicle 1000+ miles!

[waybeck2018]

Originally Posted by MR.M

it would be very brave to do what you suggest . maybe a family member , but a stranger no way . you open the door for all kinds of headaches . once their gone with your rv . you don't know where . they could driver off never make a payment . doesn't matter what papers they sign with you . then it's your ass on the ropes for payments , while your rv is off to who knows where . it could take yrs to find them are you may never . even if you do find them then it's courts and etc etc that would be a big mess . never become a bank unless you know the person personally even family can be a pain

Better a stranger than a family member!! Or better yet, neither one.

[waybeck2018]

Originally Posted by Cabinfever97

FormerFR ... Our CU takes repos to a auction an hour away. I asked why they didn't sell local and make more money. The answer I received was they wanted the vehicles out of the area. No explanation for why.

Maybe to keep the original owner from seeing the car and causing the new buyer grief?

[JohnD10]

Originally Posted by waybeck2018

Maybe to keep the original owner from seeing the car and causing the new buyer grief?

Or maybe keeping the original purchaser from trying to get it back by themselves.