Financing

[Long Islander]

2.39 here (credit union) for 5 yrs. I did put down/trade-in worth 12k.

[Copeland]

There have been a number of posts regarding not using equity in your home as RV loans are tax deductible. Two things one is in many states your home is vulnerable anyways because if the RV is taken back for non payment then they can still come after your home for any balance due and put a lien on that. Then with tax laws always changing the government could stop us from deducting any home interest although it would be more likely they stop second home deductions first. So as the idea is one that's out of the box. It might not be the best for everyone. It wasn't the best for even me as I paid cash for me. I have a believe that this is a toy and I don't finance toys. I do like to try to help people when I get the chance. So with that sorry to get a post up in arms.

[Herk7769]

Originally Posted by Copeland

I have a believe that this is a toy and I don't finance toys. I do like to try to help people when I get the chance. So with that sorry to get a post up in arms.

This is great advice but as you said, cash for an RV is not for everyone. As a former Secretary of Defense once said, "you go to war with the army you have; not the one you wish you had."

As applied to this topic, for most, borrowing for capital purchases is a fact of life. We all wish we could pay cash, but reality gets in the way. If you must borrow; borrow smart. Finance the absolute minimum you can, for as short as you can, for the least interest that you can, and NEVER tie a car or RV to your HOME. You can always tell them to come get your car or RV and they can't touch your home, PROVIDED you did not tie the title to your house.

The fact that TODAY, you can write off the interest as a second home is a plus; not a determining factor. Remember most folks are in the 12 - 15% tax bracket and/or take the standard deduction on their return. If you don't have enough deductions to itemize; you can't claim the mortgage or RV interest.

So even if you CAN itemize your deductions, that means "Uncle Sugar" is only reimbursing you 12 to 15 cents for every dollar of deductible interest paid OVER the standard deduction.

You are also right, that as part of the "Grand Bargain," it is possible that second home interest may go away. Just as likely, all mortgage interest will go too as the biggest benefactors of the deduction are millionaires with two mansions; not regular home owners who at most are benefitting a few hundred dollars of tax savings; if they can even use it at all.

Then again; maybe not; but in the big scheme of things, it is not a driving factor.

[whj77372]

Yes that is correct about states being different. I am lucky that I have my ranch in Texas. We have very strong homestead laws. They can only take your homestead for; not paying the loan that bought the homestead or home equity loan on the homestead, not paying real eatate taxes on the homestead or the IRS can take it if you owe them money. Not many states are that good! They are not permitted to put liens on your homestead for money you owe on other things. It has never been a good idea, tax wise, to buy things, other then a homestead, for the tax deduction. The only reason I added that was because, from his comment, he didn't know that Rv were second homes and that the interest could be deducted. I also have not be able to idemize for many years.