A RV Financing Hack That Worked for Us

Good credit, but not enough history to qualify. This idea got us into a new Winnebago.

Heath & Alyssa Padgett Heath & Alyssa Padgett  |  02.04.2016

Late in the fall of 2015 a dream of mine came true. I didn’t go to Disney World or win the lottery, but we signed the paperwork on a 2016 Winnebago Brave. I know it sounds corny, but I totally geek out over RV’s.

For most of 2015 I tried to convince Alyssa that we should buy a new rig and upgrade from our 1994 class c motorhome, but she always shot me down (she’s much more realistic and financially responsible than I am). We had been attempting to pay down a bunch of our student debt while living as cheaply as possible in our RV, so it just didn’t make sense to go out and splurge on a super expensive RV.

While I was 100% on board with paying off debt, it didn’t stop me from dreaming and occasionally having a weak moment where I suggested we go out and buy a new rig.

But after a long year of frugal living and paying off over $14,000 of our student debt, we finally felt like we were at a place where we could entertain the idea of buying a new motorhome. I had done tons of research and we ended up settling on the new, retro Winnebago Brave. I fell in love with it the moment I saw it. It was classic, iconic, and had all the living space we needed to Working Full-time in Our Rig.

After deciding to make the leap to a bigger and new rig, we were even able to find the one in Austin. I called the dealership. We drove over and did a tour of the RV. It was perfect. We loved her (it’s a she) and wanted to jump on it as soon as possible. I told the dealer we had been working on building up our credit and paying down debt over the past year, so hopefully financing wouldn’t be an issue. We went ahead and put down the $100 deposit to lock down our new home on wheels.

But then the call came. Our credit wasn’t good enough. Our debt to income ratio was too high, meaning that we didn’t make enough money on top of the remaining student debt we still owed. And since we do mostly freelance work, meaning that our checks come through random channels like one-off checks or Paypal, we couldn’t provide the kind of consistent paystubs banks would like to see when they are lending someone over $100,000 (the Winnebago Brave retails at $123k).

I was crushed. I had been ecstatic about moving into a rig where I didn’t have to constantly worry about a leaking roof or showering in the world’s smallest shower. I knew I had to figure out a way to make this deal happen.

I knew our current income situation could easily cover any kind of monthly payments. It was an educated decision that we had carefully thought out. We weren’t being irrational, we were just facing resistance from the banks.

I wasn’t giving up on my dream that easily.

I visited several banks in person, telling them our situation. I know that sometimes you’re more likely to make deals happen in person than on the phone. When people can see you, hear you, they are more likely to respond and want to help. But each of the banks said the same thing.
“Your credit is good, but you don’t have enough of it. You need a lower debt to income ratio…”

Argh (that’s my aggravated noise).

My next approach was finding a co-signer. I knew my dad would be on board to help. But a quick conversation with the salesman at Crestview RV in Austin quickly shot down that idea. He told me that you are not allowed to co-sign an RV. What? I had never heard that before in my life. A little bit of research proved this to be true. It seemed like the light at the end of the tunnel was dwindling for buying our new RV.

In a last ditch effort, I did some more research on Google. I read several articles about RV financing until I found one that caught my eye. The article was titled “How Co-Buyers Help Secure RV Approval”.

As it turns out, there is something called co-buying in the RV world. It’s different than co-signing and 100% legal. According to the article, a co-buyer will have equal ownership in the purchase VS. in co-signing where a co-signer is only responsible if a person defaults on the payment.

I forwarded the article to the RV dealership. They told me it wasn’t always that black and white, but they had done it before. Less than 24 hours later we were approved for the RV purchase and we had brought my father on as a co-buyer. While we paid for the RV 100% on our end, we worked out a 2 week/year timeshare deal with my dad for being so cool with us leveraging his more extensive credit history.

Co-buying turned out to be the loophole that allowed us to get approved for financing and seal the deal on our new Winnebago Brave! Virtual cheers to a new home on wheels!

If you’re trying to figure out financing on a new RV and have any questions, leave a comment below and I’ll do my best to share what I know and help out.

Heath


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8 Comments

  1. Mark Posted on 04.09.2018

    Heath, thanks for the post! I found it very helpful. Quick question, how much did you put down upfront on your full-time rig?

  2. Don Posted on 02.18.2018

    Hi. I am in the process of trying to move out of the apartment that I’m in and move in with my long-time fiancee, who purchased a small acreage nearby after her father passed away and left her a small inheritance. (She paid cash for the place I’m planning on moving the RV to.) We have been in the process of “growing back together again” for over two years since she bought this place, but I will always need a little space to call my own as I always have over the years — even when we lived together for over a decade. The problem is, I’m now on Social Security disability and even though I know I can make the payment since I will not be paying for an apartment, I don’t want to make the mistake of saying I want to live in it even though I will use it probably 5 days out of the week overnight and much of the time when I need to work at my computer without being smothered by the eBay business my fiancee is doing (the already-small main house is overflowing with clothing she sells; the RV will be my refuge). How can I take advantage of the fact that I am virtually guaranteed to make the payments, while assuring the institution that I’m not going to run away and leave her holding the bag? That it’s not a “primary residence” per se which is what they are concerned about despite the fact it will be tethered to her property 95% of the time? I’ve been researching this issue and surprised there’s very little data on situations like ours. (She’s willing to be a ‘co-owner’, as long as no-one will evict her out of her house in the event I die prematurely or lightning destroys the RV etc. Any suggestions would be gratefully appreciated.
    Don

  3. Lela Posted on 09.25.2017

    I haven’t noticed any replies to these comments. I was wondering about smaller loans, 30k and I don’t have a great credit history but the problem is lack of available credit and having no credit the past few years. I am looking to go full time resident into a 2010 Winnebago that’s been updated to a tiny home. Any advice, all ideas I welcome!

  4. Beverly Evershed Posted on 07.22.2017

    If you have a friend or a relative you can register yourself as living there.
    Even if you spend 24/7 in your RV No one can dictate how much time you spend in the RV or at the registered address.

  5. Cheryl Frerichs Posted on 06.27.2017

    We are full timers wanting to trade but have run into a brick wall because we do not have a”residence address” that can be verified. We were approved instantly on credit, but can’t get passed this address issue. Are there lenders for current full timers anywhere? We need to trade as our Itasca is 12 years old. Help!

  6. Randy Posted on 02.14.2016

    We got a home equity loan at 2.5% awhile back (125K). Why not consider this before selling or buying? It’s much cheaper loan and they don’t care what you buy with it, home repairs or not! As long as you have equity, use it to go play! You’re not getting any younger!

  7. Bernie Evans Posted on 02.13.2016

    Our goal is to sell our house in South Austin and use the equity to pay off debt and buy a 30-34 ft. Class C (or B+) this Spring. We have excellent credit, but the debt we have now will still be on my credit rating, which is now at 793. We are retired with annual income of about $36,000.

    The dealers we have spoken to have told us that financing will be an issue because we won’t have a permanent residence. Is there a work-around (hack) for this situation?

  8. Greg Burns Posted on 02.13.2016

    Thank you for this GREAT article! Another thing to NEVER do (um, which I DID! Um, DUH!) on a financing application is to answer “YES” to the question: “Do you plan to LIVE in your RV?” If you answer “yes”, then chances are, the application will be turned down! Why? It seems that an RV is a “vehicle” that can be repossessed, BUT if you’re “living in it”, then you must be “evicted”, which could take several weeks to months to go through legal channels. And, of course, which lending institution wants to wait weeks or months to get their property beck? NONE OF THEM! I found this out way back in 1992 when I decided to apply for a 26 foot “Wilderness” travel trailer, and made that “mistake”. I was turned down almost instantly! So the next time I found a great deal, a leftover 25 foot “Shasta” 5th wheel, even though I did plan to live in it in a local mobile home park, I did NOT let the dealership nor the bank know that fact. LOAN APPROVED! WHEW! So be VERY careful with what “information” you freely give out when applying for any kind of loan. Thanks again for this article! Greg