Mobile homes or campervans have become increasingly popular over the past few years.
Their increased popularity has resulted in dealers stocking a much larger variety of models than they would have say, five or ten years ago.
Their high demand has also resulted in a highly competitive market in which even those working within a relatively tight budget can afford a fairly modest model.
Even with all the competition, buying a motor home without some form of finance is uncommon, with many campervans easily reaching into the hundreds of thousands.
When making an equally as expensive purchase, the most common option is to usually use the equity in any property owned, usually the buyers home to obtain a secured loan.
However, as the buyer does not actually own the motor-home prior to the loan, they are likely to be unable to obtain a secured loan under such circumstances.
If this is the case, then the buyer is generally able to use the motor-home as a form of collateral for the purpose of obtaining a secured loan.
This loan is then secured against the value of the newly purchased motor-home, which means that if the required repayments are not met then the lender has the legal right to repossess the motor-home and recoup their loss.
The distinct advantage to using secured loans to purchase a new motor home or campervan is that the high cost can be spread out over a long stretch of time, generally anything up to 30 years.
It's worth noting that generally speaking the longer a loan term is the more interest will ultimately be paid.
Such decisions are best discussed with an independent financial advisor, and it's always best to obtain a quote from a few lenders before signing the doted line.
