View Full Version : LQ trailer- mortgage as second home?
May. 27, 2012, 02:49 PM
My husband and I are looking at LQ trailers and have been told that many people buy them with a mortgage as a second home.
Why do they do this and what are the advantages and disadvantages to doing this? Or would it be smarter to get a short term loan from the bank?
May. 27, 2012, 03:25 PM
I would think they would fall in to the same category as RVs, which are (in GA) treated as vehicles for loan purposes. That means it's not necessary to qualify for a mortgage and they are subject to all the same rules as vehicle loans.
Mortgages are designed for the purchase of REAL ESTATE = Real estate is "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; (also) an item of real property; (more generally) buildings or housing in general.
May. 27, 2012, 03:31 PM
This /\ /\
May. 27, 2012, 03:39 PM
Maybe I'm thinking it is referred to as a "second home" for tax purporses?
May. 27, 2012, 04:06 PM
I don't think that would work either.
May. 27, 2012, 04:11 PM
TXnGA, I have heard the same thing, it can be labeled a vacation home and can be financed for a longer period of time than an auto loan.
A little off topic but in my county horse trailers are taxed at a luxury rate. Cattle/stock trailers are not required to even have tags IF they are used to haul cattle in the county. RV's were taxed lower than a regular horse trailer. Go figure. I outfitted my horse trailer (4' shortwall DR) to meet the RV requirement and enjoyed the tax break for a few years til the county made them all fall under one rate.
I personally never saw the paperwork but a gal I knew 9 years ago claimed she got special govt financing/loan on her large LQ trailer because it was needed to allow their handicapped child attend the rodeos with them.
May. 27, 2012, 04:53 PM
If you have a horse business and you use it in the course of conducting your business you could take advantage of a depreciation deduction. A conversation with your CPA is in order.
May. 27, 2012, 05:21 PM
RVs can be considered a 'second home' if they have sleeping, cooking and toilet facilities. Mortgage interest on a second home can be taken as an itemized deduction on your tax return, like you do with primary residence mortgage interest. Have a chat with your CPA and see what's best for your individual situation.
May. 27, 2012, 05:23 PM
I was told they can be classified as a "second home" as long as they have plumbing. A tax deduction can also be taken if you use a home equity loan to finance the trailer.
We choose to finance ours through a local bank for as short a term as possible. We went 60 months at an interest rate of 7% two and a half years ago. After learning the hard way, I would never take a 15 year loan to pay for a horse trailer again. But, that is just me and my fear of debt.
May. 27, 2012, 05:57 PM
yes you can write it off as a second home, just like a beach house or whatever, but it has to have it's own bathroom and kitchen. And yes do talk to a cpa about it before you do it as it pertains to your own situation.
Writing it off as a business expense is totally different.
May. 27, 2012, 09:39 PM
Lower interest rate!!!!
If I had put LQ in mine, I would have had a lower interest rate on my loan.
Now if you're paying cash, it makes no difference.;)
May. 27, 2012, 09:53 PM
How much do you want to pay for it?
want to really tick 'em off? Pay cash for it and walk away.
If it has plumbing, it qualifies as a second home. Just pay for it, and leave them making nothing for financing it. They really don't like it a bit lol
May. 28, 2012, 07:58 PM
how you choose to pay for it and whether or not you can write it off on your taxes are two entirely separate questions.