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View Full Version : any Pros to MB if you don't plan to finance?


disneyberry
02-23-2003, 08:20 AM
if you don't plan to finance your DVC purchase, and wanted to pay the entire cost up front to avoid having loan interest...
is there any reason why doing the Magical Beginnings with DVC would still be a good idea?

the reading i've done here seems to indicate that MB is not a good idea unless you need a discount on the down payment if you're financing.
i don't know if i'm interpreting what i read correctly.

sorry if this question doesn't make sense... i'm only just starting to look into buying, and still pretty confused about a lot of the DVC buying process and pros/cons, etc.

Dean
02-23-2003, 08:31 AM
Actually I'd disagree with about every premise you have expressed. To me MB is only a good deal if you truly need that many points but don't need them right now and if you don't finance. IMO, most people that couldn't afford DVC without the reduced down payment shouldn't buy. I know there are exceptions like bonuses, tax refunds and CD's coming due.

Maybe you only get a studio or 1 BR now but will need a 2 BR later on. At HH and VB, if you're going to buy there anyway, the $15 pp return is more than the value of the current points though there is a reason they are offering more.

So if it makes you buy points you can't afford or buy more points than you need, don't do it. Just buy what you need/can afford the bank the points instead of selling them back.

DebbieB
02-23-2003, 08:41 AM
I didn't finance and used MB for 150 of my 250 points (which was the max at the time for phone purchases). I bought in September 99, got an April use year. I didn't plan to go until May 2000, so I still had 100 points banked before my first reservation and got a $1,500 credit. The key is that they backdate the use year, so only have to wait 7 months to get your full allotment.

patsal
02-23-2003, 08:51 AM
Like DebbieB said, it isn't just the financing or the down payment thing that makes MB a good way to go if you don't need the backdated points. For people who can pay cash for the contract, but will not need that many points it just lowers the price per point, so rather than paying 84 per point they are paying 74 per point. If you want ot bank the points for later use you may not find value in that. Our original contract we didn't use MB because we knew we wanted to bank points and take a full week in a two bedroom over Easter (high points time). When we bought our 100 point add-on we decided on MB because we wouldn't be using the first points until June/July and only for a quick 6 night trip. The extra savings outweighed the need to "bank" points. Just like the resort you choose for "home", and the original number of points you buy in with using MB is a personal choice.:)

anniet
02-23-2003, 08:54 AM
I purchased a 150 point contract in March 2002, but they backdated my contract to August 2001.

Since I was already there in 2002, I would not be returning until 2003 AND I would be receiving 150 points on August 1, 2002, so I didn't need the 2001 points.

I sold them back for $10pp with MB, AND I put more than what was needed down for a down payment. It just helped reduce the amount I needed to finance.

CarolMN
02-23-2003, 10:04 AM
We used MB when we bought in December 1999. Since we weren't planning to come back for a year and only had to pay approximately one month of dues for 1999, MB reduced the purchase price for us by nearly $1000. We were able to pay cash and it seemed like a good option for us. Not sure I'd do it again if I had to pay more than a month or two of dues on the MB points.

Cruelladeville
02-23-2003, 10:35 AM
This may not be the best place for this question, but does anyone know if Magical Beginnings applies to add-ons at this time? Specifically, if one gets to add-on at BWV, OKW, or WLV does the Magical Beginnings apply, or do you just pay the standard $84?

Dean
02-23-2003, 03:24 PM
Originally posted by Cruelladeville
This may not be the best place for this question, but does anyone know if Magical Beginnings applies to add-ons at this time? Specifically, if one gets to add-on at BWV, OKW, or WLV does the Magical Beginnings apply, or do you just pay the standard $84? I haven't heard of it applying to the sold out resorts and would assume not. It does apply to add ons at the other DVC resorts still in active sales but the rules are different. At VWL and BCV the min is 100 points and $10 pp. At VB and HH it's 50 min and $15 pp.

disneyberry
02-23-2003, 04:03 PM
thank you for the replies and examples. i think i understand MB a little better now.
is the following a good summary?

so, MB is good if:[list=1]
you won't be needing the "current" points from the backdated use year and can wait until your new use year gives you a new batch of points.
you are buying DVC towards the end of the backdated use year so you're paying a smaller prorated amount of the dues on points you're giving up (selling back)
you were planning to pay cash for your contract[/list=1]
i'm a little bit unclear about #2 though... i got that from CarolMN's post. maybe i'm interpreting incorrectly?

also, wouldn't buying a Resale contract at a cheaper pp cost still be better than $74/point through DVC?

Dean
02-23-2003, 04:33 PM
Originally posted by disneyberry
thank you for the replies and examples. i think i understand MB a little better now.
is the following a good summary?

so, MB is good if:[list=1]
you won't be needing the "current" points from the backdated use year and can wait until your new use year gives you a new batch of points.
you are buying DVC towards the end of the backdated use year so you're paying a smaller prorated amount of the dues on points you're giving up (selling back)
you were planning to pay cash for your contract[/list=1]
i'm a little bit unclear about #2 though... i got that from CarolMN's post. maybe i'm interpreting incorrectly?

also, wouldn't buying a Resale contract at a cheaper pp cost still be better than $74/point through DVC? The idea of buying later in the use year just means you get an excess of points with last years points now and this years coming up in a few months and without paying all of the dues on it. Otherwise I think you sumarized my feelings fairly well though it can be far more complicated than than. As for the resale it depends on what you want, whether you'll need financing, where you want to stay mostly, what size contract you want. The answer is still yes for the sold out resorts but less so than it was a few months ago.

patsal
02-23-2003, 04:38 PM
1. Yes
2.You do not pay dues on the points you "sell back" Dues aare only paid on the number you own not the number you have banked.
3.Cash or finance you are still saving money if you didn't want to use the backdated (banked) points.
OK the resale thing that's where things are a bit tricky now. Disney has been scooping up contracts that are selling for less than 72 per point lately. No it is not every contract, but a good many. At 72 per point plus closing costs MB usually works out to be a better deal unless the contract is for mega-points. Example a 66 per point resale on on 100 points with closing costs only saves 400 as compared to purchasing through Disney with MB. Raise the pp cost to 72 and it costs you 200 more to go through the resale than with Disney.

CarolMN
02-23-2003, 04:57 PM
Originally posted by patsal
...(snip)...2.You do not pay dues on the points you "sell back" Dues aare only paid on the number you own not the number you have banked.....(snip)....

That is not true or at least it wasn't when we used the MB program in 1999. We bought 200 points and at the time were allowed to "sell back" 100 of them through the MB program. We paid the prorated 1999 dues on all 200 points. We paid total annual dues on those 200 points for the following year, even though we didn't get our next full allotment until August (our use year). I agree that banking and/or borrowing has nothing to do with the amount of annual dues one pays, but you don't get a "free ride" for dues on MB points.

I got out our MB agreement and it does say that the Purchaser would be paying the annual dues associated with the Purchaser's ownership interest. (No reduction for MB points). I don't think that part of the MB program has changed since we bought.

My only point in mentioning annual dues was that one shouldn't assume that the "value" of the MB program is exactly the advertised price ($10/point now at BCV). To be accurate, you need to reduce that value by the amount of dues you have to pay on the MB points. If you use the MB program early in the calendar year, MB returns less value than if you buy later in the year.

Dean
02-23-2003, 05:12 PM
Originally posted by patsal
2.You do not pay dues on the points you "sell back" Dues aare only paid on the number you own not the number you have banked. Dues are actually paid on a calendar yeasr basis so you'd pay part (prorated) of the dues on the points you got the first year and all of the points on the next years points. There has been however some discussion that DVC has been giving an even bigger break like no dues this year but I have not confirmed that and suspect it's not accurate.You pay a prorated amount the first year on the old use year points and all of the upcoming use year points since points are paid on a calendar year basis.

randy55
02-23-2003, 05:34 PM
Originally posted by CarolMN
We bought 200 points and at the time were allowed to "sell back" 100 of them through the MB program. We paid the prorated 1999 dues on all 200 points. We paid total annual dues on those 200 points for the following year, even though we didn't get our next full allotment until August (our use year).

I'm getting confused over prorated dues.

Last week, I purchased 200 points with a June use year. I used MB for the 2002 use year points and I'll get another 200 points in June 2003. I believe I'll have to pay prorated dues on just the 2003 use year points. Since the 2002 dues calendar year has passed there will be no dues on the 200 points that I sold back from the 2002 use year. Am I understanding this correctly?

Has anyone else purchased points in 2003 and had to pay dues on the 2002 points?

Thanks

Dean
02-23-2003, 05:42 PM
Originally posted by randy55
I'm getting confused over prorated dues.

Last week, I purchased 200 points with a June use year. I used MB for the 2002 use year points and I'll get another 200 points in June 2003. I believe I'll have to pay prorated dues on just the 2003 use year points. Since the 2002 dues calendar year has passed there will be no dues on the 200 points that I sold back from the 2002 use year. Am I understanding this correctly? Randy, to a certain extent it's somantics. The dues paid in January of this year were for the remaining months of the 2002 use year and the months of the 2003 use year up until 31 December, that's what's meant by a calendar year basis for dues.

CarolMN
02-23-2003, 05:54 PM
Originally posted by randy55
I'm getting confused over prorated dues.

Last week, I purchased 200 points with a June use year. I used MB for the 2002 use year points and I'll get another 200 points in June 2003. I believe I'll have to pay prorated dues on just the 2003 use year points. Since the 2002 dues calendar year has passed there will be no dues on the 200 points that I sold back from the 2002 use year. Am I understanding this correctly?

Has anyone else purchased points in 2003 and had to pay dues on the 2002 points?

Thanks

You understand correctly.

Dues are based on the calendar year, not the use year. Since you are buying in 2003, you owe no dues for 2002. You will have to pay the 2003 dues on your entire 200 point purchase, and the 2003 dues will be prorated from the day you signed the purchase agreement until the end of the year.

The timing for our case was a little different . We purchased in December of 1999. Our use year was August. We received August 1999 points and elected to use MB. Even though we "sold back 100 points from the 1999 allotment to Disney, we had to pay 1/12 of the 1999 dues for all 200 points. Remember, dues are based on calendar year, not use year. We had to pay the whole year's worth of dues for our 2000 use year points, even though the use year didn't start until August and we had only 1/2 of our points to use until then. (The MB program at that time only allowed you to sell back up to 50% of your points or get a $2000 credit against the purchase, whichever was less). In my mind, the dues we paid in 2000 were for 7 months of 1999 points and 5 months of 2000 points. So we paid dues on the 1999 MB points that we sold back to Disney.

With a June use year, the dues you pay in 2003 are really for 5 months of 2002 points and 7 months of 2003 points. The real point is that you are paying the same amount of dues no matter if you use MB or don't use MB. If you don't use MB, you have 200 more points to use for those dues. If you do use MB, you get a reduced purchase price for those dues. That's the trade off.

I know, too much information! :teeth: Probably not worth confusing everyone over, either. Sorry!

FredS
02-23-2003, 06:37 PM
Originally posted by Cruelladeville
This may not be the best place for this question, but does anyone know if Magical Beginnings applies to add-ons at this time? Specifically, if one gets to add-on at BWV, OKW, or WLV does the Magical Beginnings apply, or do you just pay the standard $84?

MB does apply to add-ons, but there is a minimum 100 points which you must purchase. We discussed this about a month ago and OKW, VWL and BCV were available to us. I was talking to our guide about a referral and didn't inquire about any other resorts. While very tempting, we decided that we really do have enough points for the moment!

patsal
02-23-2003, 06:47 PM
What I meant by not paying dues on the MB points is that 2002 is over and you would not pay dues for that year. Sorry about that confusion!

jdkdorn
02-23-2003, 06:47 PM
I just purchased a Sept use year and you do not pay the dues for 2002 because I bought in 2003. I used MB and yes you still need to pay dues this year. If I had bought in Oct 2002, when we first talked to them, I would have had to pay prorated dues or 3 months worth.

I am staring my dues from Fe 11 and have to pay 11 months worth instead of the normal year.

I did MB because I wanted to put more down. I have been to WDW 2 times in the last year and will not be going again until 2004, so we did not "need" our points. If I wanted to I could have put more cash down but I chose to do it this way. Now when I get my tax refund and my bonus it will be paid off.

I do agree though that you should not buy unless yuou can really afford it. We have looked at this for a few years and have just purchased now because the money situation was finally right and we had a little more available cash.

Hope this helps and if you decide to buy, Welcome Home!:)

Dean
02-23-2003, 07:42 PM
Originally posted by patsal
What I meant by not paying dues on the MB points is that 2002 is over and you would not pay dues for that year. Sorry about that confusion! The dues paid in January would be for the remainder of the use year of the 2002 plus the first part (but not all) of the 2003 points.

FredS
02-23-2003, 08:01 PM
Originally posted by patsal
What I meant by not paying dues on the MB points is that 2002 is over and you would not pay dues for that year. Sorry about that confusion!

I don't think that you caused any confusion. Just as both you and CarolMN indicated, if you purchase DVC now you do not pay any dues for 2002, and pay prorated 2003 dues. You receive 2002 points, pay zero dues for those points. You pay dues for whatever portion of 2003 calendar year remains, but get full 2003 points.

Just as in the last year for DVC everyone will pay a full year's dues, and receive a full quota of points, regardless of what use year they have. Dues are for the calendar year, not for the 12 month period of your use year.

Dean
02-23-2003, 09:19 PM
Originally posted by FredS
I don't think that you caused any confusion. Just as both you and CarolMN indicated, if you purchase DVC now you do not pay any dues for 2002, and pay prorated 2003 dues. You receive 2002 points, pay zero dues for those points. You pay dues for whatever portion of 2003 calendar year remains, but get full 2003 points.

Just as in the last year for DVC everyone will pay a full year's dues, and receive a full quota of points, regardless of what use year they have. Dues are for the calendar year, not for the 12 month period of your use year. We disagree. Dues are for a calendar year which is 12 months, not for the use year points. Assuming full points the last use year, the points should be only for the number of months until the end of the use year.

disneyberry
02-23-2003, 09:36 PM
okay, i think i've confused myself again after reading all the prorated dues stuff.
anyway, i'll get back to that later...

for now, i just wanted to ask if the following scenario would be a good case for choosing to buy 150pts of BCV w/ MB through DVC some time in next few months:

if the following were true:[list=1]
my next WDW vacation would be in Dec 2003, requiring about 200 points.
the two DVC properties i'm most interested in are BCV and BWV
i plan to pay for the contract in full in cash up front
the next vacation after 2003 would probably be in Oct 2004 requiring about 85 points
future vacations after that would be between Oct and Feb... probably once a year, twice if able to. (what use year is best? Sept 2002?)[/list=1]
also, if someone can take this example and explain again, how the prorated dues would work, that would be really helpful! sorry, i thought i was understanding, but now i'm lost again...

Dean
02-23-2003, 09:56 PM
That seem like an appropriate scenario. For 150 points, it doesn't seem worth it for you to worry about a BWV resale unless getting the standard view rooms are a big deal. A Sept or Oct use year should work well for you and would qualify for the MB since it's be more than 6 months out assuming you move quickly, esp for Sept.

Assuming you purchase now, my understanding is you'd pay dues prorated from the day you sign (not the closing date) for the rest of the year. Then in Jan of next year, you'd have 8 months of dues for the rest of the 2003 use year and 4 months of the 2004 use year (assuming a Sept use year). This is how it's been for a long time but recently some have reported getting even a better deal on the dues for the purchase year, I'd call your guide to be certain.

FredS
02-24-2003, 09:18 AM
Originally posted by Dean
We disagree. Dues are for a calendar year which is 12 months, not for the use year points. Assuming full points the last use year, the points should be only for the number of months until the end of the use year.

I re-read my post, thinking perhaps I had a typo, but I also said that dues are for a calendar year, not for use year, so I don't understand how we disagree. And I don't understand your second sentence at all? Are you trying to say that in 2042, if your use year is, for example, January, you will only pay for one month of dues?

Dean
02-24-2003, 12:49 PM
Originally posted by FredS
I re-read my post, thinking perhaps I had a typo, but I also said that dues are for a calendar year, not for use year, so I don't understand how we disagree. And I don't understand your second sentence at all? Are you trying to say that in 2042, if your use year is, for example, January, you will only pay for one month of dues? Fred, the way I read your post was that the dues paid in January were for the 2003 use year and points. If I misunderstood, I apologize. The dues paid in Jan are for X number of months of your Jan use year and the rest of the year for 2003. Assuming one gets all the points the last use year (big assumption), one would pay 1 month of dues. I'm sure the points will be prorated the last year or 2 and the dues then as well.

WebmasterDoc
02-24-2003, 01:06 PM
Originally posted by randy55
I'm getting confused over prorated dues.

Last week, I purchased 200 points with a June use year. I used MB for the 2002 use year points and I'll get another 200 points in June 2003. I believe I'll have to pay prorated dues on just the 2003 use year points. Since the 2002 dues calendar year has passed there will be no dues on the 200 points that I sold back from the 2002 use year. Am I understanding this correctly?

Has anyone else purchased points in 2003 and had to pay dues on the 2002 points?

Thanks

The dues will be prorated from the time of purchase until the end of the year regardless of your use year. Dues are always based on the calendar year- not on the use year.

In this case, you will pay no dues for 2002 and will pay 2003 dues prorated from last week (about 10 1/2 months) on 200 points. In 2004, you will pay dues on 200 points due in January for the entire year.

If you purchased a contract in late November, you'd owe only about 1 month of prorated dues for that year and then a full year of dues in January for the subsequent year. The use year is irrelevant when it comes to annual maintenance fees.

If there is a circumstance where you would get no points from the last year- dues would be prorated from the time you'll actually get the points (this occured during 2002 for those who purchased add-ons at BCV.) At this point, that scenario won't occur again until/when/if presales are offered at SSR.

Enjoy!

disneyberry
02-25-2003, 11:56 AM
ok, i was thinking about the difference between doing MB w/ Disney @ $74/pt essentially vs. getting a resale.

i've read here and there that general opinion is: because of the closing costs, it might actually be better to go w/ Disney.

the thing is, OKW or even BWV are looking more appealing to me now. (after i ran some more numbers, taking into account the potential lower point cost for stays)... in other words, my opinion has changed about my resort preferences, and now i'm thinking i would be fine with a contract at either OKW, BWV, or BCV.

so, in theory, couldn't a OKW resale be a better value even if it was selling at a higher price of... oh, say $72/pt or something?

what about if it was going for the same price as Disney MB? $74/pt?

skippelm
02-25-2003, 12:46 PM
When we bought we also paid upfront. But we did choose to do magical beginnings. We bougth at a time when we had already made our trips for the year and knew we would be waiting before we came back. So we took advantage of the financial incentive of MB and gave up the first years points since we knew we wernet useing them. Also, we knew that we could borrow from the following year if we changed our minds. The way we saw it a discount is a discount!


HTH,
Sara

Dean
02-25-2003, 06:52 PM
Originally posted by disneyberry
ok, i was thinking about the difference between doing MB w/ Disney @ $74/pt essentially vs. getting a resale.

i've read here and there that general opinion is: because of the closing costs, it might actually be better to go w/ Disney.

the thing is, OKW or even BWV are looking more appealing to me now. (after i ran some more numbers, taking into account the potential lower point cost for stays)... in other words, my opinion has changed about my resort preferences, and now i'm thinking i would be fine with a contract at either OKW, BWV, or BCV.

so, in theory, couldn't a OKW resale be a better value even if it was selling at a higher price of... oh, say $72/pt or something?

what about if it was going for the same price as Disney MB? $74/pt? It depends. Assuming 200 points, the same points once things are said and done and $450 closing with an OKW price of $70 pp; One is still coming out about $350 ahead. Is that enough to be worth it, that depends on what you want. The lower points of OKW and BWV along with the lower fees of OKW make both atractive for the right propective buyer. The price savings alone is not enough to justify the meager savings but the other issues and the fact you may get significantly more points with the resale than through DVC using MB may make your determination easier. You can also ask seller to pay closing, increasing your savings to $800 in my example.