unbelievable!! Can't afford this! Please help

[ELMC]

OP, I'm sorry you are in the position that you are. I think your best bet is to do a real analysis of all the possible solutions and plan a strategy to get out of this predicament. I don't want to sound preachy, but my advice would be to consider keeping the contracts (I don't think it really makes sense to throw away $6,000 at closing just to get out). But I would also advise you to make the tough choices that will get you out of this situation as quickly as possible. That means renting out all your points and using all the proceeds to pay off your loan. In addition, take the money that you would have spent going to Disney and throw that at your loan as well. If this strategy will cost you less in the long run it may be worth considering. The fact of the matter is that the exit strategies when buying direct are almost never positive (in the current marketplace). So no matter which way you slice it, selling is going to have a negative result. The only questions are how negative and when? Good luck with your situation.

 

[Dean]

Maybe I should call them and double check the numbers
thanks

Definitely check, I bet you're looking at the cost from 2011. I think you are safe assuming about a 4% increase per year.

 

[ELMC]

I agree that the OP should definitely be sure about the numbers, but I don't think this is about that. I think this is the sticker shock that DVC salespeople so carefully try to gloss over during the sales presentation. Purchase price is per point or in the form of a monthly payment. Maintenance fees are per point or a monthly payment. Nothing is in whole numbers until the closing documents, and for good reason. I think the OP experienced a wake up call, it was just this year's dues that were the trigger.

I think this thread is a great read for anyone who is overly nonchalant about buying direct and financing. Too bad it came at someone's expense.

 

[DougEMG]

OP, I'm sorry you are in the position that you are. I think your best bet is to do a real analysis of all the possible solutions and plan a strategy to get out of this predicament. I don't want to sound preachy, but my advice would be to consider keeping the contracts (I don't think it really makes sense to throw away $6,000 at closing just to get out). But I would also advise you to make the tough choices that will get you out of this situation as quickly as possible. That means renting out all your points and using all the proceeds to pay off your loan. In addition, take the money that you would have spent going to Disney and throw that at your loan as well. If this strategy will cost you less in the long run it may be worth considering. The fact of the matter is that the exit strategies when buying direct are almost never positive (in the current marketplace). So no matter which way you slice it, selling is going to have a negative result. The only questions are how negative and when? Good luck with your situation.

I agree, renting out all your points and putting ALL that money towards paying off your DVC is definitely a good idea.

 

[vinmar4]

OP, I'm sorry you are in the position that you are. I think your best bet is to do a real analysis of all the possible solutions and plan a strategy to get out of this predicament. I don't want to sound preachy, but my advice would be to consider keeping the contracts (I don't think it really makes sense to throw away $6,000 at closing just to get out). But I would also advise you to make the tough choices that will get you out of this situation as quickly as possible. That means renting out all your points and using all the proceeds to pay off your loan. In addition, take the money that you would have spent going to Disney and throw that at your loan as well. If this strategy will cost you less in the long run it may be worth considering. The fact of the matter is that the exit strategies when buying direct are almost never positive (in the current marketplace). So no matter which way you slice it, selling is going to have a negative result. The only questions are how negative and when? Good luck with your situation.

Thanks,
this is a good option also, we will look into it

 

[dianeschlicht]

Your situation is one of a number of reasons why I try to press those looking to buy to make sure they understand the risks and negatives, to never finance and to not overbuy the number of points they truly need or the higher cost resort. I can't tell you what to do but for most people in this situation I think the first question is whether they can afford DVC (or even Disney) at all. Truthfully if $1800 a year gets one into trouble, the answer is likely no. For most the best decision is likely to sell all, pay the upside down amount and start saving for when they really can afford it so it'll be a blessing and not a curse. Let us know how it works out and what you end up finding out along the way, esp how it works with trying to sell part with a loan in place.

Well said, Dean. I would NEVER buy something like a timeshare with a loan. It just doesn't make financial sense to do that. It's a luxury item, and if you can't afford to pay for it without a loan, you likely can't afford the dues either.

 

[amypetecar]

Very smart of you to break up your points into 3 contracts. If you do need to sell some off it's much easier. Not sure about AKV resale but the smaller contracts seem to sell for higher. Unfortunately, if you still have a loan it looks like you will lose money on a resale. But at least those dues will go away.

I agree with a previous poster about renting some of your points to try to off-set your dues. If you rent all of your points 1 year, you would probably get enough to nearly pay for 2 years' dues. Alternating travel and renting every other year you may be able to strike a balance. I would keep an account with the rental $ just for the dues or to pay your loan down faster.

Good luck!!

Great advice! Rent the points netting around $5 per point. That would be $1600 after membership fees.

Just a thought if i read this right, if you could bank and borrow 3 years worth of points, you could net $4800 after you pay membership dues. Take that $5K and make a lump sum payment on your loan. Youd be amazed how much that could save you in interest!

 

[ssawka]

Well said, Dean. I would NEVER buy something like a timeshare with a loan. It just doesn't make financial sense to do that. It's a luxury item, and if you can't afford to pay for it without a loan, you likely can't afford the dues either.

For the most part I agree with you, but as I mentioned in previous threads, we are the rare exception where taking the loan payed off. I do not believe this would happen again however. We bought at BLT in June 2009 for $92 PP and financed the purchase. We paid off the loan in one year. During that year the price of BLT rose 22%. We would have paid more if we had waited. But I do believe this is the exception and not the rule. I think whether or not financing the purchase makes sense depends on your individual situation and how fast you can pay it off. In some instances, financing for a year or two might make sense.

 

[KingRichard]

For the most part I agree with you, but as I mentioned in previous threads, we are the rare exception where taking the loan payed off. I do not believe this would happen again however. We bought at BLT in June 2009 for $92 PP and financed the purchase. We paid off the loan in one year. During that year the price of BLT rose 22%. We would have paid more if we had waited. But I do believe this is the exception and not the rule. I think whether or not financing the purchase makes sense depends on your individual situation and how fast you can pay it off. In some instances, financing for a year or two might make sense.

We bought our first TS(not DVC) around 10 years ago and financed as we didn't have 10K cash. Payed it off in 1 1/2 years.

It was a great opportunity for us and made all the financial sense in the world. We got it fairly cheap(they offered us 14K 1 yr later) and it matched up with other family members week. If we waited we never would have got the same week as it is a small place on a island.

We have rented it 3 times in the last 10 years and that has paid for 9 years of the dues and taxes. lol

It is ours forever at a place we love and our children love it more then words could ever explain(our daughters BD is on the Island).

However it was only 10K and not 30-50K so this must be factored in.

 

[dsanner106]

I was in that position and for a while, rented points. I paid all my mf and put the rest on my loan payment. paid it off early and then with only the mf to worry about it was no longer a problem.

Drew

 

[Dean]

For the most part I agree with you, but as I mentioned in previous threads, we are the rare exception where taking the loan payed off. I do not believe this would happen again however. We bought at BLT in June 2009 for $92 PP and financed the purchase. We paid off the loan in one year. During that year the price of BLT rose 22%. We would have paid more if we had waited. But I do believe this is the exception and not the rule. I think whether or not financing the purchase makes sense depends on your individual situation and how fast you can pay it off. In some instances, financing for a year or two might make sense.

Regardless it adds risk and usually cost. There are a few exceptions where money is guaranteed and coming where it makes sense but these are by far the exception.

 

[csharpwv]

There are three things that are absolute truths when it comes to DVC at this particular time:
1. Retail/Direct prices will continue to go up
2. Resale prices will continue to go down
3. Maintenance will go up over time

At this point in time, there is NOTHING that will change about any of those things.

There is FAR more resale points on the market right now than can be sold on a weekly basis.

There is MORE than enough retail points on the market (in DVD's hands) than can be sold even in the next year.

Those two factors alone should equal lower prices on both retail and resale - BUT DVD keeps selling more and more, so as long as they are SELLING they will keep RAISING prices slightly higher than market demand will allow them to do.

The fact that when we bought point prices were under $100 (in 2008) and they are $150+ now is absolutely ridiculous. Disney seems to have missed the memo that from 2008 to 2012 (and beyond) has been the worst sustained economic period in the history of the United Stated - yet the 50% increase came on full steam, and continues to increase every few months.

So, who thinks that the Grand Floridian Villas will hit the market at $200 per point?

Full retail for Bay Lake Tower is listed as $165pp - it's not far from $200....

Now that all of that is out there - the option to selling all and buying back later doesn't make sense at all.

The fact that the OP will owe $6,000 at closing just to make the sale is not an option at all - it makes a bad situation worse.

Renting points really makes a lot of sense - renting points CAN be profitable.

Rent half your points every year, using the money from the rental in two way - to help with the MF's - AND use the money out of pocket you would have used to pay down your loan faster!

That way, you owe less NOW and LATER!

For so many people DVC makes a lot of sense - however, when it comes down to it, if you have to finance DVC, it makes a lot LESS sense. However, the fact remains that you WILL see savings either way. So if it's money that a family would spend anyway - why not buy?

I know that DVC makes a lot of sense for us, and I know that we are saving money already - and the fact that we can invite out families to come along with us either to Hilton Head OR to WDW - it's great!

 

[vinmar4]

I want to thank every body for some great ideas. I called to verify the numbers for this year and it turned out that we were overcharged last year so we got some credit for this year for the MF's. We decided to rent our points as our first option if we run into this problem again. For this year, I got a good bonus from work so that took care of this year and I was even able to get the deal for the PAP
THANKS AGAIN

 

[DizBub]

That's great!! Thanks for coming back and giving the update.

Good luck in the future!!

 

[ELMC]

I want to thank every body for some great ideas. I called to verify the numbers for this year and it turned out that we were overcharged last year so we got some credit for this year for the MF's. We decided to rent our points as our first option if we run into this problem again. For this year, I got a good bonus from work so that took care of this year and I was even able to get the deal for the PAP
THANKS AGAIN

Glad you're finding ways to make it work for you. Thanks for coming back to update us, it is appreciated!

 

[ELMC]

I want to thank every body for some great ideas. I called to verify the numbers for this year and it turned out that we were overcharged last year so we got some credit for this year for the MF's. We decided to rent our points as our first option if we run into this problem again. For this year, I got a good bonus from work so that took care of this year and I was even able to get the deal for the PAP
THANKS AGAIN

I'm confused. I just went back and read your post again. I'm glad you got out of the jam this year, but if I'm understanding correctly you didn't rent out any points or apply any money towards your loan? After rereading your first post, it was easy to see the stress that you were feeling when you wrote it. My concern is that at some point in the future you are going to have the same experience. I'd still suggest that taking one year off, take the money that you would've spent on tickets, travel, expenses and couple that with the revenue you get from renting your points and pay down your loan balance a bit. I think you will be glad you did in the long term. But I could be wrong. Good luck.

 

[jhryb]

Well seeing how AKV is going for around $65-$75 a point on resale you are going to lose some money on the deal. I guess if you can't afford $1800 a year in maintenance fees the additional cost of going probably are an issue too. I guess if I were you I would sell at least one of your contracts. That would drop your fees by 30% right off the top.

Seeing how you have been able to use it for three years I wouldn't look at it as a loss. The amount you saved on those vacations probably offset the price difference.

Wow - I guess I have been out of the loop. We purchased AKV points a few years ago and we just added on this summer. We should have looked at re-sell. $65 - $75 is cheap compared to what we paid - UGH! I don't think I will tell my DH this.

 

[vinmar4]

I'm confused. I just went back and read your post again. I'm glad you got out of the jam this year, but if I'm understanding correctly you didn't rent out any points or apply any money towards your loan? After rereading your first post, it was easy to see the stress that you were feeling when you wrote it. My concern is that at some point in the future you are going to have the same experience. I'd still suggest that taking one year off, take the money that you would've spent on tickets, travel, expenses and couple that with the revenue you get from renting your points and pay down your loan balance a bit. I think you will be glad you did in the long term. But I could be wrong. Good luck.

I see your point, we are going to take a break after using the PAP and we are also thinking of probably seeling one of my contracts to my sister, she wants to buy 100 points from me. But again we are looking at diferent option for the future, also one big bill that we have with my son in a private HS will be done by next year and he is getting a scholarship for College, so things are looking good.
thanks again for your concern!

 

[ELMC]

I see your point, we are going to take a break after using the PAP and we are also thinking of probably seeling one of my contracts to my sister, she wants to buy 100 points from me. But again we are looking at diferent option for the future, also one big bill that we have with my son in a private HS will be done by next year and he is getting a scholarship for College, so things are looking good.
thanks again for your concern!

Thanks for clarifying. I think this is a good pointer that we really don't know the whole story about anybody's situation and our advice is generic and not specific. Obviously saying goodbye to the tuition bill will mean a whole different situation for you. I simply took notice of your initial panic and didn't want to see that come up again. Glad to hear that you've got it covered.

 

[disbound09]

Wow - I guess I have been out of the loop. We purchased AKV points a few years ago and we just added on this summer. We should have looked at re-sell. $65 - $75 is cheap compared to what we paid - UGH! I don't think I will tell my DH this.

Ouch! Well you will know where to look in the future.