question about financing

[princessbunny]

Hi, I'm new to this board and would my family has been interested in getting a dvc membership but I don't have 24,000 and was wondering if anybody would know what the interest rates to get a loan through disney and what year loans they have? If anyone can help me with this it would greatly be appreciated.

 

[Nabas]

Last month, Disney announced new (mostly higher) interest rates:

- "Premium" credit with 20% down: 9.99% (was 9.0%)
- "Premium" credit with 10% down: 12.0% (was 11.5%)
- "Preferred" credit with 20% down: 12.0% (was 10.5%)
- "Preferred" credit with 10% down: 14.5% (unchanged)
- "Standard" credit with 20% down: 14.5% (was 12.5%)
- "Standard" credit with 10% down: 17.5% (unchanged)
- Current DVC member with 20% down: 8.99% (new category)
- Current DVC member with 10% down: 11.0% (new category)

You seriously should consider buying resale. Prices are thousands less and several reselling companies can help arrange financing.

 

[princessbunny]

The resale seems very confusing to me? When someone sells do you only get a year or 2. I'm not really sure how the whole resale thing works and do you people do financing for that as well. Sorry for all the questions everyone.

 

[chalee94]

The resale seems very confusing to me? When someone sells do you only get a year or 2. I'm not really sure how the whole resale thing works and do you people do financing for that as well. Sorry for all the questions everyone.

example:

disney sells me a contract for SSR that expires in 2054. i decide in 2014 that i don't want to go to wdw that often any more and want to sell. so i "re-sell" the contract to you...you get the remaining years through 2054 (or whatever the end date is for the resort you purchase. they vary.)

if you bought SSR directly from disney, your SSR contract expires in 2054. if you buy a resale SSR contract from an individual, your SSR contract expires in 2054.

(and remember that if you buy DVC and eventually need to sell the contract to get out from under the annual dues, you WILL be selling on the resale market. disney will not offer you much if anything to take the contract back from you.)

there are companies who finance resale contracts but not many. (most timeshares don't hold their value well, making them inadequate to act as collateral for a loan.) when buying a resale, you will typically need to provide your own loan (a personal loan or home equity loan, if you don't mind putting your house on the line for a timeshare).

if you buy a resale, you cannot trade out of the DVC system for disney trades - no trading for disney cruises, wdw hotels like the poly or POFQ or adventures by disney (and these trades are very expensive). in every other respect, owning a resale is exactly like buying directly from disney. (you can still book DVC resorts based on availability and you can still trade out through RCI and the buena vista trading company for other timeshares.)

it's not that complicated, but it does take some time to learn the ropes.

 

[eal1226]

I am very new, in fact we just purchased resale and are waiting for ROFR. We contacted TTC and they actually recommended a few companies that financed. We got an interest rate that was less than half what disneys best rate was. Good luck!

 

[Nabas]

The resale seems very confusing to me? When someone sells do you only get a year or 2. I'm not really sure how the whole resale thing works and do you people do financing for that as well. Sorry for all the questions everyone.

"Use Year" (UY) has nothing to do with year. It has to do with the month when your "DVC points" become available for use. So, for example, you can have an April UY or a December UY. (I believe there are 4 months without a UY.) Once you purchase your DVC, you cannot change your UY.

Walt Disney World (WDW) has several DVC hotels. Contracts for each hotel expires in different years:

- Villas at Grand Floridian - 2064
- Bay Lake Towers - 2060
- Animal Kingdom Villas - 2057
- Saratoga Springs Resort -2054
- Beach Club Villas - 2042
- Wilderness Lodge Villas - 2042
- Boardwalk Villas - 2042
- Old Key West Resort - 2042 & 2057

Whether you buy directly from Disney or thru resale, the expiration date is the same.

As a starting point, I suggest you read here:

http://www.mousesavers.com/other-disney-vacations/disney-vacation-club/

 

[Nabas]

By the way TSS = Time Share Store.

They are a sponsor of this website and a major (and well respected) DVC reseller.

Their website is:

http://www.dvc-resales.com/

They offer a DVC resell guide for new buyers. I suggest you contact them and ask for it. It will help explain things.

 

[Mississippian]

Hi, I'm new to this board and would my family has been interested in getting a dvc membership but I don't have 24,000 and was wondering if anybody would know what the interest rates to get a loan through disney and what year loans they have? If anyone can help me with this it would greatly be appreciated.

Virtually everyone on this board will tell you to buy resale. You can buy a small 50- or 100-point contract and then pay someone to transfer you enough points to book what you want (technically a rule violation to pay for transfers, but no one seems to care). As your finances improve you can add another contract for cash.
If you buy directly from Disney you will pay a huge markup. If your interest rate is 10 percent your effective rate over 10 years will be more like 25 percent, since you are paying such a huge premium for the points.
Resale points can't be used for cruises or hotel rooms, both of which are the worst possible use of points. So Disney punishes resale purchasers by not allowing them to be idiots when using their points. Some punishment.

 

[shpdem]

this may not be the right place for this question, but what happens when the contracts expire? Will we have to repurchase or do they automatically renew or does anybody know?

 

[DMKEDM]

There are lots of guesses, but no one knows (probably including Disney!) what will happen to the DVC resorts when they reach the end of their lifespans...Disney could start new sales on a new multi-year lease, but the only indication we have so far is something they did with OKW--a few years back, they offered (for $25/point, with a time-limited incentive that reduced the price to $15/point) OKW owners the opportunity to extend their contracts from 2042 to 2054. This program was (we think) not well-received and none of us knows whether Disney will offer a similar program for the other resorts that expire in 2042.

For many of us, we don't care--we're old enough that the 2042 expiration date is well past our own "useful lives" (e.g., I'll be 90 in 2042, if I'm still here!)...for younger buyers, it is a more important question...

Probably best to think of any DVC purchase as a purchase for a set number of years...and of course, the closer we get to an expiration date, the more it matters in terms of whether our contracts will have any resale value...

Good luck with your decision-making.

 

[chalee94]

this may not be the right place for this question, but what happens when the contracts expire? Will we have to repurchase or do they automatically renew or does anybody know?

You contractually will have nothing and you will owe nothing further to Disney. You may have the option to buy back in or Disney might do something completely different with the property.

 

[ready123go]

I am very new, in fact we just purchased resale and are waiting for ROFR. We contacted TTC and they actually recommended a few companies that financed. We got an interest rate that was less than half what disneys best rate was. Good luck!

Thanks!

 

[cbnsoul]

I am very new, in fact we just purchased resale and are waiting for ROFR. We contacted TTC and they actually recommended a few companies that financed. We got an interest rate that was less than half what disneys best rate was. Good luck!

I'm surprised you had so many options. Just a few years ago, they only offered one and the interest rate was 8 ish percent. Of course, that was during the recession so many lenders had pulled back.

 

[princessbunny]

ok so say i buy a resale that had 50 points could i buy another resale with 50 or how do I go about if I wanted to add points? I hope that makes sense?

 

[shellf0969]

I sat through a session with a DVC rep on Friday Sept 20, 2013. He was rude. He did not give us a tour. He assumed we were too poor or just not his type. Anyway, It was for the Animal Kingdom Villas and the price was 13,500. They financed and it was 20% down. Start with $500 down and the rest due in I think was like 3 months. They start you off with 100 points now and 100 in April 2014. Our payment each month would be around $150 to $225 a month for 10 years. In addition, annual dues.

 

[shellf0969]

Hi, I'm new to this board and would my family has been interested in getting a dvc membership but I don't have 24,000 and was wondering if anybody would know what the interest rates to get a loan through disney and what year loans they have? If anyone can help me with this it would greatly be appreciated.

I sat through a session with a DVC rep on Friday Sept 20, 2013. He was rude. He did not give us a tour. He assumed we were too poor or just not his type. Anyway, It was for the Animal Kingdom Villas and the price was 13,500. They financed and it was 20% down. Start with $500 down and the rest due in I think was like 3 months. They start you off with 100 points now and 100 in April 2014. Our payment each month would be around $150 to $225 a month for 10 years. In addition, annual dues.

 

[Msmithmd]

Princessbunny, we have all been there when buying a DVC contract was a super exciting concept. But understand what you are getting. You are essentially paying several thousand dollars to lock in a good rate on a hotel room for the next 30-50 years. And by doing so, locking yourself into vacationing where these hotel rooms exist (WDW, DL, etc). Only these hotel rooms have to be booked many, many months in advance. And at peak times, you won't be able to book certain locations outside your home resort at all.

There is no "club" in DVC, despite the spin of the timeshare sales people. It is fixing a rate on future hotel stays. Nothing less or more. Here I am superimposing your dues, plus a fraction of purchase price, versus cost of a cash room rental- but the analogy essentially holds.

So when I see that you are considering paying usurious interest rates to buy in, it is painful. Please think long and hard before you pay this level of interest for this product. Far better to save for a couple years and pay cash. Otherwise you are in essence throwing money away now (interest) in order to save money (DVC versus deluxe Disney hotel rates) in the future.

Also, the comparison of DVC versus a Disney deluxe doesn't always hold true- so know exactly what you are buying before you purchase. Many are very happy with the DVC timeshare accommodations. Some are not- see the many threads here for further details.

All this said, we love our DVC points that we paid for with cash. We will get great value from the product over the years. Just keep in mind that a resale market exists because other people didn't have that same outcome.

 

[Deb & Bill]

I sat through a session with a DVC rep on Friday Sept 20, 2013. He was rude. He did not give us a tour. He assumed we were too poor or just not his type. Anyway, It was for the Animal Kingdom Villas and the price was 13,500. They financed and it was 20% down. Start with $500 down and the rest due in I think was like 3 months. They start you off with 100 points now and 100 in April 2014. Our payment each month would be around $150 to $225 a month for 10 years. In addition, annual dues.

Wow! That would be around $18,000 to $27,000 for those points. Plus member fees.

 

[Nabas]

Princessbunny, we have all been there when buying a DVC contract was a super exciting concept. But understand what you are getting. You are essentially paying several thousand dollars to lock in a good rate on a hotel room for the next 30-50 years. And by doing so, locking yourself into vacationing where these hotel rooms exist (WDW, DL, etc). Only these hotel rooms have to be booked many, many months in advance. And at peak times, you won't be able to book certain locations outside your home resort at all.

There is no "club" in DVC, despite the spin of the timeshare sales people. It is fixing a rate on future hotel stays. Nothing less or more. Here I am superimposing your dues, plus a fraction of purchase price, versus cost of a cash room rental- but the analogy essentially holds.

So when I see that you are considering paying usurious interest rates to buy in, it is painful. Please think long and hard before you pay this level of interest for this product. Far better to save for a couple years and pay cash. Otherwise you are in essence throwing money away now (interest) in order to save money (DVC versus deluxe Disney hotel rates) in the future.

Also, the comparison of DVC versus a Disney deluxe doesn't always hold true- so know exactly what you are buying before you purchase. Many are very happy with the DVC timeshare accommodations. Some are not- see the many threads here for further details.

All this said, we love our DVC points that we paid for with cash. We will get great value from the product over the years. Just keep in mind that a resale market exists because other people didn't have that same outcome.

Nicely said!

 

[staceymay00]

I sat through a session with a DVC rep on Friday Sept 20, 2013. He was rude. He did not give us a tour. He assumed we were too poor or just not his type. Anyway, It was for the Animal Kingdom Villas and the price was 13,500. They financed and it was 20% down. Start with $500 down and the rest due in I think was like 3 months. They start you off with 100 points now and 100 in April 2014. Our payment each month would be around $150 to $225 a month for 10 years. In addition, annual dues.

I would consider that rude guide to be a blessing in disguise. I'm guessing you can get a 100 pt AKV contract on the resale market for $8000 or so...maybe less, I have not been keeping up with what AKV contracts are selling for on the resale market, and I know it is a seller's market at the moment. There are some restrictions with resale that you should look into, but many don't consider the cost of direct to be worth it to eliminate those restrictions. Save for a couple of years so you can buy outright, or if you choose to finance at least it is a smaller amount and maybe a better rate.

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