DVC - Brother wants me to take over payments

[Ray Salas]

My brother bought into DVC about 4 years ago. He is looking at reducing his monthly obligations and has offered me the chance to take over payments. I do not want to get a loan to purchase this, but I am willing to take over the payments for my brother. What is the logical/easiest way to do this? Does my brother add me to the deed? I am sure this can be done, just confused on how to go about doing this. Thanks in advance for any help.

 

[sndral]

Which resort did he buy, how many points does he own and how much does he owe?
I'd be surprised if a lender allowed you to be added to the deed unless you were also liable for the loan which the deed secures.

 

[summabreeze85]

Its hard to give you a good answer without knowing the specifics behind this:
Is he trying to sell his contract to you or gift it to you? does he still want to own all or part of it?
Did he buy direct and is the loan through dvd?
Is he reducing his monthly obligations because he doesn't want the actual payment or does he want the payment gone for debt ratio reasons to buy a house or something?

 

[bumbershoot]

You can't be added to the deed until it's paid off.

ETA: as far as I know, and it's something we're interested in because we have a loan and I'm not on the deed but DH would like me to be. and everything I've read says that we have to wait until it's paid.

ETA again: I'm talking about a loan through DVC. The OP said later it's a resale so MAYBE what I said isn't accurate for the OP's situation.

 

[Ray Salas]

Its hard to give you a good answer without knowing the specifics behind this:
Is he trying to sell his contract to you or gift it to you? does he still want to own all or part of it?
Did he buy direct and is the loan through dvd?
Is he reducing his monthly obligations because he doesn't want the actual payment or does he want the payment gone for debt ratio reasons to buy a house or something?

You can't be added to the deed until it's paid off.

ETA: as far as I know, and it's something we're interested in because we have a loan and I'm not on the deed but DH would like me to be. and everything I've read says that we have to wait until it's paid.

Thank you for all the replys. Here are some more details. My brother has 160 points at Animal Kingdom. He purchased this from the Timeshare Store and has a loan that has 3 years left on it. He doesn't want the payment anymore nor does he want to use the points anymore. After speaking with him, he is thinking that I can take over the loan for 3 years and once the loan is paid off, he can change the deed over to my name. In the 3 years of the loan, his thought process is that he can make the reservations for me until the deed is changed over and the loan is paid off. I hope this helps and thank you for your feedback and opinions. Ray

 

[erionm]

Thank you for all the replys. Here are some more details. My brother has 160 points at Animal Kingdom. He purchased this from the Timeshare Store and has a loan that has 3 years left on it. He doesn't want the payment anymore nor does he want to use the points anymore. After speaking with him, he is thinking that I can take over the loan for 3 years and once the loan is paid off, he can change the deed over to my name. In the 3 years of the loan, his thought process is that he can make the reservations for me until the deed is changed over and the loan is paid off. I hope this helps and thank you for your feedback and opinions. Ray

He can add you as an Associate Member which would allow you to make the reservations yourself.

Check with your brother to see if it's a personal loan (unsecured, home equity, etc)., or if it's secured by his ownership interest. Not many 3rd party lenders will offer financing that's secured by a timeshare. If the loan is not secured by his ownership interest, he should be able to transfer it to you even if that loan has an outstanding balance.

Until the ownership interest is transferred to you, you won't have access to any financial information (loans and/or annual dues) nor would you be eligible for any member benefits like DVC pricing on APs.

 

[holden]

Why can't he sell it to you? That seems to me to be the best way to handle it.

 

[supersnoop]

Thank you for all the replys. Here are some more details. My brother has 160 points at Animal Kingdom. He purchased this from the Timeshare Store and has a loan that has 3 years left on it. He doesn't want the payment anymore nor does he want to use the points anymore. After speaking with him, he is thinking that I can take over the loan for 3 years and once the loan is paid off, he can change the deed over to my name. In the 3 years of the loan, his thought process is that he can make the reservations for me until the deed is changed over and the loan is paid off. I hope this helps and thank you for your feedback and opinions. Ray

If he bought resale four years ago and has three years left on the loan, odds are he has a fair amount of equity. He'd probably be better off selling the contract on the open market.

 

[OrangeCountyCommuter]

If you trust your brother and he trust you and this will work if not could be a big family fight

 

[JimMIA]

Your seemingly simple question is more complex than you think, and is actually several questions in one.

Who pays the loan?
This is easy. You can pay the loan to help your brother by simply writing a check each month or setting up the automatic payment method of your choice. If that's your motivation, any number of methods will work fine.

The lender doesn't care who pays the loan. They only care that it gets paid.

Who can use the account?
Again, very easy. Your brother could make your reservations for you, but a much better approach is making you an Associate Member as Michael suggested above. Easy to do, easy to undo -- both can be done online. You would NOT receive DVC member benefits in that situation, but would be able to use, bank, and borrow the points.

Who OWNS the account?
Critical question, but also relatively simple to set up in a variety of ways. If joint ownership is desired, your name could be added to the contract provided there was no encumberance (loan, lien, etc) on the contract. If your sole ownership is desired, as long as there is no encumberance that's a simple matter of a title transfer through MS. Between family members, it's no big deal.

Ownership, obviously, determines who can sell the account. If jointly owned, both would have to agree and sign. If he owns it, it's his decision. If you own it, it's your call.

Likewise, ownership determines who is responsible for the ongoing financial obligation until 2057. NOT a minor detail.

Ownership also carries benefits others have mentioned, but those are not guaranteed and are not a big deal in the grand scheme of things.

But what about the long-term?
Aye...there's the rub! The cost of DVC ownership has two components: acquisition cost (purchase price, loan, etc) and annual cost (In Disney's pixie dust terminology -- "Annual dues"). Over time, acquisition cost is a fraction of the cost of ownership -- the much bigger cost is the annual cost of "dues."

AKV has the highest "dues" of any WDW DVC resort: $6.30 per point in 2015. So for 160 points, that's $1,008.00, and it will almost certainly increase a little each year.

If your motivation is obtaining DVC points at a discount, you have to consider whether what you save taking over payments outweighs the high annual dues at AKV.

Depending on how long you own, another resort with lower annual dues, purchased resale, might have a lower total cost. But you'd have to find a specific contract and compare the exact costs to know.

Good luck with your decision.

 

[papamouse1]

Why can't he sell it to you? That seems to me to be the best way to handle it.

The issue is how difficult it can be to get a loan on a used timeshare rom an individual. Personal line of credit from your own bank is about the only way. So I imagine, they are just trying to avoid any loan origination fees, etc.

The only real issue is you trust level with your brother. Technically, he will "own" it until it is paid off and can change title. As has been mentioned, you booking won't be an issue. He can make you an Associate Member (we put our daughter on ours..), or he can book for you no problem

 

[smiths02]

How much is this going to cost you a year (payments and dues)? Renting that many points would run around $2200-2300, so if it will cost you around that, then I would do it. That way, if brother goes back on his promise to transfer ownership once the loan is paid off, you haven't really lost anything.

Personally, though, I would just rent the points each year from him or buy from my brother outright.

 

[ziravan]

The issue is how difficult it can be to get a loan on a used timeshare rom an individual. Personal line of credit from your own bank is about the only way. So I imagine, they are just trying to avoid any loan origination fees, etc.

The only real issue is you trust level with your brother. Technically, he will "own" it until it is paid off and can change title. As has been mentioned, you booking won't be an issue. He can make you an Associate Member (we put our daughter on ours..), or he can book for you no problem

Monera Financial specializes in financing DVC using DVC as collateral. The Timeshare Store uses them and there's a good bet that is where your brother financed as well. Between them, you and your brother, and a closer like Magic Vacation Title, I suspect it would be doable to transfer both title and loan to you (essentially him selling to you).

I would do that, even if it cost more. That way, you own what you paid off, you help your brother, and you avoid stickey situations when it comes time to transfer the title of a deed you paid off.

The peace of mind of a clean transfer is worth the cost, if you ask me. As Dave Ramsey says, these kinds of situations change the way you eat Thanksgiving Dinner as a family. Help your brother out but keep things clean and untangled.

 

[ziravan]

The only catch to the above is ROFR. Disney has a right of first refusal on all sales. Disney allows sales/gifts to family that's not subject to ROFR, but I'm not sure if that applies to brothers.

If it does, great. If not, then transferring the loan would have to gut enough equity so that DVD didn't take the property on ROFR.

 

[Tunseeker1]

Here is a different take on it.

Call the lender and call Disney.

Sale to family/transfer to family should be a rubber stamp for rofr.

Refinance the loan with monera or timeshare lending. Dvc is approved with no credit check.
That gets you on a loan and him off the loan.

 

[Dean]

The only catch to the above is ROFR. Disney has a right of first refusal on all sales. Disney allows sales/gifts to family that's not subject to ROFR, but I'm not sure if that applies to brothers.

If it does, great. If not, then transferring the loan would have to gut enough equity so that DVD didn't take the property on ROFR.

The is no auto bypass for family sales, only family gifts. Otherwise ROFR applies.

This is tricky since the amount truly paid for the membership will certainly not bypass ROFR and it's illegal in FL (and all states I know because it's unethical) to put a different number than the actual sales price. I'd agree with talking to the finance company and Disney. They may indeed agree to allowing an addition but not a deletion at this time.

From a family partnership situation, it's very risky as well. Besides the potential family turmoil, if they have major issues, the OP may lose the contract they've been paying and in some situations such a transfer could be seen as fraud. Best to also talk to an appropriate attorney in this situation.

 

[BUDDYBEAR]

good luck hope every thing works out