Another Inheritance question - Is the DVC financing transferrable to heir?

[cindy_k]

There are a few DVC contracts in question, 2 of them still have financing.
Is the financing contract transferrable to an heir or do we have to pay it off during the transfer of the deed?

When my parents divorced, Disney transferred a contract with financing to my mom, however she was joint on the contract to start with.

Thank you!

 

[drusba]

In the usual case, any transfer of ownership will require that the loan be paid off. Your loan documents likely have a clause requiring full payment if the property is transferred to another. However, lenders often agree otherwise in certain situations such as the one you mentioned, divorce, or death and transfer to a family heir, or other transfers to a family member if the family member has good credit rating. In any event, the agreement of the lender would be needed at the time of transfer, and it is generally not required to agree.

 

[RoseGold]

Financing is a loan. Loans are (generally) not transferable. You can pay it off or refinance. The loan creates a lien on the property which prevents it from changing ownership without paying it off first, like a mortgage. Disney has no authority to transfer anything. This is a property. DVC itself doesn't care about your financing, the financing company does.

You will probably have to pay the loan off from other assets in the estate, or refinance it into your name, if the financing company will let you. If that can't happen, you'll have to sell to clear the debt, just like a mortgage. Maybe not relevant right now, with resale red hot and with DVC value historically speaking, but it is possible to have to bring money to the table to clear a sale of a timeshare. If that's true, you'll have to weigh the third option: foreclosure.

If you're worried about it, I'd call the financing company. Maybe they refinance these all the time?

 

[bumbershoot]

I originally financed through Disney. It was literally a mortgage; it said mortgage, and our bank-at-the-time refused to notarize it because of that word. Mortgages can't be transferred unless they have special clauses regarding transferring.