Any thoughts on how to pay for DVC???

[Shelby5514]

We would like to buy into DVC and now we're trying to figure out how to pay for it. We've kinda decided against financing through Disney due to the high interest rate. Other than the logical home equity loan/ second mortgage route, anyone have any brilliant ideas to make some extra cash??? Ebay has been good to me in the past so I'm counting on that for some of it.

(I only wish I would have thought of this 6 years ago when we started making annual trips, I could have had it paid for by now!!! )

All ideas welcome!!

Shelby5514

 

[ReneeQ]

We bought at BWV in January 2000, added on at BWV in Oct. 2000, and added on at VWL in Oct. 2001. In the long run, I really didn't have to "come up with" any money to buy DVC. This is why:

For years now I have had $200 come out of every paycheck and go directly to a savings account at the credit union. That way we always had the money saved up for our Disney trips. After I sat down and did some figuring, I realized I could just use the money from the savings that I used to use to pay for the hotel room, to pay the DVC payment. I had the DVC payment taken directly from my savings account each month.

So, when we go to Disney, there is less money in the savings account, but that's okay, since I don't have to withdraw money from savings to pay for the hotel.

We did finance through DVC, as it was so painless, and we did finance for 10 years. BUT we will have it paid off on 1/1/05, which is just about 5 years to the day from buying. Every year when we got a tax refund we put it right onto our DVC loan.

This has worked for us!

 

[janette]

We bought both using DVC financing, one for a 3yr term and the other for 7yrs. The 3yr is paid off now and the higher interest wasn't too bad because of the short term. The interest is also tax deductable since it's considered a mortage.

The 2nd load I paid off using a credit card with 2.9% fixed interest. You might take a look at some of the offers from your CC companies. They have some really low interest offers but you have to be careful and watch the terms closely. Once you put a balance on a low interest rate most often you can no longer use the card without losing the benefit.

 

[HaleyB]

Originally posted by janette
We bought both using DVC financing, one for a 3yr term and the other for 7yrs. The 3yr is paid off now and the higher interest wasn't too bad because of the short term. The interest is also tax deductable since it's considered a mortage.

Unless this is your primary residence the intrest is not deductable. Sorry, Uncle Sam will not help you pay for your vacation 'home'.

 

[DMRick]

Unless this is your primary residence the intrest is not deductable. Sorry, Uncle Sam will not help you pay for your vacation 'home'.

This is incorrect information. Uncle Sam will let you take off mortgage insurance on your income taxes on a vacation home..or even on an RV, as long as it has facilities and you got a "mortgage" type loan.



Here is a snip-it of home mortgage you can deduct, formt eh irs.gov site:

Topic 505 - Interest Expense

Interest is an amount you pay for the use of borrowed money. To deduct interest you paid on a debt you must be legally liable for the debt. Additionally, you generally must itemize your deductions, unless the interest is on rental or business property or on a student loan.

If you prepay interest, you must allocate the interest over the tax years to which it applies. You may deduct in each year only the interest that applies to that year. However, there is an exception that applies to points paid.

The types of interest you can deduct as itemized deductions on Schedule A Form 1040 (PDF) are investment interest and home mortgage interest, including certain points. For information on points, refer to Topic 504 .

You can deduct student loan interest on Form 1040 (PDF) or Form 1040A (PDF). For information on deducting student loan interest, refer to Topic 456.

Home mortgage interest is interest you pay on a loan secured by your main home or a second home. The loan may be a mortgage to buy your home, a second mortgage, a home equity loan, or a line of credit.

Your main home is where you live most of the time. It can be a house, cooperative apartment, condominium, mobile home, house trailer, or houseboat that has sleeping, cooking and toilet facilities.

A second home can include any other residence you own, and treat as a second home. You do not have to use the home during the year. However, if you rent it to others, you must also use it as a home during the year for more than the greater of 14 days or 10 percent of the number of days you rent it, for the interest to qualify as home mortgage interest.

Home mortgage interest
Home mortgage interest and points are generally reported to you on Form 1098 (PDF), Mortgage Interest Statement, by the financial institution to which you made the payments.

If all of your mortgages fit into one or more of the following three categories at all times during the year, you can deduct all of the interest on these mortgages:

Mortgages you took out on or before October 13, 1987, called grandfathered debt.
Mortgages you took out after October 13, 1987, to buy, build, or improve your home, but only if these mortgages plus any grandfathered debt totaled $1 million or less throughout 2003. The limit is $500,000 if you are married filing separately.
Mortgages you took out after October 13, 1987, other than to buy, build, or improve your home, but only if these mortgages totaled $100,000 or less throughout 2003, and all mortgages on the home totaled no more than its fair market value. The limit is $50,000 if you are married filing separately.

If one or more of your mortgages does not fit into any of these categories, refer to Publication 936, Home Mortgage Interest Deduction, to figure the amount of interest you can deduct.

You may be able to take a credit against your federal income tax if you were issued a mortgage credit certificate by a state or local government for low income housing. Use Form 8396 (PDF), Mortgage Interest Credit, to figure the amount.

You cannot deduct personal interest. Personal interest includes interest paid on a loan to purchase a car for personal use, and credit card and installment interest incurred for personal expenses. Items you cannot deduct as interest include points (if you are a seller), service charges, credit investigation fees, and interest relating to tax–exempt income, such as interest to purchase or carry tax–exempt securities.

You may be subject to a limit (phaseout) on some of your itemized deductions including mortgage interest. For 2003, this limit applies if your adjusted gross income is more than $139,500, or $69,750 if you are married filing separately.

 

[ripleysmom]

"Unless this is your primary residence the intrest is not deductable. Sorry, Uncle Sam will not help you pay for your vacation 'home'."

Yeah what DMRick said!!


shelby have you looked at what it would be to finance DVC for a year only? That rate is a lot lower and maybe you would be able to pay it off within the year's timeframe.

 

[newholiday]

In Nov 01 we financed thru Disney for 5yrs.
By Spring 03 it was paid off. Combination of retirement money & DHs grandparents gift.
Our 1st trip "home" is this Oct!

 

[WDWLVR]

Our first purchase we put 50% down and financed the other 50% through DVC for a one year period.

That was paid off in 2001. In late 2002 we purchased an add on at Vero with Cash.

Now our DVC is paid for except for our yearly dues and we have many wonderful years of vacationing ahead!

 

[Alice Sr.]

Shelby5514 - are you going to get a tax refund this year? If so maybe you could put that down, crank up your e-bay effort and try taking your coffee to work and bring your lunch (for you or your spouse) I did the latter to boycott a cafeteria increase and to try to cut down on carbs and fat. The bonus was a net savings of about $80 and 5 pounds a month. Not to make you feel bad but to encourage you to buy now. I bought 6 yrs. ago my original contract will be paid for a year from now, and I have been told I could sell the points for more than I paid for them. So even though it may not be your perfect situation as long as it's not being financially reckless I say go for it. I hope things work out for you.

Alice

 

[Lori-n-NY]

I purchase DVC this past Jan and gave 30% down and finance the rest for 5 years. AT first I thought this amount per month was going to be a little higher then I wanted but I did a few other changes and am able to comfortably make the payment.

I drop call waiting on my home phone along with caller id and the extra stuff I didn't really need. I consider switching interent providers until I saw the post about AOL being cheaper if you ask. So I called and asked and got the $17.95 per month which is lower then the $23.90 by $5 x 12 months =$60. Also the big saving right now for me is I am refinancing my house. saving $90 a month and able to skip one payment the month we close and rolled all closing cost into the mortgage cost. I should close in May so thats $90 x 7 months=$630 plus the $700 not paying one month. That $1330 goes along way when DVC is $195 a month. So my payments for this year will be done out of the areas I saved. I will get a raise in Jan and I will put some tax return money away and will have no problems paying for DVC next year either.




And remember because you pay DVC you will not pay to stay in a resort and you need to consider that as saving money. I go for about 14 nights within 1 year.14 x nightly cost (differs depending on where and when you stay) = just about DVC payments for a year
DVC can be done with some creative cut backs. I am a single mother working full time making between $30,000-$35,000 a year. I own a house a new car and daughter has braces. I also travel from SYR to Disney twice a year and have an Annual pass and a room full of Disney pins.

I do not feel like I'm cheating my daughter out of anything she wants and we still eat out but with a BOGO coupon or order an meal and share. I also drink water when we eat out and put the $1.50 in the Disney jar. I have soda at home and I can drink my $.30 can at home. It has taken my about a year to get things in order to be able to purchase DVC and not have to stop everything else we do. I worked really hard to pay off credit cards and keep spending on unnecassary items down. I also buy clothes at the end of the season for the next year. This works out great. I picked up two pair of jeans for my daughter for next year. Were $29.99 marked down to $12.99 I waited until they went to $7.99 and bought them on a weekend sale where everything was an extra 10% off. It doesn;t always work but I work in a mall and walk thru JCPEnneys everyday and watch for the sale items ot go further down.

So now that I shared more then anyone wants ot know....I hope I inspired someone to make a few changes and purchase DVC.

Lori

 

[zurgswife]

We used a combination of home equity loan for the first purchase and then the others I used CC with 0% interest....

 

[Sam60]

Lori, I am in awe. Well done!

 

[las3888]

We did like ReneeQ...bought a little at a time. Check out the resales at dvcresales.com or dvc-resales.com. If you buy in 50 or 100 point increments, it is alot easier to handle than buying all at once. You could start with 50 points and stay in a studio on non-weekend nights and when you feel more comfortable, purchase another add-on package. This way, it's also easier to sell if you ever need to, since the smaller the package, the faster they seem to get snatched up on the resale market.

There is no real easy way to pay for it, but by starting small, it's less to pay for!

Good luck!

 

[marcyinPA]

When my SIL and BIL bought into DVC several years ago, they got free park tickets( length of stay) for each person who checked in. Does DVC still do this?

 

[CarolMN]

Originally posted by marcyinPA
When my SIL and BIL bought into DVC several years ago, they got free park tickets( length of stay) for each person who checked in. Does DVC still do this?

No. That sales incentive has long since expired.

 

[MELSMICE]

If you really want it you will find a way to pay for it.

We had saved our change from the time we were married & finally used it for a $6,000 down payment on DVC. We financed the rest through a home equity loan.

Part of tax returns, a portion of paychecks & other miscellaneous money that came in was used to pay off the loan. We bought in Dec. 2002, added on in June of 2003 & I just made the last payment this past month.

I wanted to get it paid off as quick as possiblefor 2 reasons. First, DH & I hate any kind of debt, with the exception of a mortgage or care payment. Second I can now look at adding more points.

Like I said, if it's something you want bad enough you'll find a way to finance & pay for it.

 

[Disney Doll]

Dh and I bought our first contract at OKW in 1997. At the time, we financed through the DVC for a 10 year loan, because that gave the lowest required monthly payment. Our thought was to pay more than the required payment each month, but if a month came along where we were a little "short", all we HAD to pay was the low, required payment. We got that contract paid off in about 3- 31/2 years using that method.

I know some folks who have used home equity lines of credit, and that interest can be written off taxes, I believe. I have known folks who use their Disney VISA or a Skymiles card to purchase and get the additoinal benefit associated with a credit card with some sort of return offer, and then the next month pay off the credit card with their home equity line of credit, to get the benefit of using that and writing off the interest.

There are probably folks who are more "financially savvy" than I am that may have even better suggestions.

Good Luck!!! I will say that DH and I have NEVER regretted purchasing the DVC. It is, by far, one of the best purchases we have ever made.

 

[allforpooh]

We charged it on a credit card that gave Airline mileage points, then once the bill came we paid off the credit card with a equity loan. With a little creative savings we were able to pay that off in a couple of years, then we bought an add - on buy charging it to the Disney Visa - getting the points then again paying that off with an equity loan check.

We should have that paid off by the end of the year....we normally put any extra cash that we receive onto the loan balance...

Denise

 

[DiznEeyore]

I have a quick question for those of you who have paid extra "here and there" on your DVC loans. Is there a specific way to do that? For example, do I have them take the extra amount out on our regular monthly debit day? Or can I send in extra checks somewhere?

Dh and I are gearing up to pay off our DVC contract, as it is our last debt (aside from our house). God willing we'll cut our loan term from 7 years down to 3 with the extra payments we plan to make! I know we'll enjoy our trips even more knowing that they're paid in full!

 

[lochbox1]

We are looking into purchasing double the amount of points we think we may need. We will sell the extra points for $10pp and use that money to pay our maintenance fees yearly.

We still have the initial payment to make, but it is made easier and will be done with in a few years, yielding "Free trips to Disney" for 30+ years!