Buy a small contract to start

[hooked]

We've been looking to buy for a few years now but just don't have the $16,000 to front. We do not want to finance but cannot currently save that money. We have went every year for the past 4 years. My question, would it be smart to just buy a 50 point contract resale and borrow the next years points thus giving us a 100 to use on our next trip. Then when we are ready to go again (may take one year off) buy an additonal 50-100 points resale at the same resort. What are the advantages/disadvantages of buying small contracts? Should we buy same use year, same resort? If anybody has done this or knows anything about this please help me out. I'm sick of going every year and paying money when I could of owned by now.

 

[dudelydude]

Your idea is very smart for a couple of reasons. First, smaller contracts are easier to sell if you should ever have to do that. Second, it is more affordable for someone like you (and me) to gradually build-up your point total. To answer your other questions...as the old addage goes, buy where you want to stay. Start with 50 points, bank and borrow, then do an add-on later. If you add-on, I think you should try to get the same use year or a use year (month) close to the original. Use year is important for banking window which makes it convenient to have the same or close to the same use year for all your points. I would get the same resort so all of your points are dedicated to the 11 month booking window...important for you with a smaller amount of points. Those that can afford 300 points at AKL and another 300 at BWV have more flexibility to mess with the different options you asked about. Hope that helps.

 

[Cinderella1122]

We are in the exact same boat. I have gone to Disney World 5 times in the past two years and have another trip planned for 09'. I'm getting tired of paying cash and dream of owning DVC. Being a recent college graduate, who just started her first real career, a $16,000 contract is no where in the cards, but I can easily finance a small 50 pt contract which satisfies my vacation needs.

 

[Grandbuddy]

We've been looking to buy for a few years now but just don't have the $16,000 to front. We do not want to finance but cannot currently save that money. We have went every year for the past 4 years. My question, would it be smart to just buy a 50 point contract resale and borrow the next years points thus giving us a 100 to use on our next trip. Then when we are ready to go again (may take one year off) buy an additonal 50-100 points resale at the same resort. What are the advantages/disadvantages of buying small contracts? Should we buy same use year, same resort? If anybody has done this or knows anything about this please help me out. I'm sick of going every year and paying money when I could of owned by now.

It is easier to stay organized if all your contracts are the same use year. Until you have a pretty good pool of points, it is helpful to have all your contracts at the same resort, so that you are able to use the 11-month window for planning. Now, if you can't plan that far ahead, keeping your points at the same resort may not be important to you.

Many of us would applaud the fact that you do not want to finance your DVC purchase. DVC is a luxury, and unless you can easily afford the monthly payments, it could turn into a hardship...and a burden. If you "cannot currently save that money," financing something like DVC is out of the question.

All that said, if you haunt the resale listings, you may note that 50-point contracts are not all that common, as most folks did not purchase contracts that small, and once purchased, a contract cannot be broken up. You will find the occasional small contract, but starting with 50 points, then trying to find another 50 or 100 with the same use year and resort, might be hard to do. Additionally, the 50-point contracts cost more per point, the closing costs are more per point (not that much cheaper than closing a larger contract), and they go quickly.

If I were you, I would try to set aside a certain amount of money each month, to try to save for a contract in the 100 to 120-point range, or so, for a start. If you can't put aside that kind of money, you really might be better off using Disney vacation packages at the value resorts, for now, until you have better cash flow.

And please don't think I don't understand what it is like to not be able to afford something like DVC. I have raised my family and have grandchildren, now, and we have just reached the point where we can comfortably make this purchase.

Good luck, whatever you decide.

 

[dudelydude]

I just wanted to reinforce what grandbuddy said. To make an effort to purchase your contract in lieu of financing is and EXCELLENT point. Some people may have to finance and that's OK, but it is very noble that you are doing your best not to over-extend yourself. I am waiting to purchase myself and have the same idea as you. If you can get a 50 point contract, bank and borrow for a few years, all the while having a standing order for another 50 points in with all resale entities, something should come up for your home resort and near your original use year. You just have to do your best to be ready when the salesperson calls you.

 

[Laxmom]

This is what we did. We purchased a small 50 point contract, paying cash, that had 50 banked points. That way we got our 100 points right away. We then added on a second contract, also loaded, that gave us our 100 points for our second year. Now we have 100 every year and paid cash for both. We did go with August UY for both.

 

[Micmaniac]

We bought a 70 pt. contract a couple years ago, enough for 5 nights at any resort most of the year. A year later, bought 30 more direct from disney for same month/resort. Now have 100, and will hope for one more 50 or so point contract some time soon. It was a great way to get into dvc without a loan.

 

[mgilmer]

We started small so we could pay cash for our first DVC investment and are adding on in 25 point increments directly from DVC. Just because you get your first small contract from the resale market does not mean you cannot addon small (in as little as 25 point increments) later from DVC and if you addon directly from DVC you can do so with no closing costs and keep your contracts all with the same UY so all your points are coordinated.

 

[123Disney]

We did the same thing. Started with a 50 point contract. Added on as we could. It has taken a few years but we are now at 150 points. Adding on through Disney (same UY) has made it easy to manage small contracts. It's great going on vacation and only paying the MF. We will continue to add on as we can.

 

[burberryplaid]

I just wanted to thank everyone for their information, advice, and encouragement in this thread. DH and I were originally thinking of purchasing a contract around 200 points. (It's just him and I at the moment so we don't need anything beyond a studio, really) We were going to pay half in cash and finance the rest, but now I think we'll buy a small contract via resale and add on as our finances permit and our need for bigger accomodations and more time at the world increases. I feel better doing this, because I think it's probably the smart way to approach it.

Thanks again! I know I am not the OP but all of your words have relevance to me as well.

 

[thewesterberg]

I, too, want to thank everyone for their advice. We've decided that DVC is something we'd like to do and as much as I'd like to sign the dotted line today, that wouldn't be financially smart for us to do. Instead, we're leaning towards the smaller contract (70pts or so) and then doing add-ons. The advice given here reaffirms we're headed in a good direction for our family's situation!

 

[anbouk]

We started small so we could pay cash for our first DVC investment and are adding on in 25 point increments directly from DVC. Just because you get your first small contract from the resale market does not mean you cannot addon small (in as little as 25 point increments) later from DVC and if you addon directly from DVC you can do so with no closing costs and keep your contracts all with the same UY so all your points are coordinated.

Excellent point!!! I did not know this being a 'new' DVC member, THANKS

 

[Keira1387]

Can anyone tell me what it would cost for a small contract loan? Maybe 50-100 points. TIA!

 

[hooked]

Thanks to all for your responses. This makes the most sense for me and you all have given great insight and info to assist with this decision.

 

[princessfionasmom]

I am so glad I am not the only one who started with a 50pt resale. I wanted to buy big but I didn't want to finance so I bought 50pt resale at OKW and that will get us a sun thru fri (5 nights) visit during most seasons at OKW in a studio. Eventually we will add on but probably just in the 25pt increments, as the finances allow, but for right now while our kids are young staying in a studio will work just fine. It is a great way to get in and start enjoying those prepaid vacations.

 

[dianeschlicht]

I, too, want to thank everyone for their advice. We've decided that DVC is something we'd like to do and as much as I'd like to sign the dotted line today, that wouldn't be financially smart for us to do. Instead, we're leaning towards the smaller contract (70pts or so) and then doing add-ons. The advice given here reaffirms we're headed in a good direction for our family's situation!

Hey, those of us who live in the land of 10,000 lakes and 1,000,000,000 mosquitos have to get away from those cold winters, and WDW/DVC is a GREAT way to do it for less cost. We found we were going semi-annually and paying 3-5,000 on accommodations, so it wasn't rocket science to figure out that a couple of trips, and we'd have it "paid" for. Of course, that was a long time ago, and our investment was significantly smaller then versus now.

 

[mgilmer]

Can anyone tell me what it would cost for a small contract loan? Maybe 50-100 points. TIA!

From other threads, it seems DVC is offering standard financing (14.75%) to most financing purchasers (those with FICOs less than 750). Preferred financing is about 10.75%. The down payment is dependent on credit rating and can vary from 0% to 30%. DVC is very liberal with their financing compared to a lot of companies when it comes to qualifying those with marginal credit. It will be interesting to see if that continues in the current economic environment.

 

[dunkie7557]

So if you buy a small contract and you can only maybe get one or 2 nights out of it per year (depending upon time of year and accommodations of course)- i heard it could be very hard to get a reservation for only a short amount of days needed especially for a weekend. I am not sure if this applies to booking 11 months out but i have read peoples dismay at NOT being able to book a 1 or 2 nights so easily.
I am referring specifically to people who own at BCV,VWL,BWV especially . The larger resorts you could get in. But i always want to be able to use my home resort which will be one of the above i listed.

Has anyone had any experience with getting shut out trying to book one-2 nights at these resorts or any DVC resort?

 

[mgilmer]

I could be wrong, but as long as you are booking your home resort at or near the 11 month window, you should never have a problem with any length of stay so long as you have the points for it. Now there are exceptions for Christmas, for example, but even then you can book if you call right at the 11 month window. DVC is structured for long term planning, not spur of the moment trips (although that can be done too, depending on availability).

 

[thewesterberg]

Hey, those of us who live in the land of 10,000 lakes and 1,000,000,000 mosquitos have to get away from those cold winters, and WDW/DVC is a GREAT way to do it for less cost. We found we were going semi-annually and paying 3-5,000 on accommodations, so it wasn't rocket science to figure out that a couple of trips, and we'd have it "paid" for. Of course, that was a long time ago, and our investment was significantly smaller then versus now.

Yup, getting away to warmer weather is always a good thing!! When we went last September (DH's 1st time, and my second time after a childhood trip), we thought we'd be back in about 5 years. Well, ha! ha! on us... we lasted 11 months!! Realizing that this is a place we like going and we'll frequent, saving up for DVC seems to make sense. Which means we'll have to take a little time off, but having the proverbial DVC-carrot hanging out in front of us we'll provide lots of motivation to work through the withdrawal!