Buying DVC while owning home or renting apt???

[skruggie]

Now, if your reasons fo rnot owning are different than not having enough down payment, then DVC might make sense.

Well, what i I not only do not have a 20% downpayment for a home in California, but also have no desire to own, hence am not saving money for a downpayment?

I don't see where a DVC purchase has anything to do with home ownership. You can also say that about any purchase you make about not owning a home. How are they directly correlated to each other?

 

[DVCGeek]

I don't see where a DVC purchase has anything to do with home ownership. You can also say that about any purchase you make about not owning a home. How are they directly correlated to each other?

DVC is a condo and you get a mortgage if you finance from Disney, so in those respects it is similar to buying a primary residence... I think that is at least part of what people compare things on.

 

[Lawshark]

How can they regret it? why not just sell it?
my first contract I bought, used and then sold..I broke even for what I bought and sold it for(resale both ways)
so essentially the few trips I took with it, were free except for MF fees.
maybe resale sales are sluggish, but a fair price and i suspect they can sell it reasonably quick. No reason for regret

I would assume that they regret it because they financed most, or all, of the purchase price.

They now cannot afford the annual dues...and cannot sell...because they would owe more money than they can sell the points for.

That is the problem with financing.

For those who truly can afford it...and do finance it but have cash on hand for emergencies...I'm sure financing is a minimal risk.

Unfortunately...I bet the statistics would show that the vast majority of those financing the DVC purchase are at a very high debt to income ratio and do not have much in the way of savings.

If someone loses a job...gets hours cut back...or has anything else go wrong...they are #^#$^.

 

[jlewisinsyr]

Unfortunately...I bet the statistics would show that the vast majority of those financing the DVC purchase are at a very high debt to income ratio and do not have much in the way of savings.

If someone loses a job...gets hours cut back...or has anything else go wrong...they are #^#$^.

Maybe, maybe not. Our debt to income ratio is VERY low when you look at our DVC loan, car loan and an elective surgery debt (very low interest rate, made sense to finance it). We have over a year in savings not tied to any expense, so I guess if your statistic is true, we would definately be an outlier. The reason we financed is we can choose how to pay it off, and not draw down on our savings, in this market, I think in some situations that can actually be better advice (well, except for those who just strongly believe no one should finance DVC).

 

[skruggie]

DVC is a condo and you get a mortgage if you finance from Disney, so in those respects it is similar to buying a primary residence... I think that is at least part of what people compare things on.

So what if you don't finance from Disney? That's my point - its a luxury purchase, no different than any other luxury purchase, such as a car.

One shouldn't let luxury purchase get in the way of their long term financial goals in general, but I wouldn't correlate it to home onwnership. I would say the same thing about retirement fund investing, or long term savings goals. If someone isn't doing those things they shouldn't be purchasing "wants" either.

But I wouldn't automatically correlate it to a home purchase.

 

[Sammie]

I would assume that they regret it because they financed most, or all, of the purchase price.

They now cannot afford the annual dues...and cannot sell...because they would owe more money than they can sell the points for.

That is the problem with financing.

For those who truly can afford it...and do finance it but have cash on hand for emergencies...I'm sure financing is a minimal risk.

Unfortunately...I bet the statistics would show that the vast majority of those financing the DVC purchase are at a very high debt to income ratio and do not have much in the way of savings.

If someone loses a job...gets hours cut back...or has anything else go wrong...they are #^#$^.

That would be a very accurate assestment. Sadly some are overcome by the Disney magic and make a decision to buy while at Disney World and later realize that not everyone can afford it.

We paid cash for ours and if we had not been able to do that I would never have purchased. Because to us vacations are not a necessity and I only pay cash or we don't go.

For the accommidations, especially the one and two bedroom villas DVC can save you money over what Disney charges for a cash stay but I think their prices are highly inflated.

But there is definitely much cheaper ways to go to Disney especially if you stay off property where you can get houses for what Disney charges for a value resort.