cash or financing?

[noahandcjsmom]

Are you buying with cash or did you finance? You can finance a resale, right? How does this work? We filled out an application online (timehsare store gave us the web address) and since we h avent yet chosen a specific location put undetermined. We also didnt have an exact loan amount but put $15,000 but in the notes added that it was undetermined at this time. They sent us an email telling us we needed to have the resort name and exact amount we needed, so we pick a resale first and then try for financing? I assumed you needed to be prequalified before making bids? We have excellent credit and can easily pay the down payment but didnt want to strip our savings and are willing to pay a little in interest to have that cushion.

So what is the deal?

And I know 3 questions in 2 days is alot buit its just so exciting.

 

[chalee94]

Are you buying with cash or did you finance?

i started small so i could pay cash.

You can finance a resale, right?

probably, but it will usually be an unsecured loan as timeshares don't historically retain their value well. expect interest rates from 11-15% or so even with good credit.

an unsecured loan also will typically not qualify for an interest deduction, so make sure you understand what you are getting.

 

[DVCconvert]

For myself personally, I'd never take on debt for a timeshare.
It's not an investment.

YMMV

 

[marynvince]

I moved that to a Disney visa transfer offer of 2.9% for life. Been paying $500 per month and will be paid off in 6 more months.
Unfortunately those cc deals no longer exist as they charge you a transfer fee of generally 5%.
Whatever works for you

 

[DisneyEater]

I would NOT recommend financing if you can avoid it. Pay cash and start small with resales and keep adding on until you have what you want. That is my advice.

 

[moericus]

I would NOT recommend financing if you can avoid it. Pay cash and start small with resales and keep adding on until you have what you want. That is my advice.

Agreed, if you don't have the money for it, you probably should not buy it. It is hard enough to gauge the value of timeshares. Financing them will almost certainly give you a loss in the long run.

Eliminate your short term debt and only have loans for your home, car, and education. Suzy Orman is the latest bearer of financial common sense.

I suggest renting points while saving up for your purchase, or buying a smaller contract with a banking/borrowing strategy until you can add-on.

 

[noahandcjsmom]

I would NOT recommend financing if you can avoid it. Pay cash and start small with resales and keep adding on until you have what you want. That is my advice.

I would of course pay cash if I had the cash but I do not. I figure we will start saving for our next vacation (we just returned and paid cash for that) and instead of just saving we can pay towards the membership instead that way we dont pay for another vaction without it going towards the membership. We have money in savings but I like to keep that in there. We could pay it off quickly though and definitely not 10 years.

 

[noahandcjsmom]

Agreed, if you don't have the money for it, you probably should not buy it. It is hard enough to gauge the value of timeshares. Financing them will almost certainly give you a loss in the long run.

Eliminate your short term debt and only have loans for your home, car, and education. Suzy Orman is the latest bearer of financial common sense.

I suggest renting points while saving up for your purchase, or buying a smaller contract with a banking/borrowing strategy until you can add-on.

We have no debt. We have no car payments. We can easily make the payments I just dont have that amount in savings at this time that I am WILLING to take out.

Well obviously I am just TRYING to talk myself into it. LOL I will think about what everyone is saying.

Thanks.

 

[kamik86]

I bought direct and financed through Disney. My purchase closed last June.

I know many say not to finance but for us we were planning 3 trips in the next year and 1/2 (2 of which we have now been on) one of which was a large 9 person gathering so it was nice to be able to use our points for those and save some money on the reservations. Add to that saving on the annual pass we bought and the savings on all the thing my husband buys (ok I"ll be honest really this one is getting more stuff for the amount of money he would spend anyway as he will spend the entire amount I will let him lol) and really it seemed like a good move.

That being said our 17K purchase that closed last June already only has 2.5K left on it. My goal and unless some emergency comes up we will make that goal is to have it paid off by the end of June (so we have 3 months). And in that time we got 2 extra vacations and the reservation for Sept (which I highly doubt we would have been able to get what I wanted if we waited to buy until June)

 

[marynvince]

there are smart ways to finance. And Suzie Orman is not all that.

Your kids are only young once and these early trips will be with them forever. my 5 year old has been to dland twice and the world 4 or 5 times (and we live in OH).

If you wait until you save cash, the kids will be older.

Would also suggest HHI, we purchased resale points there recently as it is drivable (12 hours) for us and a great resort. We also own at SSR and have been there, BWV(liked), BCV(Not a big fan) OKW(really liked)and BLT (not a fan, too much like a hotel for my tastes)

We bought direct before we knew about resale. We could have saved alot going resale, so that's my only regret. Good Luck with your decision.

 

[crisi]

If you are financing a resale, it will depend on how you finance.

We didn't have a loan for long, but we did take money from our home equity line of credit for about eight days waiting for a bonus check to arrive. A home equity line of credit would not involve needing any justification for getting the money at all. I can write a check on my HELOC any time I want for anything I want.

Likewise, people have been known to put a resale purchase on a low interest credit card - again, you won't need any thing except the advance.

But if you want to take out a loan specifically for the purchase, you'll make an offer and then arrange financing - generally speaking.

Some timeshare resale companies work with lenders to provide financing. Some do not. Or you can work with your local bank.

 

[noahandcjsmom]

Ok so you all got me thinking and I checked two of the sites for resales and neither had 50 points which we could pay cash easily that were not too high on the cost per point. I can get for instance SSR for $78 per point with 200 points or I can get 50 points for $90 per point. I'd rather get the much lower cost per point, I think. UGGHHH This is all so confusing and great at the same time.

 

[DisneyEater]

Ok so you all got me thinking and I checked two of the sites for resales and neither had 50 points which we could pay cash easily that were not too high on the cost per point. I can get for instance SSR for $78 per point with 200 points or I can get 50 points for $90 per point. I'd rather get the much lower cost per point, I think. UGGHHH This is all so confusing and great at the same time.

You can make an offer lower than the asking price. Many people do. $90 is pretty unreasonable and with the recent resale restrictions, I wouldn't go anywhere near that much. Offer what you are willing to pay for that contract and see what they say. Worst they can do is say no.

 

[DVCconvert]

If I'm not mistaken, SSR contracts have recently passed ROFR
priced in the mid $60's.

 

[noahandcjsmom]

You can make an offer lower than the asking price. Many people do. $90 is pretty unreasonable and with the recent resale restrictions, I wouldn't go anywhere near that much. Offer what you are willing to pay for that contract and see what they say. Worst they can do is say no.

Yes. I had no intention of offering full asking price. That was a for instance example. If I intend to make an offer on SSR listed at $78 per point we would offer maybe $72 per point where as if we are making an offer on BLT listed at $90 per point we would ofer $84 per point (as an exapmple). Obviously SSR will be lower no matter how you slice it. I just didn't want to pay signifigantly more per point just to not have to get a loan when the loan wouldn't be for that long anyways. This is currently my line of thinking but it changes by the minute

 

[ORD2KOA]

For myself personally, I'd never take on debt for a timeshare.
It's not an investment.

YMMV

I agree with this, but I also agree with putting it on a low-interest credit card. It makes no sense to pay 12% interest.

If you feel that you would be able to pay it off quickly, that means you can save for it quickly.

 

[moericus]

Did you have a favorite resort? Everyone always says buy where you want to stay. I've seen a lot of threads saying it has been tougher to get a different resort at the 7 month window.

 

[Kidanifan08]

We financed a direct purchase through DVC and have paid some interest over the past 2 years, but like a PP commented, we did not want to wait to save up the cash, since our son is only young once. We have enjoyed our membership to the fullest, and in fact we are paying cash for a 50 point resale add-on this week. We plan to pay off our DVC loan this month.

If you are considering doing a series of small purchases, just remember that the closing costs could add up if you do 2-3 of those over the next 5-6 years, and it is not always easy to find the resale you want with the UY you are looking for, so it could take longer than you think. Our add-on is a different UY than our original contract, but I wanted a small contract at AKV and wanted to get it before 3/20 -- so I did not have the luxury to look for awhile.

Only you know what financial risk you are able to take on a purchase like this. There are some people in this world who wouldn't consider financing anything other than a house, and that works for them. Do what works for you.

Good luck with your decision!

 

[marynvince]

or better. On recently passed for 48. check out the following thread if you havent already. http://www.disboards.com/showthread.php?t=2661661

 

[DVCconvert]

I agree with this, but I also agree with putting it on a low-interest credit card. It makes no sense to pay 12% interest.

If you feel that you would be able to pay it off quickly, that means you can save for it quickly.

I agree with you, but, again - speaking personally, I'd want the "deal" to be guaranteed for the life of the balance. One never knows the turns life can throw at you a few years down the road, not all of which might be good.