Credit requirements for DVC?

[beno44]

Doesnt the relative ease in renting points squash the risk factor somewhat???

 

[beno44]

Many forum members have tried to help you and/or provided detailed calcutions for you showing no savings with your strategy. I'll try one more time:

1. Cost of renting 160 points at $12 = $1,920, at $13 = $2,080

2. Buying 160 points would cost $1,008 (160*$6.30) in MF (in the first year and more in the second year) plus your estimated finance costs which you now estimate at $750/year for two years. That puts you at $1,758. You then have to add the purchase price of your points which adds about another $2 per point or $320 ($2*160). That now puts your total at $2,078 and is now a wash or costing you more and you still need to account for the opportunity cost of the time value of money. Where is your savings???????

If you remove the financing fees from your equation, you MIGHT be able to get ahead if you execute all other variables of buying the contract correctly. That's why it is being suggested that you rent, stay at a value/offsite, or don't vacation at all for the next two years until you can purchase the contract without $1,500 in financing fees (over two years) which will minimize your risks and provide the most savings IF that is your goal. If savings is not your goal and you just want to purchase a contract without taking the costs into consideration, then by all means, finance and spend as much as you want......just don't proclaim you're saving anything by going that route.

I am not doing a 2015 trip.. so if i end up buying a contract with 2015 points, those will be rented out for about $2k... or my cost will be reduced by $1008 if there are no 2015 points..

As for me renting points or staying value, thats apples to oranges.. increased risk my renting, no AP discount, lesser quality in accomodations etc..

 

[Dean]

But i think once I figure in cost savings of owning DVC and higher cost of renting points/ booking thru Disney in 2016 and 2017, i will be saving money..

And not borrowing $16K.. I am estimating total cost of about $14,500 for 160 points once I figure in $80/pt, closing costs and 2015 dues.. hoping by Oct have $4500 saved, so borrowing about $10K.. even at 8.9%, finance cost of about $1500? Feel like i can save $750 each trip in 16 and 17 by buying pts..

We wouldn't recommend rack rates or even discounted CRO for most situations, our comparison is to renting privately or throug a company that liason's with private renters. As I noted, every change in any number will change the specifics but not the principles. In some cases it might make sense for certain retail purchases or if you found a sweetheart deal and wanted to try your luck with RORF. For Monera, ad another $170 to that and for Timesharelending, another $200 or so. I'm not sure what lightstream charges for loan origination. I think you're overestimating your savings and underestimating the likely costs as well as the risks. At the end of the day it's not the worst decision but it's not the best either.

Doesnt the relative ease in renting points squash the risk factor somewhat???

IMO only somewhat in the short term and is only applicable if you antipate a short term issue or buy extra points.

I am not doing a 2015 trip.. so if i end up buying a contract with 2015 points, those will be rented out for about $2k... or my cost will be reduced by $1008 if there are no 2015 points..

As for me renting points or staying value, thats apples to oranges.. increased risk my renting, no AP discount, lesser quality in accomodations etc..

You might be able to rent out the points and reduce your costs by a modest amount. It only gains you the difference between the rental income and the taxes, fees and other minor costs associated, maybe $1K or less, not 2. And it's just as likely that SSR or AKV will go down in price in the interim as well. You've clearly made up your mind and will find any way attempt to justify your choice. For others reading, the best choice in this situation (assuming DVC makes sense otherwise) is to aggressively save and pay cash. Take the interim time to learn the system, it takes a good 6 months of active investigation to get to enough info to make a relatively informed decision. Once that happens, look for the right contract which is loaded, esp when you have the lead time to plan as in the scenario listed here. The choice of UY, home resort and appropriate sized contract is worths the time and effort IMO.