Direct Purchase Financing

[davidl81]

We financed our purchase 25 years ago through Disney. At the time, the interest rates weren't that far off the rates of those days but 14.99 seems VERY high to me with rates today.

We paid our loan off early, and the price was so low at $62 a point it was only a 5 year loan anyway.

People on these boards will argue with you saying you can't afford it if you have to finance, but we didn't find that true at all. We bought before we had kids and we both had high paying jobs. It has worked out absolutely perfectly.

Financing from Disney was super super easy and immediate.

Same here. We bought 12 years ago at AKV for around $95 a point. If we would have waited and saved the money we would have been closer to $130pp. We paid it off in 4 years and basically the interest matched the rate of the direct price increases. It worked out fine for us.

 

[Grumpy Mouse]

Same here. We bought 12 years ago at AKV for around $95 a point. If we would have waited and saved the money we would have been closer to $130pp. We paid it off in 4 years and basically the interest matched the rate of the direct price increases. It worked out fine for us.

But the rate matters - and matters a lot.

With your situation, if you say bought 200 points at $95 a point with that ridiculous 15% interest rate, you'd have paid nearly $6,400 in interest over just 4 years - making your true cost per point almost $127.

If you took 10 years to pay off this loan - you'd have paid the equivalent of $184 (!!) a point.

DO NOT FINANCE.

But if you have to, make sure you do the math to ensure you're not sacrificing your kids' college education for their vacation. The interest rate matters - but most of the time, it's a bad deal.

Even at 10% over 10 years, you'd still have paid almost $151 a point.

 

[OKWFan88]

We financed with Disney on our first OKW 150pt contract a month ago. 9.99% rate with 20% down. We had the cash to pay it all up front but we prefer flexibility even if it costs us more. We will have the loan paid off in less than a year with the residual income we have after bills are paid. We didn't want to put the purchase on a credit card with 0% interest as that has affected our credit scores in the past. We made a large purchase previously using credit cards with 0% interest and our credit scores dipped considerably. Now when we paid it off, our scores eventually went back up, but the card we used ended up lowering our credit line after that. No clue why, since we were never late paying and paid the debt off before the 0% offer ran out... So, personally we didn't want to go down that road again. We do like that the loan isn't reported to the credit bureaus.

Everyone is different and people might shake their head at us financing but we know it will be paid off in 11 months and paying a year of interest isn't making us stay up at night. Our happy place is Disney and we go 3-4 times a year and we are about an 8 hour drive away in NC. Choosing financing made sense for our situation and yes the rate isn't ideal but again it will be paid off in 11 months vs 10 years. It's important that in any financial transaction you need to be looking at all options, determining the best fit for your family and understanding all the pros and cons. Life is short. Enjoy it to the fullest

 

[davidl81]

But the rate matters - and matters a lot.

With your situation, if you say bought 200 points at $95 a point with that ridiculous 15% interest rate, you'd have paid nearly $6,400 in interest over just 4 years - making your true cost per point almost $127.

If you took 10 years to pay off this loan - you'd have paid the equivalent of $184 (!!) a point.

DO NOT FINANCE.

But if you have to, make sure you do the math to ensure you're not sacrificing your kids' college education for their vacation. The interest rate matters - but most of the time, it's a bad deal.

Even at 10% over 10 years, you'd still have paid almost $151 a point.

Yes, but even using the 15% math as your example we still would have came out basically even given the buy in cost and the direct price increases. I want to say we were at 9% or so since we put 20% down but I don’t remember exactly. And even if I would have ended up spending 10% more in total cost the buy in cost ends up being a fairly small part of the overall DVC cost that it really does not make much of a difference.

 

[benedib99]

I see this a lot, and while I don’t completely disagree the idea of it, there‘s much more to the equation than just paying cash. For example, we financed our resale through Lightstream because most of our discretionary cash was tied up in stock during a downturn in the market, I’d rather pay some interest than sell off stocks at a loss just so I could say I paid cash for a luxury item. And we ended up paying it off in about 5 months.

Also this mindset is essentially saying “if you can’t afford to pay for your next 50 years of vacations in cash now, than you can’t afford to vacation.” Sure, if you are retired and don’t have earnings coming in other than your retirement investments, I’d agree, you can’t afford to pay interest for a luxury item. But someone who is still working, earning money, might not have a lump sum of 30 grand in their account they can afford to just lay down for future vacations, but they surely can afford a reasonable interest rate that still will save them money over the long haul. Another example, were you to buy 150 points at RIV direct today, you’d get the $2250 incentive discount. On a Lightstream loan for 3 years at 5.99%, paid off in just over 2 years you’d pay a similar amount in interest to the incentive. If you saved for 2 years then bought, will the incentive be there? Mostly likely not. Will the current prices remain the same for those 2 years? Absolutely not. My point is, there are situations and math that can support that financing isn’t the bad deal everyone plays it up to be. If all things were equal, sure, pay cash, but they aren’t, so sometimes reasonable financing makes sense.

Two caveats, Disney financing is not reasonable, nor is paying it off over 10 years.

I‘ll add another vote for looking into Lightstream, super easy, they’ll send you the money the same day at reasonable rates. Also, remember, Disney will let you split up your direct payments over 90 days.

I agree with you on all points!!! I used LightStream for one of my purchases, and have no regrets since it allowed us to pick up Grand Floridian in the $150's.

 

[RoseGold]

Yes, but even using the 15% math as your example we still would have came out basically even given the buy in cost and the direct price increases. I want to say we were at 9% or so since we put 20% down but I don’t remember exactly. And even if I would have ended up spending 10% more in total cost the buy in cost ends up being a fairly small part of the overall DVC cost that it really does not make much of a difference.

Current pricing might not reflect it, but these are depreciating assets by definition because they have expiration dates. Sure, you got lucky and the last year has been a crazy increase. Let's say the summer 2020 prices stuck and they decreased, you'd be out thousands of dollars.

Heck, let's say the prices just stayed the same, certainly possible. You'd pay 15% plus financing charges for something you could have just waited a year to buy, which is what I would argue the current situation is with resale picked dry and crazy all-time high.

Heck, I'd argue resale will soften in a couple years and there will be deals again, like there were when I bought.

 

[davidl81]

Current pricing might not reflect it, but these are depreciating assets by definition because they have expiration dates. Sure, you got lucky and the last year has been a crazy increase. Let's say the summer 2020 prices stuck and they decreased, you'd be out thousands of dollars.

Heck, let's say the prices just stayed the same, certainly possible. You'd pay 15% plus financing charges for something you could have just waited a year to buy, which is what I would argue the current situation is with resale picked dry and crazy all-time high.

Heck, I'd argue resale will soften in a couple years and there will be deals again, like there were when I bought.

Resale is slightly different than direct, but historically it still holds true. DVC prices have increased over time. So if buying direct financing at 9% or so could somewhat make sense as opposed to saving up and paying cash. Also any of us may lose “thousands” if resale prices drop, but we still buy them.

 

[Red Dog Run]

If you get a guide that doesn't want to let you do 90 day payments get a new guide. I have come to learn that it is luck of the draw if you get a guide that knows what they are doing or one that doesn't know anything. I had a guide tell me I can't buy 25 points cash AKV add on and I can't do 90 days on any size contract. Called and got a new guide and everything was extremely smooth. I have now used my sales guide twice and just recently added on and did the 90 days payment.

Agree. It was a non-issue when I asked my guide to spilt into 90 days. First, 20 percent down payment. Second - next billing cycle was 1/2 of the balance. Next billing cycle was the final portion. It was also right before the change for blue card 100 to 125 points. I locked in with the contract and then took 90 days. It gave me the extra month I actually needed to pay off the 100 pts at OKW. Plus, I got 2 times the reward points and earned dues money.

 

[Sandisw]

If you put the purchase on a Disney Visa for the 6 months, can you then transfer it to Lightstream? Or will they only finance at the onset of the contract?

Exactly what we did. We used them as a bridge while waiting for the proceeds on a sale, which was after the 7 months we got free via Disney..we had them charge the bulk 30 days later.

Pretty simple.

 

[Astylla]

So after months of research and thanks to this thread I discovered that you can buy direct through Disney and not have to use their financing.

Little backstory : Husband had a vacation home left to him and his brother in a trust after his dad passed unexpectedly. Due to upkeep and other reasons the house was sold and payment split 50/50. We used half of our share to eliminate all debt ( credit cards , cars paid off , we rent but that's fine) and he invested a good amount and we fully padded our savings account.
We live quite comfortably as we both have government jobs with the same county and I have overtime available to me. We are a childfree couple as well.

I discovered the incentive for buying into Riviera which has always appealed to me and see it ends soon , so even though our credit scores have not fully updated to show full zero balances , we have been approved through Lighstream for $30k. The rate is 10% and honestly much lower than I expected..however wonder if this is neogtiable as our true debt to income ratio isn't being relfected due to the time it takes for bureaus to update. I've been renting points for over a year now , took 5 WDW trips in less than a year and honestly have run the numbers ten times sideways and feel even at this point it would make sense..we are looking to buy about 200 points. I put in a 60 month loan term but EASILY plan to pay it off in two to three at MOST.

We have a Disney Premier Visa but only a 6k credit limit but am gunshy about asking about a credit increase until everything " catches up".
We have other cards SW Priority 10k , Wells Fargo 10k and Discover 13.5k limits respectively so kind of new to how we can game any points or cash back..

 

[Rush]

So after months of research and thanks to this thread I discovered that you can buy direct through Disney and not have to use their financing.

Little backstory : Husband had a vacation home left to him and his brother in a trust after his dad passed unexpectedly. Due to upkeep and other reasons the house was sold and payment split 50/50. We used half of our share to eliminate all debt ( credit cards , cars paid off , we rent but that's fine) and he invested a good amount and we fully padded our savings account.
We live quite comfortably as we both have government jobs with the same county and I have overtime available to me. We are a childfree couple as well.

I discovered the incentive for buying into Riviera which has always appealed to me and see it ends soon , so even though our credit scores have not fully updated to show full zero balances , we have been approved through Lighstream for $30k. The rate is 10% and honestly much lower than I expected..however wonder if this is neogtiable as our true debt to income ratio isn't being relfected due to the time it takes for bureaus to update. I've been renting points for over a year now , took 5 WDW trips in less than a year and honestly have run the numbers ten times sideways and feel even at this point it would make sense..we are looking to buy about 200 points. I put in a 60 month loan term but EASILY plan to pay it off in two to three at MOST.

We have a Disney Premier Visa but only a 6k credit limit but am gunshy about asking about a credit increase until everything " catches up".
We have other cards SW Priority 10k , Wells Fargo 10k and Discover 13.5k limits respectively so kind of new to how we can game any points or cash back..

Here would be my advice, but of course I’m a stranger on an internet forum, so it’s worth what you’ve paid for it.

At 60 months the rate range is 7.24%-17.24%, so if you were given 10%, you aren’t at the prime end of that scale, but certainly in the low end based on your credit. I don’t know if it’s negotiable since it’s all pretty automated, but you can perhaps try and explain the situation, although I don’t see how they could change it until your score reflects your debt payoff and they do another hard credit pull, which will in turn affect your score, albeit only slightly.

Your best bet, if you can swing it, change the term to 36 months, that puts you in the best rate category, 5.99-16.49%, and would likely bring the rate down to 7-8% based on your current score. Only you know if you can swing that, but if you say you can easily pay it off in 24-36 months then why not benefit from the lower rate while doing so. A rate of 7.49% for 36 months saves you $1200 in interest and payment is $55 less per month vs. 9.99% for 60 months paid off in 36. That alone essentially gives back $6 per point of the incentive.

But listen, you can get 9.99% at Monera without a credit check, people do it all the time, and I don’t believe they report to the credit agencies. The recommendations and purpose for using Lightstream is to get the best score out there for financing a timeshare, short of paying cash, a 0% interest CC or a Heloc. If you aren’t going to get a better rate than I’m not sure Lightstream is your best option.

If it were me, I’d change the term to 36 months to get the best rate and don’t pay it off in what’s easy. Tighten the straps and pay it off in what would be a challenge. If you really want it, and it’s worth it to you, make it a priority and pay it off in 12-24 months tops.

 

[T-i-double-guh-er]

But listen, you can get 9.99% at Monera without a credit check, people do it all the time, and I don’t believe they report to the credit agencies. The recommendations and purpose for using Lightstream is to get the best score out there for financing a timeshare, short of paying cash, a 0% interest CC or a Heloc. If you aren’t going to get a better rate than I’m not sure Lightstream is your best option.

I'm not sure if Monera finances direct purchases, I know Lightstream can be used for direct or resale.

I think the advantage to Lightstream over Monera is that Monera records a mortgage against the real estate interest, while Lightstream does not. Closing costs would be a little higher and a notary would be required going through Monera. Monera also charges a $199 loan origination fee, I don't think Lighstream does. Lightstream just deposits the money in your account, no lien or mortgage.

Lightstream does report to credit bureaus and Monera does not though, so it's a tradeoff.

 

[Rush]

I'm not sure if Monera finances direct purchases, I know Lightstream can be used for direct or resale.

I think the advantage to Lightstream over Monera is that Monera records a mortgage against the real estate interest, while Lightstream does not. Closing costs would be a little higher and a notary would be required going through Monera. Monera also charges a $199 loan origination fee, I don't think Lighstream does. Lightstream just deposits the money in your account, no lien or mortgage.

Lightstream does report to credit bureaus and Monera does not though, so it's a tradeoff.

Good points. I’ve never considered using Monera, so I hadn’t researched if they will finance for direct purchases.

 

[EYL]

Good points. I’ve never considered using Monera, so I hadn’t researched if they will finance for direct purchases.

With a recorded mortgage, you might also be able to deduct the interest from your taxes. At 10% from Lightstream, the other options may be more worthwhile for you.

 

[Red Dog Run]

Exactly what we did. We used them as a bridge while waiting for the proceeds on a sale, which was after the 7 months we got free via Disney..we had them charge the bulk 30 days later.

Pretty simple.

Yes! I did this too, and it gave me the time I needed to arrange the payoff. And points, too. But is was soooo easy which is too tempting.