Disney Credit Primer

[Stargazer65]

Do you qualify for credit through Disney to purchase a direct DVC contract? There is an easy way to find out ahead of time. Follow these instructions to do a self check of your credit to obtain DVC financing through Disney:

• Go to your bathroom mirror and verify it is relatively cool and clean
• Place your mouth about 1 inch from the mirror
• Exhale onto the mirror for about 3-5 seconds
• Is your breath fogging the mirror?
  • Yes – Congratulations! You qualify for Disney credit
  • No – You inhaled. You were supposed to exhale. That’s okay, you don’t have to be smart. Congratulations, you qualify for Disney credit!

 

[UofMGuy423]

Honestly, they could probably sell a ton of points with low financing, like 4%. Their overhead and risk is so minimal for them as all they have to do is foreclose on "points" for non-payment and they throw them back in the system for full price. There's no brick and mortar home they have to deal with, family evictions, etc. .

 

[Brian Noble]

like 4%.

There isn't anyone who is going to lend you money at 4% right now, for anything. A 2-year treasury bond pays 3%, and that's tax-free. Prime is 5.5%.

Yes, they can foreclose, but (a) that's a heavyweight process and (b) unsold points aren't worth much because it takes a lot of work to sell points. Having to sell them twice is worse than only selling them once.

 

[Huskerpaul]

I read that the Developer often makes more money on the financing of sales of timeshares than the actual sales themselves.

 

[pianomanzano]

I read that the Developer often makes more money on the financing of sales of timeshares than the actual sales themselves.

Someone posted the finance statement from their recent DVC purchase on FB and their rate was a whopping 18.9%. Paying the minimum on a 150 point purchase with 10% down comes out to like 35k in interest (on a 31k initial purchase price). I'm sure most people who finance in 10 years will pay it down early, but they definitely make a ton of money of financing alone.

 

[Huskerpaul]

Someone posted the finance statement from their recent DVC purchase on FB and their rate was a whopping 18.9%. Paying the minimum on a 150 point purchase with 10% down comes out to like 35k in interest (on a 31k initial purchase price). I'm sure most people who finance in 10 years will pay it down early, but they definitely make a ton of money of financing alone.

And it is almost all profit. Sales of points has costs associated with building the facility and staffing and other sales costs.

 

[UofMGuy423]

There isn't anyone who is going to lend you money at 4% right now, for anything. A 2-year treasury bond pays 3%, and that's tax-free. Prime is 5.5%.

Yes, they can foreclose, but (a) that's a heavyweight process and (b) unsold points aren't worth much because it takes a lot of work to sell points. Having to sell them twice is worse than only selling them once.

I just threw a number out there. Even if they went with whatever mortgage rates are currently, it would be considerably less than 15%. But as others have said, they must make more on the financing side of things than selling the contracts themselves.

Foreclosure on a time share isn't a heavyweight process. It's why they approve anyone with a heartbeat because they know they can pull the points back pretty easily.

 

[badeacon]

There isn't anyone who is going to lend you money at 4% right now, for anything. A 2-year treasury bond pays 3%, and that's tax-free. Prime is 5.5%.

Yes, they can foreclose, but (a) that's a heavyweight process and (b) unsold points aren't worth much because it takes a lot of work to sell points. Having to sell them twice is worse than only selling them once.

Well , GM is offering 0% for a Buick SUV at this time and many auto loan companies have 2-4 % interest rates so maybe bundle buying auto with DVC for better rate

 

[Brian Noble]

Foreclosure on a time share isn't a heavyweight process.

Even the non-judicial foreclosure process for FL timeshares takes time and effort. It's not just the company canceling your membership.

(As an aside, this is one of the reasons that Wyndham has moved away from deeded real estate and to a trust-based model; in that model, they can just cancel your ownership if you stop paying, and they can do it quickly.)

 

[Brian Noble]

GM is offering 0% for a Buick SUV

Yeah, but then you own a Buick.

 

[NVDISFamily]

Disney will have to justify the discount rate to their auditors and any amount under the reasonable market rate will be considered a cost/expense to sell the product and this will impact the bottom line.

 

[Nursemanit]

There isn't anyone who is going to lend you money at 4% right now, for anything. A 2-year treasury bond pays 3%, and that's tax-free. Prime is 5.5%.

Yes, they can foreclose, but (a) that's a heavyweight process and (b) unsold points aren't worth much because it takes a lot of work to sell points. Having to sell them twice is worse than only selling them once.

Right now with an 830, Amex is 6.89% for an unsecured loan - That was the best I could find without using a HELOC.

Yeah, but then you own a Buick.

I was holding myself back from posting that same comment ...

 

[RoseGold]

Someone posted the finance statement from their recent DVC purchase on FB and their rate was a whopping 18.9%. Paying the minimum on a 150 point purchase with 10% down comes out to like 35k in interest (on a 31k initial purchase price). I'm sure most people who finance in 10 years will pay it down early, but they definitely make a ton of money of financing alone.

When i see things like this, it really makes me side-eye things like the resale point borrowing "glitch," which I'm still not sure is fixed.

I couldn't sleep at night if I sold someone that.

 

[bumbershoot]

Someone posted the finance statement from their recent DVC purchase on FB and their rate was a whopping 18.9%.

Who did they finance with?

I'm sure most people who finance in 10 years will pay it down early, but they definitely make a ton of money of financing alone.

No doubt. AND for the payer it can be well worth it to pay more to own NOW, rather than later.

 

[badeacon]

There isn't anyone who is going to lend you money at 4% right now, for anything.

This is what I was responding to and I found something!!

 

[pianomanzano]

Who did they finance with?

Direct through Disney

 

[Nursemanit]

Direct through Disney

But the incentives....