Disney DVC Purchase Mortgage rate?

[jdkdorn]

This is a quetion for newer DVC owners who have a Loan/mortgage on your DVC through Disney.

What is the current rate they are charging?

Was there a reason you went through them instead of getting a loan elsewhere?

We are looking at buying and don't know whether we should wait and save up the money and buy resale or buy now and do it through a loan with Disney

Please help.

 

[Simba's Mom]

We just signed Sunday and sent the mortgage papers Monday. I think it was 11.5%-would have been 12.5% if we hadn't taken the direct deposit from our checking. We went with Disney for a couple reasons, main one by far was convenience. Once we decided for sure that this was what we were going to do, we didn't want to spend an extra second-"just do it". Also, I think Texas is (or at least it was) the only state which won't allow home equity loans (I heard law was passed years ago to prevent "mortgaging the farm"). I'm sure other Texans will correct me if I'm wrong. But the convenience was still the big plus.

 

[InstImpres]

They are currently at 10.95% with automatic debit of monthly payment

 

[tmli]

If you don't mind me asking what are their terms? Down payment amount? Monthly Payments? Length of loan?

Also I heard somewhere their loan was not available to those outside of the U.S. is this true?

I've been debating this back and forth with myself for over a year, its simply come down to finances now!

 

[anniet]

I purchased 150 points last March. Disney requires an initial 10% down and last March I got a 10.95% rate with automatic deductions from my savings account.

On Feb 4th, I called my guide to inquire about adding another 100 points. Again I needed to give them 10% down but the rate is now 11.5% even with automatic deductions from my account. I decided not to add-on now.

I financed through Disney because nobody in my area would write a loan for a timeshare. My credit was definitely not a problem and I had a high enough credit line on my Mastercard that I could have paid for DVC with my mastercard, but of course that rate was higher.

So since my bank wont make a personal loan for the amount that I needed and Massachusetts does not count it as real estate as Florida does, I couldn't get a mortgage, so I just kept the financing through DVC, and I am sending them extra money periodically to get the loan paid off in about 4 years instead of 10.

 

[tmli]

Thanks for the info anniet. I'm probably choosing Disney financing for the same reasons, nice to see I'm on the right page.

 

[GAIL HAYDEN]

The rate will depend on the amount of down payment. 10% down now gives you a 12.5% interest rate if automatically deducted from your checking or savings account. Not sure what 20% down gives you.

 

[DGuiltinan]

Did you say 12.5%??? People are financing there DVC purchase at 12.5%???

I cannot believe it. This is a complete rip-off in today's interest environment. This loan is secured, right?? The rate should be about half of what Disney is charging!!

Are there any outside lenders that market loans to DVC buyers at realistic interest rates?? Does the Timeshare Store offers financing? If so, what sort of rates do they charge??

 

[jel0511]

DGuiltinan - what you have to realize, while this is a real estate interest, this is not a home. It is a timeshare, and in the mortgage industry, the least risky loans are first mortgages on primary residences. Once you start getting into investment properties, secondary homes, etc., the risks to lenders escalates rather quickly. Also, I didn't finance any of my DVC purchases, but did do a little research. The best way to finance a DVC purchase is to take out a home equity loan on your home. You will obtain the lowest rate this way. And also Disney is actually one of the lowest rates available for timeshare purposes. If you look around there are a few lenders who will loan money for a timeshare purchase, and their rates are MUCH higher than Disney.

 

[CarolA]

When I used a resale financer the rate was higher than Disney. This does not really count as a mortgage rate loan. (you would have to ask a banker why) and seems to qualify more as a personal loan which is where the rates are. Keep in mind credit cards are more than 11.5% (unless you get intro rates and even then the wind up jumping to 10% or 15%) and car loans are being subsidized by the car makers. The best bet is a home equity which I have seen advertised in the 6 to 7%, but i have not really looked into it.

 

[poj7]

I agree with the previous reply. Home equity lines of credit are about prime minus .75 to prime minus 1. That comes out to 3.49%.

If you have equity in your home it's a great alternative to 12%. That's very high.

Paul

 

[DGuiltinan]

12% versus 4%.... That difference represents the decision to not buy versus the decision to buy.

I would never buy if I had to finance at 12%, I think that would make the annual point cost, even on a resale, of about $70 x 12% = $8.40, and maintenance of $4.00, total cost around $12.40 per point, more than I can rent for with no hassle...

At 4% the point cost would be $70 x 4% = $2.80 plus maintenance of $4.00 for a total point cost of around $7.00 per point, certainly much less than the $10 market rate on rentals...
The way I see it, if the interest rate exceeds 8%, you are better off not becoming a DVC member.....

 

[vanstoj]

we did use Disney financing because it was easy and also we had used our line of credit on our home to pay off the car and for the adoption of our daughter, however, we went into it with the understanding that when we get our tax refund next year (thank goodness for the adoption tax credit) that we would pay off the loan in full. Also, the interest is deductible which makes it more attractive than a credit card loan.