DVC as collateral ??

[GrimGhost]

Does anyone out there know if "points" can be used to guarantee a loan, ie; home equity loan, line of credit, etc. ??

 

[msdis]

I would say yes, I currently work in that field and you would be surprised what is accepted as collateral. I'm sure it will depend on then institute and their terms but it is a real possibility.

 

[GrimGhost]

Thanks msdis..Anyone else out there have any insight??

 

[Werner Weiss]

Originally posted by GrimGhost
Does anyone out there know if "points" can be used to guarantee a loan, ie; home equity loan, line of credit, etc. ??

The "points" are just a convenient way of representing the actual deeded real estate lease for the purpose of allowing DVC members to make reservations. That deeded ownership has a genuine market value, and there may be lenders who accept it as collateral. Considering that many other timeshares are worth only a fraction of their original purchase price and are difficult to resell, it make take some effort to convince a lendor of the actual market value of a DVC ownership interest.

One important thing would be a to refer to the deeded ownership, not to the DVC "points."

 

[eva]

I could be wrong but, if you still owe on the points couldn't it actually do more harm than good? If you borrowed from DVC the loan will not show up in a credit check, therefore giving you a better debt ratio. If you claim it the loan might somehow end up on the paperwork for the mortgage. I'm not sure how it would show up, but they may contact DVC if you claim it as collateral and then they may also find out that you still owe on the points. If you don't owe on them then I would definitely try to claim it.

 

[MikeScott8]

It will depend on the bank. I know I asked about it and was told since it was so far away, they would not take it as collateral.

Of course I have a small local bank, so they are not familiar with DVC, and no branches in FLA, so they said if I were to default it woould be too expensive for them to take it and get money for it.

I am sure I could have educated them about the value of DVC and the reslae market for it, but I was not really that interested in the loan, so I let it go.

Mike

 

[TheRustyScupper]

If the lender reads the agreement, the short answer is "no".

1) DVC is a deeded interest, and not deeded property.
2) It may have value for the purchaser, but no "worth".
3) The lien-holder can't collect or foreclose. **
4) Additionally, DVC has ROFR.
5) The ROFR could mess the lien process terribly.

** This is why when mortgaging outside of WDW, you use either your home as a secured second mortgage or a personal line of credit.

 

[Halle]

Mike, could the bank be Canandaigua National ??

 

[MikeScott8]

Originally posted by Halle
Mike, could the bank be Canandaigua National ??

YUP!

Mike