DVC financial questions

[Br'erBriere]

Hi,

I will be in Disney in 2 weeks and plan on attending the walkthrough.

I am the kind of person who watches every penny and really analizes (most of the time) before he buys.


That said, I could really use some answers to the costs associated with buying DVC. I understand the prices may vary so I am just in need of ballpark figures and can do my own math from there.


How much is the down payment?

How much is the cost of dvc?

What is the average monthly payment?

How long do you pay it off? 5, 10, 15 years?

Cost of dues?

Any other figures you can add would be appreciated.


We normally stay at a value or moderate once a year currently. In a year and half or two years I see us traveling to disney twice a year.

 

[GoofItUp]

A lot of it is dependent on where you buy, how many points you want, etc. I believe Disney requires a 10% down payment. Points are starting at around $93 or so with a member referral which you can get off of the member referral thread on this board. Financing through Disney is for 10 years but can be paid off early with no penalty. And, dues are anywhere from $3.67 (BLT) to well over $5.00.

That said, you might also want to consider resale contracts in your cost analysis. You can see lots of contract listed on dvc-resales.com which is also the sponsor of this board. You can also look at the thread on this board showing what's passed ROFR to get an idea of what those contracts are going for.

Finally, for another cost analysis you might check with your local banker to see what kind of financing they can do. We are buying our first resale contract and are financing it through our local bank for 6% with payments being due every 6 months which works better for our financial situation. So, that might be another option to consider.

 

[Sandisw]

Welcome. The down payment is typically 10% but I have heard that sometimes they require 15 - 20% with certain incentives.

The cost of DVC really depends on the home resort that you buy. However, since the minimum # of points you can buy through Disney is 160, you are looking at around $15,000 - $17,000 from the start. Now, they had been allowing new members to buy in at AKV for only 100 points to start but not sure if that is still going on--if it is, you could get in direct through Disney to closer to $10,000 - $11,000. But, the price per point, right now is $112.00, before incentives. With incentives (including have a member referral), you can get 160 points at AKV for around $93.00 per point or BLT @ $101.00 per point. These are rumored to end around the 20th of August so there could be better ones by the time you go.

Dues range at WDW from a low of around $3.67 per point at BLT to around $5.00 - $6.00 per point for some of the other resorts.

Disney offers financing for 5 to 10 years at rates around 10.75% (preferred with direct debit) or 14.25% (standard with direct debit). I believe if you put down 50%, you can get financing for a year for around 5%.

If you financed $16,000 @ the 10.75% rate, your monthly payment would be around $219.00 per month, plus the cost of the dues.

Now, there is a resale market out there that can save you money if you want some of the older resorts. SSR right now is a great deal going that route. If this is a resort that interests you, I would definitely investigate this option as well!

Good luck!

 

[chalee94]

That said, I could really use some answers to the costs associated with buying DVC. I understand the prices may vary so I am just in need of ballpark figures and can do my own math from there.

here is current pricing for contracts purchased directly. you will find a link to resale contract listings in the top righthand corner of the screen. in my case, i started with a smaller resale contract so i could avoid having to finance the purchase...so i don't know much about direct purchasing - you can put part of your downpayment on your disney VISA and the downpayment required is around 10%...i think the financing rate starts at 10.75%.

here is a link to historical annual dues for the different DVC resorts.

here is a thread for more info about choosing a home resort.

and if you get serious about buying and are ready for slightly more advanced information:

here is a thread for understanding use year.

We normally stay at a value or moderate once a year currently. In a year and half or two years I see us traveling to disney twice a year.

if you usually prefer to stay at a value or mod, you probably won't see much financial benefit from DVC.

 

[Lynne M]

We normally stay at a value or moderate once a year currently. In a year and half or two years I see us traveling to disney twice a year.

DVC is a way to pre-pay for villa-style accommodations at deluxe-level resorts. It's most definitely not a low cost way to stay at WDW.

If you've decided that you want the multi-room villas, and you compare the cost of those villas through DVC with the cash reservation cost, you'll definitely come out ahead with DVC.

If you want to stay in studios, and you compare the cost of a studio through DVC with a cash reservation for a studio or a room at a deluxe resort, you'll definitely come out ahead with DVC.

If you compare the cost of any villa or studio with DVC to the cost of a value room.....DVC is going to cost you way, way more.

A lot of the cost depends on the size of your family, and therefore which size villa you'd be using. If it's just two of you, and you'd typically stay in studios, your buy-in cost can be a lot less than a family of, say, 6, that would need a 2-bedroom villa.

 

[Br'erBriere]

Thanks all!


So is it safe to assume monthly cost would be as much as (roughly) $250 per month for 160 points at $117 per point at 10.75% interest through disney without discounts

and

as low as (roughly) $100 monthly for 100-160 points @ 6% interest via resale?


If so, thats really not bad at all!

 

[ToddyLu]

You can get a referral and that will drop your cost per point direct from Disney. We bought direct in June 210 points at AKV with a member referral($94 per point, $18 discount), our monthly is about $230, with monthly MF about $80. We put 10% down on Disney Visa and got the preferred 10 yr loan...with expectation to pay it off early. We have never stayed in a deluxe resort and go to Disney for at least 10 days every year. I am really excited about our first trip in oct. it was a lifetime luxury purchase for us, and I am so lucky my DH supported it as well. We are going from a room at Pop to a studio SV at AKV.

 

[lark]

Thanks all!


So is it safe to assume monthly cost would be as much as (roughly) $250 per month for 160 points at $117 per point at 10.75% interest through disney without discounts

and

as low as (roughly) $100 monthly for 100-160 points @ 6% interest via resale?


If so, thats really not bad at all!

I think points are $112 through disney, not $117. And nobody really pays $112 anyway -- there is always some incentive available that will save you at least a few dollars per point.

One item to add is that whatever the incentive, disney's down payment requirement is calculated on the nondiscounted price per point ($112). Just to give you an example, right now with incentives, you can get VGC points directly from disney for $88/point. Accordingly, a 200 point contract would cost you $17,600. (I'm leaving out closing costs for purposes of the analysis.) Your downpayment, however, would a percentage of the total nondiscounted price -- $22,400. So, for a 10 percent downpayment, you'd have to pay $2,240. So, your "real" downpayment comes out higher than 10 percent of the true purchase price.

Closing costs through disney depend on whether you finance or not. If you pay cash, closing costs are in the $250 range. If you finance, more like $345. (This is because if you finance disney needs also to record your mortgage and pay a filing fee to the county recorder.) Closing costs buying resale are bit more and can escalate depending on how many points you're buying. One other thing to factor in is that financing a resale purchase may subject you to different terms -- for example, some lenders only give their preferred rates if you agree to pay a prepayment penalty if you pay off the loan in a particular period of time. (So, for example, they can guarantee at least 2 years of interest, etc.)

So, putting it all together, to purcahse 160 points today in BLT, you would pay $101 per point with an owner referral. That's $16,160. Closing costs, assuming you finance through disney, would be about $345, for a total of $16,505. Assuming you qualify for a minimum downpayment of 10 percent, your down payment would be $1792 (or $112 x 160 x .10). You would be financing $14,713. At the "preferred" rate of 10.75 percent, your monthly payment would be $200.60 for 10 years. (So, if you made only monthly payments and did not prepay, over the life of the loan, you would pay $24,072, or $14,713 in principal and $9359 in interest). Your points would be available immediately upon commitment, and you would receive all of your 2009 points. You would owe dues of about $240 for the remainder of 2009, which would be payable soon, and $587.20 for 2010, which would be payable early next year. You can also pay dues monthly. This should give you a good baseline for comparison to a resale.

 

[Br'erBriere]

I think points are $112 through disney, not $117. And nobody really pays $112 anyway -- there is always some incentive available that will save you at least a few dollars per point.

One item to add is that whatever the incentive, disney's down payment requirement is calculated on the nondiscounted price per point ($112). Just to give you an example, right now with incentives, you can get VGC points directly from disney for $88/point. Accordingly, a 200 point contract would cost you $17,600. (I'm leaving out closing costs for purposes of the analysis.) Your downpayment, however, would a percentage of the total nondiscounted price -- $22,400. So, for a 10 percent downpayment, you'd have to pay $2,240. So, your "real" downpayment comes out higher than 10 percent of the true purchase price.

Closing costs through disney depend on whether you finance or not. If you pay cash, closing costs are in the $250 range. If you finance, more like $345. (This is because if you finance disney needs also to record your mortgage and pay a filing fee to the county recorder.) Closing costs buying resale are bit more and can escalate depending on how many points you're buying. One other thing to factor in is that financing a resale purchase may subject you to different terms -- for example, some lenders only give their preferred rates if you agree to pay a prepayment penalty if you pay off the loan in a particular period of time. (So, for example, they can guarantee at least 2 years of interest, etc.)

So, putting it all together, to purcahse 160 points today in BLT, you would pay $101 per point with an owner referral. That's $16,160. Closing costs, assuming you finance through disney, would be about $345, for a total of $16,505. Assuming you qualify for a minimum downpayment of 10 percent, your down payment would be $1792 (or $112 x 160 x .10). You would be financing $14,713. At the "preferred" rate of 10.75 percent, your monthly payment would be $200.60 for 10 years. (So, if you made only monthly payments and did not prepay, over the life of the loan, you would pay $24,072, or $14,713 in principal and $9359 in interest). Your points would be available immediately upon commitment, and you would receive all of your 2009 points. You would owe dues of about $240 for the remainder of 2009, which would be payable soon, and $587.20 for 2010, which would be payable early next year. You can also pay dues monthly. This should give you a good baseline for comparison to a resale.

Wow thanks for the breakdown! That's awesome. I am honestly shocked at how affordable this can be through disney and even more so through resale. Though I imagine through resale you have to get a loan from the bank instead of through disney right?

 

[Sandisw]

Wow thanks for the breakdown! That's awesome. I am honestly shocked at how affordable this can be through disney and even more so through resale. Though I imagine through resale you have to get a loan from the bank instead of through disney right?

Yes, when buying through resale, you need to arrange your own financing. Although some of the resale brokers may be able to get you in contact with someone who can provide it. I know there was a company that the TSS was using but not sure if that company is still loaning for timeshares--but, there terms were not as great as Disney, at least in term of length.

Good luck!

 

[Br'erBriere]

I also assume that after the length of the financing is up, you just pay the dues and points yearly until membership is up in 20?? right?

 

[chalee94]

I also assume that after the length of the financing is up, you just pay the dues and points yearly until membership is up in 20?? right?

not sure what you mean by "20?"

i paid my tiny resale off immediately, so yes, i'm just paying annual dues every year until my contract expires in 2042 (or until i sell it). my dues on a 40 pt contract come out to about $16 per month.

 

[crisi]

Dues are usually pretty low during the selling stages of the resort (which BLT is in) and then usually go up a little bit more than standard for a few years once all the units are declared. I wouldn't expect BLT to remain the lowest cost resort over the long term. So if amount of dues is a factor to you, its something to consider.

Also note that there is risk here - especially when financing. The unfortunate economic conditions of the past year left a lot of us depressed over threads where people were forced to sell their DVC. There is no guarentee that you will be able to sell it for what you bought it for, and some DVCers ended up upside down.

 

[bumbershoot]

Thanks all!


So is it safe to assume monthly cost would be as much as (roughly) $250 per month for 160 points at $117 per point at 10.75% interest through disney without discounts

If so, thats really not bad at all!

Yes. To be totally open about it, our loan payments are 226.92/month. Very reasonable.

And they don't mind extra payments, even as low as $10, towards the principal (they even have a button on the Loan page on the member site specifically for principal payments), so it's easy to get rid of early, too.

I also assume that after the length of the financing is up, you just pay the dues and points yearly until membership is up in 20?? right?

Yep, you pay the dues until 20-whenever-your-resort-is-ended.