DVC Financing Question

[ScottakaMickey]

Hi Everyone,

We are one step away from joining this wonderful family, but I am kind of hung up on the financing terms Disney is currently offering.

Here are a few questions. Maybe someone can help.

1. I know that Disney carries the note, but I am very surprised that there financing rates are so high, given the current rate climate. Can anyone tell me if this is a negotiable item or if I have to take what is currently being offered.

2. Beside a Home Equity Loan or Line of Credit, or a personal loan are there any other financing options available?

3. If anyone has any financing advice, I would be more than happy to listen.

Thanks

 

[drusba]

The market for timeshare loans tends to be quite a bit higher than regular home loans. In fact, Disney's rates are usually a couple of percentage points less than you get through a regular timeshare lender. And no Disney's rates are not negotiable. Home Equity on your existing home is often the least expensive route; some employers, unions, and associations often offer special rate personal loans. Other than that or the timeshare lender, I don't know of any unless you have an uncle with some bucks.

 

[ripleysmom]

We did price another timeshare before purchasing DVC and were quoted 17% as in interest rate. That was in 2000.

As the timeshare company put it, they weren't in the banking business.

 

[LDPKELLY]

Hey...We just bought a OKW resale and were able to obtain a Home Equity loan at 7.25%....I too had trouble paying the rate that Disney was offering.....So, we were able to buy a contract that had points banked and 2002 points coming available for less per point, with a much lower rate.....The negative is that you pay closing costs and also have to pay attorney's fees for the mortgage, but we feel like we still came out way ahead.

 

[ScottakaMickey]

All,

Thanks very much for your replies. Everything is consistent with what I had heard elsewhere.

Wish me Luck.

 

[Pumbaa_]

You may want to also check your credit card rate. I often get offers from my credit card company offering 7.9% on checks until the balance is paid. If I pursued this course, I would use that card JUST for the DVC until it was paid. It is an affordable rate and you can coose how much extra you pay each month.

 

[ScottakaMickey]

Jody, Thanks for the idea. I have thought of that. However, I am not a finance expert, but was wondering if the Tax advantages that you have paying interest on Disney's 11% out weighs the interest savings by purchasing on a credit card at 8% where you can't write off the taxes.

The other concern I had with credit card is that credit card debt has a greater affect on a credit rating then say a mortgage. Not too big of deal here, but if I needed to go out and get a car loan or something like that and they saw a $20,000 credit card out there it might hurt my rating.

Again, thanks for the idea, hopefully a finance person can help with the tax advantages.

 

[IslandHap]

Just for your info...

DVC (Disney) does not report your DVC loan to any of the credit reporting agencies. It will never count against you if you are worried your credit is getting thin.

 

[Simba's Mom]

Just another FYI about the interest rate. Not only is it non-negotiable, it is the same whether you put 20% or 30% or take the loan for 5 years or 10. We were hoping the rate would lower a little if we put more down, and decreased the period of the loan, but it didn't. I think the only way to lower the interest rate was to put 50% down, and take the loan for only 1 year.

 

[trustknoone]

It may just be my employer but I know I can take out a loan against my 401k and have the payments taken out of my paycheck until it's repaid. There is interest cahrged but that also goes to the 401k. So essentially it's like borrowing from yourself and charging yourself interest.

Hope that made sense

Angela