DVC Financing with Bad Credit?

[Mr. I]

Hello,

My wife and I were curious how hard Disney financing is to get approved for when buying DVC points directly from them? We are considering DVC, and would like to know if we could get financed, or if we should just buy a smaller amount of points through resale with cash. I have read that Disney isn't too particularly picky about credit, since it is a pretty secure loan for them. However, I would like to know if anybody with a similar credit score has been approved or not? My score is between 500 and 600, depending on the reporting agency. My wife's is about the same.

Thanks so much for your help!

 

[hrsmom]

I would buy a smaller resale for cash. The interest rate for good credit is high (I *think* it's 10%), so I would imagine for so-so credit it's probably really high.

 

[DisDaydreamer]

Your info is mostly correct. Disney's property is very secure and if someone defaults, it simply become theirs again. Unlike other secured property they don't have find it to repossess it..... they already have it and continue to manage it. So they have much wiggle room in approving loans.

I hope that answers your question... I am not going to get into the innevitable advice that is going to come about "if you have to ask, then you must not be ready".

You know your situation... be smart and look ahead.

 

[sajetto]

I would buy a smaller resale for cash. The interest rate for good credit is high (I *think* it's 10%), so I would imagine for so-so credit it's probably really high.

I'd go with this advice. You could start out with a small 25 point contract and continue adding on with cash when the money comes available to you. I wouldn't take on debt to do it, especially with the ridiculous rate they charge.

 

[dallastxcpa]

We all have tough times in life and things happen. I say as long as you have the down payment they will ask for when you have poor credit, I think 20%, and are comfortable with the monthly payment and maintenance fees then go for it. The price will only continue to increase. In the mean time you can be making memories of a lifetime with your family. You can always pay off the loan early or make extra payments every month. There is no penalty.

 

[TCPluto]

Hello,

My wife and I were curious how hard Disney financing is to get approved for when buying DVC points directly from them? We are considering DVC, and would like to know if we could get financed, or if we should just buy a smaller amount of points through resale with cash. I have read that Disney isn't too particularly picky about credit, since it is a pretty secure loan for them. However, I would like to know if anybody with a similar credit score has been approved or not? My score is between 500 and 600, depending on the reporting agency. My wife's is about the same.

Thanks so much for your help!

a DIS member posted in the last day or two that they just completed their bankruptcy not 6 months ago, and have already purchased DVC direct from Disney.

So, to go from a fresh bankrputcy to financing DVC with Disney, it must be quite easy.

 

[Nikisha421]

Heres A Direct Answer For You My Credit Score Is Between 500 And 600 The Same As Yours Depending On The Credit Agency. I Took The Tour In The Summer And Was Not Sure About Adding On Another Expense And A High Expense. Well The Bill Was Affordable After I Looked At My Budget.

Here Is My Response To You. It Seems Pretty Easy To Get Through With Bad Credit. Mine Isnt So Great And I Seem To Be A Dvc Member Although Pretty New But I Have Passed My Closing Date.

 

[AnimalPrincess]

We all have tough times in life and things happen. I say as long as you have the down payment they will ask for when you have poor credit, I think 20%, and are comfortable with the monthly payment and maintenance fees then go for it. The price will only continue to increase. In the mean time you can be making memories of a lifetime with your family. You can always pay off the loan early or make extra payments every month. There is no penalty.

I completely agree!! We financed because we wanted to get in now (got a CP discount) and enjoy vacations for a long time. I have a good score, over 700, and my rate was 10%. hth!

 

[Mr. I]

Thanks everyone for your replies, I appreciate it! I guess I will just wait for Disney to contact us and talk to the guide about the credit situation. We can definitely afford the cash down and monthly payments. We just don't have great credit due to some stupid choices when we were fresh to the world...

My reasoning behind investing in DVC: if we buy now, we can afford more use out of it (more years until the lease expires); the property will likely appreciate, so we want in while the getting is hot; we plan at least one trip per year as it is, so we might as well be using up our own points, plus we can rent out what we don't use. Hope that makes sense.

Thanks again!

 

[DisDaydreamer]

Thanks everyone for your replies, I appreciate it! I guess I will just wait for Disney to contact us and talk to the guide about the credit situation. We can definitely afford the cash down and monthly payments. We just don't have great credit due to some stupid choices when we were fresh to the world...

My reasoning behind investing in DVC: if we buy now, we can afford more use out of it (more years until the lease expires); the property will likely appreciate, so we want in while the getting is hot; we plan at least one trip per year as it is, so we might as well be using up our own points, plus we can rent out what we don't use. Hope that makes sense.

Thanks again!

Remember that this is not a lease. You own property in Florida and pay taxes on it in addition to maintenance fees. So when you are about to sign on the dotted line just be sure you understand the total costs.

 

[rchristiansen]

My reasoning behind investing in DVC: if we buy now, we can afford more use out of it (more years until the lease expires); the property will likely appreciate, so we want in while the getting is hot; we plan at least one trip per year as it is, so we might as well be using up our own points, plus we can rent out what we don't use. Hope that makes sense.

Thanks again!

I'm sorry to interject, however to me that should not be the reason to buy into DVC. Don't look as DVC points as an investment. It's not. It's prepaid vacations. Also, you have maintenance fees each month.

I'm sorry to say but if your credit score is poor, you should reevaluate your financial situation and try to improve your credit score prior to making a very large purchase.

Think about these questions:

1 - What if your contract does NOT appreciate?
2 - What if you can NOT rent out your points?
3 - What if you can not afford the maintenance fees - at least $50/month. If you don't pay those on time you don't get to make the reservation.
4 - You said, "so we want in while the getting is hot..." Remember the 2003/2004 Real Estate Market? Everyone said the same thing, and look where it is now. Could that happen to DVC? If so what will you do then?

I don't mean to be a downer, but just showing you realistic possibilities. I hate to see someone mess up their finances.

 

[Mr. I]

1 - What if your contract does NOT appreciate?

We aren't buying it for appreciation purposes. We will continue to use the points to go to Disney regardless of appreciation and we have no plans to sell it off for profit.

2 - What if you can NOT rent out your points?

We have budgeted the costs regardless of whether we can rent the points or not; it would simply be a nice bonus.

3 - What if you can not afford the maintenance fees - at least $50/month. If you don't pay those on time you don't get to make the reservation.

I wouldn't consider buying into DVC if we couldn't afford it. We have the finances, just not the credit.

4 - You said, "so we want in while the getting is hot..." Remember the 2003/2004 Real Estate Market? Everyone said the same thing, and look where it is now. Could that happen to DVC? If so what will you do then?

Again, this isn't for investment purposes, so I couldn't care less if it appreciates or not. This is simply an "investment" in our family's vacation future not a true investment for profit purposes. We are going to buy, whether it's now or later, so if we can afford it now, I think it would be wise to buy now, just in case it does appreciate we won't look back in hindsight.

 

[Mr. I]

I'm sorry to say but if your credit score is poor, you should reevaluate your financial situation and try to improve your credit score prior to making a very large purchase.

Yes, I agree. However, as I'm sure you probably know, improving your credit score is about as fast as a tortoise racing a hare. We currently have no bad debt, and are in the process of rebuilding our score due to some stupid choices as kids, as well as some medical bills from a couple ER visits. There isn't a whole lot more we can do, especially to make it go any faster.

Thanks again for your insight though.

 

[MOM POPPINS]

I say go for it! You will love DVC and the financing is easy to get!

 

[canwegosoon]

I do agree if you can afford it(and it seems like you have done your home work)...but I also have to tell you that DVC has made our vacationing more expensive....(more frequent trips, better rooms that we would have paid for-moderate vs DVC, AP's vs MWY, more airfare etc...) I hope you do decide to go with a minimum number of points and add on as you need(don't start too big). Besure to plan on your vacationing expenses going up.
Good Luck on your purchase.

 

[Mr. I]

I do agree if you can afford it(and it seems like you have done your home work)...but I also have to tell you that DVC has made our vacationing more expensive....(more frequent trips, better rooms that we would have paid for-moderate vs DVC, AP's vs MWY, more airfare etc...) I hope you do decide to go with a minimum number of points and add on as you need(don't start too big). Besure to plan on your vacationing expenses going up.
Good Luck on your purchase.

We have accomodated for APs, which is actually one reason we are excited about DVC. We like that we can buy APs (which means easier access for shorter, more frequent trips) and still have access to the Disney Dining Plan without having to buy passes. Another perk for us, is that we can use the points for Disneyland Resort. We used to work there, so a lot of our friends are still there. We are still in the planning phase of our decising to purchase, and won't make any hasty decisions. Thanks for your help!

 

[Slakk]

Yes, I agree. However, as I'm sure you probably know, improving your credit score is about as fast as a tortoise racing a hare. We currently have no bad debt, and are in the process of rebuilding our score due to some stupid choices as kids, as well as some medical bills from a couple ER visits. There isn't a whole lot more we can do, especially to make it go any faster.

Thanks again for your insight though.

Totally off subject but I too made some stupid choices years ago and ended up with a 580 FICO score - within a 18 months I was up over 700. Someone on the budget board mentioned a website www.creditboards.com they teach you how to move your score up legally and I can tell you that now that I have figured it out I am empowered.

I too thought it took years but what it really takes in many cases is a bit of work on your part.

Good luck!

 

[buckeyebill1995]

Mr. I -- can I ask what you do for a living?

 

[Mr. I]

Mr. I -- can I ask what you do for a living?

Certainly, I am a Food and Beverage Manager at a hotel here in Oregon.

 

[macosx]

I'll reiterate some concerns about buying. Your credit situation doesn't sound ideal for buying right now. It sounds like renting can be cheaper than buying, until you save up and pay down more and get your credit scores up to save on interest. HELOCs may be an option, but not for everyone. Hope you're not overextending yourself or overpaying too much with whatever you wind up with, and have some great memories to enjoy no matter what.

1 - What if your contract does NOT appreciate?

We aren't buying it for appreciation purposes. We will continue to use the points to go to Disney regardless of appreciation and we have no plans to sell it off for profit.

2 - What if you can NOT rent out your points?

We have budgeted the costs regardless of whether we can rent the points or not; it would simply be a nice bonus.

3 - What if you can not afford the maintenance fees - at least $50/month. If you don't pay those on time you don't get to make the reservation.

I wouldn't consider buying into DVC if we couldn't afford it. We have the finances, just not the credit.

4 - You said, "so we want in while the getting is hot..." Remember the 2003/2004 Real Estate Market? Everyone said the same thing, and look where it is now. Could that happen to DVC? If so what will you do then?

Again, this isn't for investment purposes, so I couldn't care less if it appreciates or not. This is simply an "investment" in our family's vacation future not a true investment for profit purposes. We are going to buy, whether it's now or later, so if we can afford it now, I think it would be wise to buy now, just in case it does appreciate we won't look back in hindsight.