DVC Purchase Questions - Direct purchase/financing/mf

[tbone20102]

We're currently evaluating DVC and if it makes sense for us. I'm aware the the direct vs resale and the pros/cons for both. We've generally stayed value/mod but with the dining plan. We are renting points for a 2br at AKL this September. I can see us switching our preference to deluxe/dvc without the dining plan.

There is a lot of info on resale that I have sifted through so I think I have a handle on that. I do however have some questions on direct.

Mainly on if we had to finance some of the purchase. It would be a small amount but I want to account for it as I plug and chug on numbers.

Does anyone know if you were to finance through Disney some of the purchase when the first payment is due after? Also when are the first MF's due?

For example if when we visit in Oct and we like and decide to buy and we decide to buy direct and finance some of the purchase when would the first payment be due and when would MF's be due?

My guess is we would buy a DEC use year. Based on what I read since we will be buying in the 2013 year and get those points and then get our 2014 points in dec. Do I pay MF's on the 2013 points or not until jan 1 when we pay the 2015 dues? Also when would the first financing payment be due; nov, dec?

Thank you in advance and please refrain from flaming me on how I should purchase resale and never finance. I would like ALL the details I can get while I look at this very long term purchase.

 

[Docmom]

I think our first payment was about a month or a month and a half after closing. We set payments and dues up for monthly automatic withdrawal; you can pay down the principal at any time without penalties. Current year dues will be prorated. Pick a use year around when you travel most - if you mostly travel in October then an August or September use year is good so if you have to cancel your points can still be banked. We're flexible on our travel dates so use year wasn't a huge issue for us. Only problem I see with your December use year would be that if you buy in October with a December use year then you'll have to use the 2013 points before November 30, 2014, which will be difficult at the last minute. If you choose to go that route then make sure part of the deal is they bank those points for you (unless you plan on using them in that time frame and they can guarantee a booking). Another thing to consider is where you want to buy. Keep in mind direct points are going up soon; at least for Aulani and Grand Floridian which are the ones they are actively selling. You can still purchase any of the DVC resorts direct but you may have to wait for some. We own at AKL and love it. I'd like to buy more points in the future; will see where the Poly starts but may end up going the resale route (BCV or BLT) for the 11 month booking window at resorts we also love.

 

[DVC Doctor]

As a side note I would rather buy a resale with zero financing than direct and use financing. Disney charges something like 11% or more in interest and that is seriously way too much. In fact you would be better to rent points than buy at those rates.

 

[LisaS]

You mention visiting WDW in September and October but state you are looking for a Dec UY which would be the worst UY if you plan to visit WDW in Sep or Oct on a regular basis. If you haven't already done so, read this thread: Understanding Use Year.

Your dues for 2014 will be pro-rated from your purchase date. If you purchased today (4/18/2014) you would be billed for approximately 8-1/2 months' worth of dues. They actually calculate it based on the number of days between your purchase date and the end of the year. The complete rule on when dues begin is that it is the later of: your purchase date, the start of your initial UY and the occupancy date of the Unit you purchase. That last part applies to new construction where you purchase before the resort is fully open.

Your current year dues will be due about a month after you close on your purchase. If you opt to pay monthly by direct debit, you will owe N months worth of dues but because of the delay in closing and billing, you will pay that amount in N-2 installments. This often confuses people because the amount billed each month is higher than what they anticipated.

 

[tbone20102]

DOCMOM - Thank you for the information it helps complete the picture.

DVC Doctor - As I said before I have looked at resale and I wanted to gather all the information for purchasing direct as well. I understand rates are cheaper resale however with the exception of some of the VGF contracts that have hit the market the longevity of the contracts is significantly shorter such as with BW, BC, OKW, VWL. That has to play some into this decision as well. I agree that if I were financing almost the entire purchase that renting would end up cheaper but I stated that only a small portion of the purchase would be financed and for a short period of time.

LisaS - thank you for the info on use year. I'm in agreement that DEC use year is not the best considering our history of visiting in the fall. Also thank you for the prorated dues info.

 

[nalajms]

Other alternatives to financing thru Disney....

I got an 18mon no interest credit card for my AKV resale in 2012. I only needed to float for a few months. Ended up taking the full credit limit and set up a payment plan to pay it off.

Last year when we added on to VGF, I charged it to my Disney Visa rewards card. They give you 6m no interest up to 10k each. I've heard of people asking the guide to split the charges and over 2 billing cycles.

And don't forget when you go buy resale you prepay the calendar year's dues at purchase, so monthly payments wouldn't start until Jan 1.