Financing 500 points

[jcf]

Anyone ever finance this many points = $600/mth. 30% would be deductible interest or around $180 leaving an actual payment of about $420.

 

[goldilocks_63]

I apologize in advance, because I'm going to give you some financial advice.

Do not finance this many points. The annual dues for 500 points will come to around $2,500 / year alone.

If you can't afford to buy this amount of points outright, then with the economy on shaky ground you should not extend yourself this far.

If you need the points for a wedding or such, buy 200 points, and with banking / borrowing, can get times 3 which give you up to 600 points to play around with. And, if you get developer points, you may have even more.

My strongest recommendation is not to get yourself over your head.

Here's a quick list from a MOM -
1. Pay off all student loans
2. Pay off all credit cards
3. Pay off car loans.
4. Put some money away (3 months if lose job- economy is on the edge).
*. Pay down the mortgage - What a great feeling to not have that over your head...

---

If you have 1-4 done, then you may finance a managable amount, INHO 200 points, which I would break into 2 100 point contracts, so they are easier to sell at a later date if you need to, or to gift to future children / grandchildren.

After 200 points are paid off and in the free and clear, you can then do add-ons...

I hope you take this in the spirt it's intended, I am trying to give you my best MOM advice.

Goldi

 

[Mtnman44]

It all depends on your own individual situation. Income, debt, cash and assests, ability to get better loan, personal vacation habits and needs, etc. This could range from the best decision you've ever made to a completely idiotic move. The best answer in Finance and Business is "It depends".

That being said, it seems hard to imagine anyone that can use 500 points a year would need/want to finance it.

 

[jdg345]

I apologize in advance, because I'm going to give you some financial advice.

Do not finance this many points. The annual dues for 500 points will come to around $2,500 / year alone.

If you can't afford to buy this amount of points outright, then with the economy on shaky ground you should not extend yourself this far.

If you need the points for a wedding or such, buy 200 points, and with banking / borrowing, can get times 3 which give you up to 600 points to play around with. And, if you get developer points, you may have even more.

My strongest recommendation is not to get yourself over your head.

Here's a quick list from a MOM -
1. Pay off all student loans
2. Pay off all credit cards
3. Pay off car loans.
4. Put some money away (3 months if lose job- economy is on the edge).
*. Pay down the mortgage - What a great feeling to not have that over your head...

---

If you have 1-4 done, then you may finance a managable amount, INHO 200 points, which I would break into 2 100 point contracts, so they are easier to sell at a later date if you need to, or to gift to future children / grandchildren.

After 200 points are paid off and in the free and clear, you can then do add-ons...

I hope you take this in the spirt it's intended, I am trying to give you my best MOM advice.

Goldi

Curious ... why are Student Loans so high on the list ... ?

 

[JenSop]

My honest opinion is that that seems like alot to finance. Can you buy in at a lower level and do add-ons later? That's our strategy.


As for the PP's advice about paying off student loans first - I must respectfully disagree. I would list credit cards as number one priority. Speaking only from my situation - I got my masters at a very prestigious conservatory. I'll be paying that off for most of my life. If I waited to do anything else till those loans were paid off, I wouldn't be able to take a vacation until I was 60 years old. Sometimes you just gotta prioritize and decide what's important in your life.

But, again, I would be very wary about financing 500 points. But maybe that's just me - I know I couldn't afford it, maybe the OP can.

 

[jdg345]

My honest opinion is that that seems like alot to finance. Can you buy in at a lower level and do add-ons later? That's our strategy.

I would agree; that's the strategy we're using. Of course, all things are relative and for all we know $1000/mo is very easily disposable income for the OP.

As for the PP's advice about paying off student loans first - I must respectfully disagree. I would list credit cards as number one priority. Speaking only from my situation - I got my masters at a very prestigious conservatory. I'll be paying that off for most of my life. If I waited to do anything else till those loans were paid off, I wouldn't be able to take a vacation until I was 60 years old. Sometimes you just gotta prioritize and decide what's important in your life.

I agree here as well, which is why I had asked the question previously. Student Loans are one of those things that tend to be there forever. I've always thought it best to consolidate to the lowest rate possible and just let them tap you for the rest of your life.

But, again, I would be very wary about financing 500 points. But maybe that's just me - I know I couldn't afford it, maybe the OP can.

Right, it's all relative ... we don't know what the level of disposable income is for the OP.

 

[Mr Man]

We financed 210 pts and are on schedule to pay it off within no more than 2 yrs.

We are visiting WDW in 10 days and plan to do a 160pt add-on at AKV. Plan is to pay this off within 2 yrs also.

Our final goal is to have around 600pts total (lookin' hard at Contemporary Kingdom). We are doing it in stages though. This way we only have MF to worry about.

I like the incremental approach (easier to sneak it by DW ).....

 

[jcf]

No debt just lease pmt. Mortgage plus DVC = 30% of monthly net income.

 

[amyup]

We financed 210 pts and are on schedule to pay it off within no more than 2 yrs.

We are visiting WDW in 10 days and plan to do a 160pt add-on at AKV. Plan is to pay this off within 2 yrs also.

Our final goal is to have around 600pts total (lookin' hard at Contemporary Kingdom). We are doing it in stages though. This way we only have MF to worry about.

I like the incremental approach (easier to sneak it by DW ).....

We're planning on doing the incremental approach too (easier to sneak by DH though). We're purchasing 160 at AKL pay it off in 2-3 years and paying cash for GCV whenever they go on sale

Amy

 

[JodyTG]

If you're going to do this just make sure that you don't get one contract. The first once thru DVC has to be 160 points but break the rest of the points down into 100 points each or less. That way, if you ever want to sell some of them it will be much, much easier.

If you're at a good place in your life, and debt-wise it sounds like you are, and have a retirement account all set up, then I say GO FOR IT!

 

[BWV Dreamin]

I agree here as well, which is why I had asked the question previously. Student Loans are one of those things that tend to be there forever. I've always thought it best to consolidate to the lowest rate possible and just let them tap you for the rest of your life.

A little advice about student loans..........you can not include this debt when filing a bankrupcy and they can garnish your wages to recieve payment. You can not use a credit card to pay them off. Credit card repayment can be included when filing a bankrupcy, and creditors are very willing to work with you towards repayment. Again, PAY OFF the Student Loans!!

 

[goldilocks_63]

Sorry, I may have gotten the wrong order of priorities on the student loans, which the other posters pointed out.

Goldi

 

[3pirates]

You know your personal situation financially. I don't think there is a thing wrong with financing something with long term benefit, especially when you can get a tax break on the interest, as long as there is room in your budget. As far as whether you can use 500 points...we have over 400 and use them all. We didn't start out that way, but as our family grew we enjoyed having more.

 

[edk35]

If you're going to do this just make sure that you don't get one contract. The first once thru DVC has to be 160 points but break the rest of the points down into 100 points each or less. That way, if you ever want to sell some of them it will be much, much easier.

If you're at a good place in your life, and debt-wise it sounds like you are, and have a retirement account all set up, then I say GO FOR IT!

We purchased Jan. 07 and were able to break our 300 into 3 100 pt. contracts.

 

[TenThousandVolts]

30% would be deductible interest or around $180 leaving an actual payment of about $420.

I am not the smartest person about $$$ so I apologize if what I am about to say is off-base- but here goes:

Your actual payment is not $420- it is $600. Just because interest is tax deductable doesn't mean you don't pay for it- it just means you can take that much off your income on your taxes. You don't get all that money back. If I misunderstand what you meant by 'actual payment' I apologize- Also, if I came off as preachy- not my intention. I just read this as if you were saying the interest doesn't count or something.

 

[jdg345]

A little advice about student loans..........you can not include this debt when filing a bankrupcy and they can garnish your wages to recieve payment. You can not use a credit card to pay them off. Credit card repayment can be included when filing a bankrupcy, and creditors are very willing to work with you towards repayment. Again, PAY OFF the Student Loans!!

I completely understand the rules of backruptcy ... I'm not suggesting that they not be paid or should be ignored, I was just questioning the priority. Personally, I'm in no rush to pay off mine. For what they tap me for monthly, they could continue to do so for the next few decades for all I care.

As far as garnishing wages, I believe there are some rules there as well depending on where you reside, etc; but again, I agree they should be paid eventually.

 

[Alexander]

I completely understand the rules of backruptcy ... I'm not suggesting that they not be paid or should be ignored, I was just questioning the priority. Personally, I'm in no rush to pay off mine. For what they tap me for monthly, they could continue to do so for the next few decades for all I care.

As far as garnishing wages, I believe there are some rules there as well depending on where you reside, etc; but again, I agree they should be paid eventually.

Yes, I totally agree with you an so would most financial advisors. They would tell you to pay off the high-interest things first, credit cards, etc. Student loans have very low interest rates (at least mine do).

 

[Jaaron2]

My 2 cents worth...buy what you can afford up front. Finance smaller contracts as you go along. Less risk all the way around and cheaper in the long run.

We did the exact same thing. We bought 200 points with cash. About 6 months later financed 100 point resale agreement (for 3 yrs). Just one month ago bought a 25 point add on with cash. Leave yourself some flexibility as you add on your points.

The other catch...you might find another resort you love (see signature below)that you want to have your points split with. With that many points there is great value at splitting them between two resorts.

 

[wizkyd]

Absolutely pay off your credit cards before your student loans. Student loans (Federal Backed, not private) are:
1. Tax deductible (up to $2500 for certain levels of income)
2. Fixed rate (Once consolidated), usually at very low interest rates.
3. Flexible on payments based on current financial situation, i.e, you can ask for hardship deferrals (put off payments, as necessary)

Credit Cards are nowhere near as flexible or cheap. I agree, however, that most of that should be paid down before attempting to purchase a large group of points like that. Good Luck!

 

[BWV Dreamin]

Absolutely pay off your credit cards before your student loans. Student loans (Federal Backed, not private) are:
1. Tax deductible (up to $2500 for certain levels of income)
2. Fixed rate (Once consolidated), usually at very low interest rates.
3. Flexible on payments based on current financial situation, i.e, you can ask for hardship deferrals (put off payments, as necessary)

Credit Cards are nowhere near as flexible or cheap. I agree, however, that most of that should be paid down before attempting to purchase a large group of points like that. Good Luck!

Not to get into a debate here, but you can also consolidate your credit card bills into a lower fixed rate. Student loan rates depend on the loan. The Stafford, for example, is a lower rate loan, but you can not write off the interest on taxes. So you can't make a blanket statement about these student loans. Many have their own terms. If one wants to have these payments for a liftetime, that is a personal choice. But should they incur a hardship, as I have stated, they will be in a far worse situation as compared to credit cards. But to each his own.......I don't have any student loans to worry about.