Financing a resale

[BKelly]

Hello everyone! After years of using my parents DVC for my own family, most recently my honeymoon at the beautiful Aulani, I am considering a membership of my own.
After looking through all of the information, it seems like resale makes more sense for us than DVC direct. Cruising isn't important, super-high-end-shi-shi hotels aren't important and the way our lives go, we cannot plan a vacation 11 months in advance, so 'home resort advantage' has never mattered.
To my question... we have a SUPER great interest rate on our Disney Visa, of course for purchases, not cash advances/checks. I was very disappointed to learn that resales are not available for purchase by credit card- only DVC direct.
First, am I missing something, somewhere with the credit card purchases- do I have this correct? Also, what is your experience with financing a personal loan? I am looking for a ten year, but the interest rates are higher than our card Weighing the pros and cons of resale vs direct and card with great interest vs loan with additional interest.

 

[Dean]

Hello everyone! After years of using my parents DVC for my own family, most recently my honeymoon at the beautiful Aulani, I am considering a membership of my own.
After looking through all of the information, it seems like resale makes more sense for us than DVC direct. Cruising isn't important, super-high-end-shi-shi hotels aren't important and the way our lives go, we cannot plan a vacation 11 months in advance, so 'home resort advantage' has never mattered.
To my question... we have a SUPER great interest rate on our Disney Visa, of course for purchases, not cash advances/checks. I was very disappointed to learn that resales are not available for purchase by credit card- only DVC direct.
First, am I missing something, somewhere with the credit card purchases- do I have this correct? Also, what is your experience with financing a personal loan? I am looking for a ten year, but the interest rates are higher than our card Weighing the pros and cons of resale vs direct and card with great interest vs loan with additional interest.

Why not save up and pay cash? Simple, clean, cheap, safer (in many ways) and gives you the most options. That way DVC can be a blessing to you rather than have potential for being a curse.

 

[BKelly]

Why not pay with cash- because I don't have debt and I would like to buy a timeshare and begin using it with my family. Given certain circumstances, it paid off within a couple of years anyway. Our kids are 13 and 16... time is flying. I remember the memories made with my parents and would love to do with same with our kids.

Ten year loan would be great immediately, lower monthly's on something that isn't going to be a long term financial burden (aside from annual dues, which are fine).

Do you have experience in this field and can offer thoughts?

Any input on original questions are appreciated, thanks!

 

[Dean]

Why not pay with cash- because I don't have debt and I would like to buy a timeshare and begin using it with my family. Given certain circumstances, it paid off within a couple of years anyway. Our kids are 13 and 16... time is flying. I remember the memories made with my parents and would love to do with same with our kids.

Ten year loan would be great immediately, lower monthly's on something that isn't going to be a long term financial burden (aside from annual dues, which are fine).

Do you have experience in this field and can offer thoughts?

Any input on original questions are appreciated, thanks!

The 2 locations I am aware of to finance resales directly are Monera and timeshare lending.net. The later has rates of 12-14% based on 10 yr term and depending on down payment plus fairly high fees IIRC. I'm not as certain about monera but the reports I've seen say they're similar in interest rates IIRC. I am not aware of where you can directly resale with a CC, you might be able to do the down payment on one though depending on the company. I would strongly recommend against a HELOC. Sometimes a local bank or CU will give you a signature loan around that size. Of the choices and based on cost alone, resale is much better regardless of financing or not. I would strongly recommend against going retail just to use a CC.

 

[BKelly]

I absolutely do not want to go with DVC direct in order to use a card. I will not be going the DVC direct route as the per point $ is so much higher than resale, in addition to what I mentioned previously- home resort advantage is not important, neither are the cruise or high end resort options. RCI and DVC resorts are what I am interested in.

Our card has half the APR that you mentioned, which was why I would prefer that route.

Thanks!

 

[LorieDisneyLover]

Back to your original question … from what I understand there are no title companies that will accept credit cards for your purchase. Disney is the only place you are able to do that.

The interest on personal loans usually is tied directly to your credit score and the reason for borrowing.

 

[Silligoose]

Lightstream financial is another option for timeshare loans that The Timeshare Store refers people to if you have really good credit. The rates start at 5.99 and get higher the longer the term of the loan. We paid cash so I can't say anything about them from experience. I am not a finance expert but I feel like the way interest is compounded on a credit card may be different than a long term loan. I could be totally wrong... Even if it's not, I personally would have major anxiety carrying a 10-15k or more credit card balance. I am a pay off my balance every month kind of credit card user. Good luck!

 

[Dean]

Lightstream financial is another option for timeshare loans that The Timeshare Store refers people to if you have really good credit. The rates start at 5.99 and get higher the longer the term of the loan. We paid cash so I can't say anything about them from experience. I am not a finance expert but I feel like the way interest is compounded on a credit card may be different than a long term loan. I could be totally wrong... Even if it's not, I personally would have major anxiety carrying a 10-15k or more credit card balance. I am a pay off my balance every month kind of credit card user. Good luck!

There are also a number of gotcha's that are built in and can drive the rate to 20% plus overnight.

 

[bmcd1998]

I'm a Certified Financial Planner for a living and I would NEVER recommend borrowing to buy a timeshare.

Assuming you are determined to do so, check out www.lightstream.com. Rates are good for unsecured loans (maybe 6-7%) and I think they will go out to 7 years if necessary, but they require A credit.

In your post you mentioned "the home resort doesn't matter" to you. You might want to consider that your purchase will be for many years and your ability to schedule 11 months in advance could change. The best course, IMHO, is to buy at a resort at which you want to stay frequently.

Whatever you decide..enjoy!

 

[BKelly]

Thank you for the input. The card has a permanent 5% rate, which is better than the numbers I have seen for a general search.
As I said, this is not going to be long term financing anyway as this will be paid off within a couple of years. I appreciate the concern however my financial well being and credit are not in danger.

I will check out lightstream, thank you.

Home resort is not important as we are unable to plan vacations months in advance so we go with what's available, and that's fine.

Thanks !

 

[Dean]

Home resort is not important as we are unable to plan vacations months in advance so we go with what's available, and that's fine.

If you can't routinely plan by around 7 months out I would recommend against buying.

 

[BKelly]

Thanks Dean, but we have been very happy with using my parents this way and would like our own.

 

[DVCMomBLT]

I would look into using a HEL or HELOC if you insist on financing. Penfed will give you a fixed HEL for 3.24% for 5 years.

 

[lions1995]

Have you considered a home equity loan? Rates might be low and interest might be deductible. Just a thought.

 

[supersnoop]

If you have a paid-off car worth some money, you could refinance it. Some credit unions are as low as 2%. Or look around for 0% introductory offers for balance transfers on a credit card. If you'll pay it off in 12-18 months that would probably work out for you. Also, Fidelity (or whoever they use for closing) took a credit card for our $1,000 deposit, so that's at least a little on your credit card.

 

[BKelly]

These are great ideas, thank you!

 

[BKelly]

Lightstream financial is another option for timeshare loans that The Timeshare Store refers people to if you have really good credit. The rates start at 5.99 and get higher the longer the term of the loan. We paid cash so I can't say anything about them from experience. I am not a finance expert but I feel like the way interest is compounded on a credit card may be different than a long term loan. I could be totally wrong... Even if it's not, I personally would have major anxiety carrying a 10-15k or more credit card balance. I am a pay off my balance every month kind of credit card user. Good luck!

I will look into this, thank you. As far as a high balance, this would have been a first, only because of the permanent low interest rate (plus rewards!) and the fact that it will be paid off fairly quickly. But this is exactly why I asked... I wanted input regarding what others have done. Thanks!

 

[DisneyRegulars]

We were able to get good rates on personal loans through our credit union. I think around 4.5% for 5 years. We were happy with that.

 

[Silligoose]

I will look into this, thank you. As far as a high balance, this would have been a first, only because of the permanent low interest rate (plus rewards!) and the fact that it will be paid off fairly quickly. But this is exactly why I asked... I wanted input regarding what others have done. Thanks!

The rewards would be a nice perk! I too had thought it would have been nice to charge it for the airline miles and then pay it right off! We considered Lightstream seriously as well. Seems like one of the best options if you can do 3 yr financing. I had worked out that the interest all told would still have been less than a cash reservation as non- members.

 

[BestDadEver]

Why not save up and pay cash? Simple, clean, cheap, safer (in many ways) and gives you the most options. That way DVC can be a blessing to you rather than have potential for being a curse.

This is surprising but I have changed my ways and agree with dean here .

Just save up , if you are debt free it shouldn't take too long , it will likely take a good amount of time just going through the resale process a few months at a min .

I haven't priced personal loans but they should be in the 10-15% range I don't think you will get a ten year personal loan even if you could that would be a bad idea

You can't pay on a credit card the same reason you can't buy a house with one .