Financing DVC Resale

[Revf]

Who did/would you use and why?

Do you recommend them?

 

[suebeelin]

People have said monera.

Personally, I do not think financing dvc is the most prudent financial decision.

 

[Dean]

Who did/would you use and why?

Do you recommend them?

There are lots of options but no good ones IMO. I always recommend against financing but for those who plan to do so options would include a CC, HELOC, local personal loan, retirement account loan or more traditional financing. IMO they are all bad in their own way but some worse than others. Personally I'd put the HELOC, CC and retirement account as off the table. For a mortgage, monera and timesharelending.net are the 2 options I know of. Nationally, lightstream is the personal load that some have used. Rate with lightstream is likely the best even compared to the secured mortgages and the rate is normally the same or less even when you consider the you can't deduct the interest on your taxes. TL is 12-14% depending, Monera 10-15% & light stream ? but I think 8.9% was the last I saw someone quote.

 

[SuperRob]

We used Monera. Instant approval and no credit check. But we're only using it as a "bridge loan" until my bonus arrives in July, because the interest rate isn't great.

 

[girli565]

We used timeshare lending dot net. We had about 60% of the amount in cash and just financed the rest which will be paid off when bonus time comes later this year. The rate is high but they don't have penalties for paying it off early so we're ok with it.

 

[keolalessary]

I would highly recommend finding a way to make it work without financing. If you have to finance, consider what we have done and continue to do. There are some disadvantages to our way but we feel the advantages outweigh the disadvantages.

We use Credit Card Balance Transfers to fund our DVC purchases. Hear me out. We use our credit card to put the biggest down payment possible (usually $1000-2000, depending on the title company) when purchasing resale. When we purchased directly through Disney they let us pay the whole balance off with our credit card, and over 3-4 months. This was AMAZING for us as it gave us the opportunity to spread the payments out AND we were able to use our credit card! We do this so we are able to get miles/points/cash back and our Aulani DVC purchase got us around 21,000 miles towards travel (almost a round trip ticket to LAX to visit Disneyland!).

We use balance transfer offers from our credit cards and deposit the money directly into our savings/checking accounts. Most times you can find a 0% 12-18 month balance transfer offer for a 3% fee, but we wait for the 1-2% fee specials to come out. If you are making a $20,000 DVC purchase, that would mean that you will pay anywhere from $200-600 in fees for the first 12-18 months, depending on the deal. This is WAY CHEAPER than financing through a lender or bank. You will pay more fees than that within the first few months of your loan. We continue to do this over the life of the balance and pay it down as needed.

In order to make this work you will have to have credit cards with high credit limits and that offer balance transfer specials. We initially did this with our Aulani purchase in 2013 and totally funded the purchase this way. We were only required to pay a minimum $200 a month towards the card but we opted to pay more to get the balance down quicker. After paying our Aulani DVC balance off we did the same to purchase Grand Californian points on the resale market. We are still paying this balance down but we are able to do it at our own pace.

The disadvantages to funding your purchase this way are:

1. You need to have credit card credit limits big enough to fund your purchase. You may have to use multiple credit cards to fund the purchase.
2. You need to find balance transfers that make sense. 1-3% for 12-18 month at the minimum!
3. You need to have the discipline to pay down the loan on your own terms and meet minimum payments.
4. You need to plan ahead for when the end of your balance transfer promotion is coming to an end. I've opened up new credit card accounts just to take advantage of 0% balance transfer for 0% fees (Chase Slate is a great credit card for this). You will need to make sure that you can transfer the credit card balance transfer amount to another card, repeating the same process as when you first took out the balance transfers.
5. Your credit score may take a hit due to high levels of credit usage. This isn't really a big deal unless you are planning to buy a house or refinance. Even then, your minimum payment will be less than your typical loan payment so it won't kill the loan for you.

I am in no way a credit expert but we have been able to fund our DVC purchases this way and it works great for us. We save a TON of money on finance charges but we aren't able to claim those fees on our taxes (you can claim your interest % from a loan made to purchase time share properties on your taxes as you would a home purchase).

Has anyone else funded their purchase this way? I'm interested to see if others have tried this and if it worked for them or not. Bottom line is, make sure you can make your DVC purchase work for your own finances and family.

Good Luck!
Keola

 

[dvcdream4fld]

Danger Will Robinson!! Danger!! The days of free credit card transaction fees are gone. You may start off with good credit that will allow you to have low 1%-3% balance transfer fees with 0% APR, but when you try to transfer this large amount again, your credit score will be lower and you will be less likely to get a low rate. If you can't transfer the large balance again, or you miss a payment, the interest rate usually reverts back to 20-30% APR, and then your paying $4000 to $6000 in interest every year.

The last post is definitely not a good idea!!!

 

[keolalessary]

Danger Will Robinson!! Danger!! The days of free credit card transaction fees are gone. You may start off with good credit that will allow you to have low 1%-3% balance transfer fees with 0% APR, but when you try to transfer this large amount again, your credit score will be lower and you will be less likely to get a low rate. If you can't transfer the large balance again, or you miss a payment, the interest rate usually reverts back to 20-30% APR, and then your paying $4000 to $6000 in interest every year.

The last post is definitely not a good idea!!!

Sorry, you are either misinformed or work for a financing company. I have been doing this since 2013 and the rates have not gone up, I haven't been paying $5000-6000 in finance charges a year and my credit score is excellent. For $40K worth of credit card transfers I have paid only $800 in balance transfer fees since 2013. You will pay that In a few short months financing through a lender.

Will, Do your homework and do what suits your family. My previous post is how we were able to finance our purchases, save some money on financing and earn some cash back/miles/points while doing it. You can always finance the purchase to pay off your credit card balances with a personal loan, refinance or HELOC if you want to if you decide to do it the way I did and you would have had time to pay the balance down and not pay ridiculous finance charges at the start.

 

[dvcdream4fld]

Keola,

Back in the early 2000's, I leveraged credit card at 0% transfer and 0% APR, and into money market accounts that were earning 5% interest. I have played the interest games. However, I did not have that money tied up into a DVC timeshare that may depreciate, will definitely cost more than purchase price, and would take several months to liquidate (sell).

You seem to be more disciplined than the average and maybe this works for you, but you even mention about credit score going down when holding and transferring large balances in your original post. On the other hand, you don't mention the consequence when your credit goes down (for any reason) and you cannot transfer the money.

I still would caution anyone from using credit cards (potentially 20-30% APR) to purchase a timeshare.

 

[keolalessary]

Keola,

Back in the early 2000's, I leveraged credit card at 0% transfer and 0% APR, and into money market accounts that were earning 5% interest. I have played the interest games. However, I did not have that money tied up into a DVC timeshare that may depreciate, will definitely cost more than purchase price, and would take several months to liquidate (sell).

You seem to be more disciplined than the average and maybe this works for you, but you even mention about credit score going down when holding and transferring large balances in your original post. On the other hand, you don't mention the consequence when your credit goes down (for any reason) and you cannot transfer the money.

I still would caution anyone from using credit cards (potentially 20-30% APR) to purchase a timeshare.

Agreed. Our way of financing is not for everyone. We are more decipline than most, I believe.

Either way, I wanted to share our experience as I feel we have gained the most without having to use financing through a lender. I felt like I gave enough caution in my original post but maybe I didn't.

 

[Dean]

Sorry, you are either misinformed or work for a financing company. I have been doing this since 2013 and the rates have not gone up, I haven't been paying $5000-6000 in finance charges a year and my credit score is excellent. For $40K worth of credit card transfers I have paid only $800 in balance transfer fees since 2013. You will pay that In a few short months financing through a lender.

Will, Do your homework and do what suits your family. My previous post is how we were able to finance our purchases, save some money on financing and earn some cash back/miles/points while doing it. You can always finance the purchase to pay off your credit card balances with a personal loan, refinance or HELOC if you want to if you decide to do it the way I did and you would have had time to pay the balance down and not pay ridiculous finance charges at the start.

I think the risks to using a CC are on one's personal side as well as there are often rules where they can raise the interest rate unilaterally. For example, they can often raise the rates if one's credit score changes significantly.

 

[jerseyduke]

With regard to the credit card transfer strategy, not offering an opinion, just a few facts on credit rating.

One of the biggest factors in your credit score is credit utilization. You really do now want this to go over 30% if you want to have a good credit score. < 30%= good, < 10$ great.
Every time you open a new account, two things happen:
1. The average length of your history decreases (bad)
2. You have a hard inquiry on your credit report(also bad)
These are not as big of a factor as credit utilization, but are a part of it all.

 

[davidl81]

Who did/would you use and why?

Do you recommend them?

I am not going to debate the pros and cons of financing DVC, just wanted to give OP an answer to their question. If I was going to fiance and I was not going to do some type of 401k loan or HELOC I would look at the following in this order.

1) lightstream(5.9-10% APR based on credit, amount fianced, length of term). This is a credit based system and you will need pretty good credit to get approved. Once approved they will direct deposit the money into your account within 24 hours or so. This helps speed up the resale process just a tad but not very much (you will be a cash buyer rather then a fiance buyer, may save you a little money on closing paper work) Since the loan is unsecured you will not be able to deduct the interest from the loan on your taxes. 10k-25k loans at 36 months have the 5.9%APR which while not super awesome is not too bad compared to other options.

2) Monera (9.9-14.9% APR based on down payment, loan amount, and length of term) 30k and below are auto approved with no credit check. They only fiance the Florida DVC resorts. The loan is secured by the DVC title so you can deduct the interest from the loan on your taxes.

3) timesharelending net (11.9%-13.9% based on down payment amount). 15k and below are automatically approved and no credit check is ran. Also these loans do not show up on your credit report for whatever that is worth to you. The loan is secured by the DVC title so you can deduct the interest from the loan on your taxes.

 

[Millionaire2K]

Years ago I used Lending Club for just a personal loan. It only took a few days to get the $$ deposited into my bank account. The rate was 5% over 3 years for $18,000. I then went to bank to get cashiers check to may for contract.

 

[WDWRook]

Can you buy with Disney Visa to get the 0% APR for 6 months and collect the reward dollars?

 

[SuperRob]

Can you buy with Disney Visa to get the 0% APR for 6 months and collect the reward dollars?

Only if you buy direct from Disney, but yes!