Financing DVC

[rthutchens]

I know the general opinion is to pay cash only, but if you do not have the funds readily available what was your method of payment and why? What kind of interest rate did you get from your source of financing and how many years did you finance for?

 

[REL1203]

very interested to hear this as well... and what interest rate people got... As soon as the Contemporary opens up, i am going to buy into DVC

 

[macman752]

We used Disney financing. 1 year term at 4.95%. The remainder was paid off in 8 months.

 

[REL1203]

thats not a bad interest rate... what length terms did they offer if you remember, and how much did the interest vary for longer?

 

[CarolA]

I went with Disney. Don't recall the rate anymore.

My thoughts were I don't do home equity loans for anything LOL! And with Disney finanicing I got the tax deduction for the interst bringing the effective rate down some.

I would never tap my 401K for this. Remember if you leave the job you repay the loan or they take it out of your 401K and you pay a huge IRS penalty!

 

[rthutchens]

I went with Disney. Don't recall the rate anymore.

My thoughts were I don't do home equity loans for anything LOL! And with Disney finanicing I got the tax deduction for the interst bringing the effective rate down some.

I would never tap my 401K for this. Remember if you leave the job you repay the loan or they take it out of your 401K and you pay a huge IRS penalty!

Good point, I didn't think about leaving your job and having to pay a penalty. How much of a tax deduction do you get? Is it just on the interest or can you also claim property tax?

 

[MadToad]

We used our tax refund as a downpayment and then a credit card at 0% interest for 12 months. Back then, Disney was charging 9% to finance.

Never borrow from your 401k!!!!!!!

 

[chalee94]

Good point, I didn't think about leaving your job and having to pay a penalty. How much of a tax deduction do you get? Is it just on the interest or can you also claim property tax?

if you itemize, you can claim the property tax (actual) component of your annual dues.

deductibility of interest depends on your situation.

in addition to the problems mentioned above, don't forget that borrowing from your 401k replaces money that avoided income tax with money that has already been taxed (and will be taxed again when you retire.) you may be "paying interest to yourself" but it really is a terrible financial move. please don't throw your retirement money away like that for a timeshare.

 

[CarolA]

Tax advice on the DIS is worth what you pay for it LOL!

However, as I read the tax laws and regs. IF you don't have another home you are claiming as second home (beach house, lake house, motor home etc) then you can deduct the interest paid on your timeshare. However, the debt must be secured by the timeshare. So if you paid with a credit card and had interest payments there that's not deductible. For this same reason the financing offerened by the re-sellers is not deductible. It's a personal loan not a mortgage. Of course your impact is based on your income.

I deduct my property taxes each year.

 

[macman752]

thats not a bad interest rate... what length terms did they offer if you remember, and how much did the interest vary for longer?

The 4.95% rate was for a 1 year loan. If I remember correctly anything longer that that was 10.95%.

 

[Quiksilvr]

We used the standard ten-year Disney financing, however, we also put the down payment on our Disney visa because they were doing a promotion at the time. The down payment has been paid off and our tax refund should take care of the rest of the loan.

 

[hellerjw]

We did the financing with Disney, 10 year term at 10.75%. We plan to pay it off in the next 18 months so the APR wasn't a huge concern for us. We also get to deduct the interest as mortgage interest so that's another plus.

The Disney financing doesn't show up on your credit report either, if that's a concern for you, they manage everything in-house.

I agree that's its a terrible idea to borrow from a 401(k) and I don't see a point in financing a luxury item with equity borrowed against your house. You can get the same tax benefits financing through Disney without draining the equity in your home. The only advantage there may be a lower APR but we never intended to spread it over the entire term anyhow so that's not as big of a factor for us.

 

[REL1203]

We did the financing with Disney, 10 year term at 10.75%. We plan to pay it off in the next 18 months so the APR wasn't a huge concern for us. We also get to deduct the interest as mortgage interest so that's another plus.

The Disney financing doesn't show up on your credit report either, if that's a concern for you, they manage everything in-house.

I agree that's its a terrible idea to borrow from a 401(k) and I don't see a point in financing a luxury item with equity borrowed against your house. You can get the same tax benefits financing through Disney without draining the equity in your home.

How much did you finance and what was/is your payment. I am just trying to get a sense of what a normal payment would be like

 

[Quiksilvr]

We financed around $13K on the ten-year Disney plan and I think our payments are like $186 per month plus around $65 per month for dues. We do electronic debit so the interest rate is like 1% lower than it would be otherwise.

 

[hellerjw]

How much did you finance and what was/is your payment. I am just trying to get a sense of what a normal payment would be like

We financed around $17,500. Loan payments are around $235/month and dues around $70/month.

 

[JimC]

Used credit card to get reward points then paid it off.

 

[tammymacb]

Used a credit card check. I deposited the check into my savings account, waited for it to clear and then got a bank check to send in for my closing.

My interest rate is 3.9% for the life of the loan. Not bad!

 

[SusieStone]

I did Disney financing.

I could use the deduction.

 

[delmar411]

Disney financing @ 14+% (forget if it is .50 or .75). We don't have great credit. Anyway it s a 10yr and just under $300/mth plus dues. We'll pay it off in less than 2yrs.

 

[Tinkerdreams]

Financed at 10.75% but we were desparate for a tax deduction since the house is a few months from payoff. Plan to pay this off within the year. DH is retiring so we won't worry about the deduction after he retires.