Financing in an unusual situation

[poofyo101]

OKW is a bit tougher for ROFR than other resorts however keep in mind.

 

[MICKIMINI]

I'd recommend to sit tight and continue to watch the market. It will be a bit slower dip with prices as people withdraw offers and contracts fall apart. Those should start to show in the next month or so and people that have had no offers will continue to drop prices.

I'm glad your future looks bright, and you know you will be DVC owners in the next 12 months. Take a deep breath and hold onto that cash for a few months while you watch the market settle out. As OP's have said, you will likely get what you want at a better price and/or more points...think about the long game!

 

[LAX]

I agree with the good advices others have already mentioned. I really don't see a reason why the OP would not want to wait on this, especially if buying now means the need to finance. I would be surprised if those who decide to wait would not end up getting a better price later. I personally have no interest in purchasing more points so I haven't been following DVC resales as others might have. However, in general, for those that can still afford "luxury" items, there are likely going to be lots of good deals later when the US public currently preoccupied (rightly so) with the pandemic is finally faced with the reality of a recession that can be as bad as, if not worse than, the one during the financial meltdown a decade or so ago.

LAX

 

[hughie]

Hi If I have cash in hand I would sit on it. Based on what i am seeing with this CORVID-19, this is a Disaster for Canada and the USA, not to mention the rest of the world.. It is not going away, in fact it is spreading and will come back around. In Canada they are expecting a second round in November. USA much the same. It is also anticipated that it will be followed by a deep global recession. I am wondering if folks are underestimating what is actually happening with this virus. Suggest being very stategic with debt management at this point in history.

 

[chicagodisneyguy]

I am on the "wait and see" bandwagon.

First, with the crazy stuff going on, I'd wait until at least your wife has started her job. I would guess a vet would have better than most job security. But I think waiting the four weeks to make sure everything pans out is a wise decision. The last thing anyone needs to worry about if finances get thin is a recently added timeshare payment.

Secondly, I think there is a good chance DVC resales prices could go quite a bit lower. First, I think we are going to see the supply of buyer decrease as most people have entered a wait and see or cash conservation mode. Second, I don't think we've really seen the distressed sellers come to market yet. We've had jobless claims of 6.6mln, 6.9mln, and 3.3mln the last three weeks. I would gather many DVC owners have some emergency fund/cash reserves that can allow them to not immediately dump DVC. But the longer this situation goes on the more chance we will see more and more people sell because they have to. When this happens I think we'll see a disproportional supply of sellers versus buyers that we haven't seen in the resale market in a very long time. I could easily see resale prices down $20 on average by summer.

I'm a bond trader and one thing I've learned is buying assets in down markets requires patience. I personally think waiting not only allows you to not finance some/all of our purchase, but I think you will get a better price per point. But what ever you do, good luck!

 

[CastAStone]

Thanks all. I'm going to plan to watch the market and see where the bottom goes. Hopefully that means we are able to save up to the point where we're only financing $5K or so; at that point I can undoubtedly get a better rate just taking an unsecured personal loan via SoFi or something than the 10%+ rates I see quoted around resale sites. Or maybe use one of those 0% interest for a year "checks" that Chase sends me every few weeks. Our first trip with the points wouldn't be until May 2021 so we have time and, depending on the use year, no need for 2020 points.

Thanks!

 

[bumbershoot]

Trading into BWV in the fall in any room category is nearly impossible at the 7 month mark so don't ever expect it.

agreed.

Our vet's office has fewer staff working since they are only taking emergency cases and only allow 1 scheduled patient in the office at a time.

definitely the case I’ve been hearing about.

Skier Pete's chart indicated decent 7 month availability for 1BR Garden Rooms in Sept/Oct

I couldnt even get that in February this year. Let alone at festival time.

I have wondered if buying BWV and trading to OKW as desired makes more sense

yes.

Paying a higher BWV price per point to routinely trade into OKW rooms doesn't make a lot of financial sense

eh... Buy then do what works for you. By the end of the points, why worry about tiny amounts caused by maximizing everything? Using bay lake for OKW has resulted in some terrific stays, and I’ve never once done the math in my head of “what if.”

I guess the thing I’m really trying to gauge is if contracts start popping in the 70s in the next few weeks/months (and there’s a contract I see out there right now that would be perfect at $85 today so we may be headed there), should I jump knowing I may have to finance some of it.

No one can tell you what to do with your money.

But do sit and think about the rush. She’ll likely be working hard for awhile, so getting it now might not be useful at all. And then you’ve paid for a year more of dues because you bought earlier than needed.

 

[ELMC]

Honest advice!! Mostly I'm trying to make sure I'm not about to do something stupid. Thank you!

Honestly, and with all due respect, that's exactly what you are about to do. We are staring down the barrel of a once in a generation global event with unknown ramifications and we have not even begun to see the shockwaves it will send through our financial system. I think it is incredibly risky (and foolish) to take on additional debt at this time for something as absolutely unnecessary as a timeshare. I think you know it too, which may be why you started this thread.

Normally on these boards I refrain from giving outright advice. Instead I give people some things to think about and maybe nudge them in one direction or another. I'm going to break from that and give straight up advice. You should not buy DVC right now. Not now, and likely not this year. Get the money set aside for the full purchase. Then get some more just in case. Then see what the heck this world looks like in six or twelve months. Then maybe you can look at buying again. DVC will be there for decades, I don't see any reason to jump in right now.

Good luck!

 

[JealousBacchus]

Please allow me to be a bit contrarian.....

Due to the current crisis, and the upcoming recession or depression, DVC resale points are going to drop drastically. Please Do Not Finance DVC Right Now!

You will be able to pick up resale at 50% or lower of current values in a few months. DVC resale is very cyclical, and people tend to forget. It just wasn't that long ago (maybe 6 years) that you could get boardwalk for $50ish a point. Those days are soon going to be here again. Personally, I'm waiting to buy.... It's a great opportunity that will be here very soon.

 

[poofyo101]

Please allow me to be a bit contrarian.....

Due to the current crisis, and the upcoming recession or depression, DVC resale points are going to drop drastically. Please Do Not Finance DVC Right Now!

You will be able to pick up resale at 50% or lower of current values in a few months. DVC resale is very cyclical, and people tend to forget. It just wasn't that long ago (maybe 6 years) that you could get boardwalk for $50ish a point. Those days are soon going to be here again. Personally, I'm waiting to buy.... It's a great opportunity that will be here very soon.

50% off is wishful thinking.

 

[Henwen88]

Thanks all. I'm going to plan to watch the market and see where the bottom goes. Hopefully that means we are able to save up to the point where we're only financing $5K or so; at that point I can undoubtedly get a better rate just taking an unsecured personal loan via SoFi or something than the 10%+ rates I see quoted around resale sites. Or maybe use one of those 0% interest for a year "checks" that Chase sends me every few weeks. Our first trip with the points wouldn't be until May 2021 so we have time and, depending on the use year, no need for 2020 points.

Thanks!

Congrats to your wife! As a DVM myself and DVC member, I just wanted to add a few job-specific words of advice. Does she have a contract (a good contract) that will allow regular vacation time to be taken? Or will she be on production or pro/sal that will ultimately effect her income level if time is taken off? What about student loans? Vet school is many things, but it ain't cheap, lol.

I'd keep saving as much as possible then buy when you can pay the cost upfront. I made it through the 2008 crash (barely), and when people can't pay their mortgages, they sure can't pay to get fido's teeth cleaned. We too have been busier than normal for the last few weeks (typical summer-time busy), but I think the economic slump is coming, and the last thing I would want is more debt. But in that same respect, I think resale will be dropping significantly lower in the next year or so, so I may be snagging an extra contract or two myself lol

 

[CastAStone]

Does she have a contract (a good contract) that will allow regular vacation time to be taken? Or will she be on production or pro/sal that will ultimately effect her income level if time is taken off? What about student loans?

It’s technically Pro-sal but the salary is about what we expected her total income to be so the pro is basically a bonus if she hits the quarterly targets; we’re certainly not counting on a bonus in year 1 (She was told first year vets rarely make their targets) but we’ll see how it goes. I’ve seen where people suggest vets take all their vacation in one quarter to make sure they blow away the other 3. It’s for one of the chains so the vacation benefit is real.

We have plenty of student loans but that’s all in the budget. We bought our house in 2013 when they were cheap; between student loans and mortgage debt we’ll have about 21% of our monthly income towards debt service which in my understanding is most people’s mortgage ratio.

 

[CastAStone]

Please allow me to be a bit contrarian.....

Due to the current crisis, and the upcoming recession or depression, DVC resale points are going to drop drastically. Please Do Not Finance DVC Right Now!

You will be able to pick up resale at 50% or lower of current values in a few months. DVC resale is very cyclical, and people tend to forget. It just wasn't that long ago (maybe 6 years) that you could get boardwalk for $50ish a point. Those days are soon going to be here again. Personally, I'm waiting to buy.... It's a great opportunity that will be here very soon.

Indeed; This expectation (maybe not 50% but maybe 25-30) is the only reason we’re looking in the first place. I think I did a poor job communicating our timeframe.

 

[choirfarm]

No. No. No. No.
No debt, especially in this economy. We will be able to weather this storm because of our financial prep.
1. Savings of at least enough to live for 6 months.
2. No credit card debt.
3. Mortgage is ok, but I strongly suggest paying extra down. We paid ours off in 7 years. Then put that money into retirement. ( Not official)
4. Car- drive them into the ground. Pay off one as quickly as you can then continue to pay the car payment into a savings account after you have paid it off. That way, after a few years you can pay cash for your car.
5. Max out IRA or 401k for retirement.
6. Make sure as soon as each child is born, you put a little each month into a 529 for college.
7. Save for major purchases and get high quality. We had rooms in our house empty for years until we found quality furniture and we could pay cash.

When all of that is done and you still have some left over, then consider it. But debt for that in this economy. NO WAY.

 

[crisi]

I think that resale prices are months away from a bottom - and years away from being where they were two months ago - so if you can wait and pay cash nine months from now, you'd probably do better than rushing into anything today with a loan.

I think that BWV and OKW are two VERY different resorts and if you want to stay at BWV sometimes, you should buy there. You can almost always switch into OKW. ESPECIALLY if you are looking towards F&W. All availablity charting is based on the past - and in twenty years of my own ownership - its only gotten harder to get into BWV as a non owner - harder each year. People who want to be able to trade into BWV now know they need to plan for one bedrooms, and allocate points accordingly, so those are getting tighter. (I think the next few years might bring weird availability patterns, and it might be easier for a year or two to get in before snapping back to its current difficulty....but I also think right now no one knows much of anything about what the future looks like and that's a guess.)

I think that people starting on their careers should sit down and prioritize their goals - are you going to have kids/do you have kids? Do you need to pay down student loans? Is she going to buy into a practice at some time in the future? Do you have a mortgage - are you going to get one or increase one? Not just the budget right now, but look at life five, ten years from now and have some idea of what it might look like (and warning, it won't look like that, but you'll have a plan). Make sure that regular Disney vacations are going to fit into that plan. And think about time as well as money - someone who spends a lot of time doing dog sports (like my vet does) doesn't necessarily have a lot of time at Disney. Someone who decides to have kids might find its hard to fit Disney in with sports/dance schedules in a few years. For us, we only ever bought points for every other year - because we enjoy travel in general more than Disney all the time - and therefore have spent our travel budget (money AND time - because there are only so many vacation days in a year) divided between Disney and other places - In the past twelve months - London, Amsterdam, Tanzania, Sydney, Washington DC, Newport RI, North Shore Lake Superior, Hilton Head (through DVC) - but other than HHI, there has been no Mouse this year. Its the rare person who sees their income increase pretty dramatically and isn't shocked by how their expectations on how far it will go were out of line with the reality of how far it stretches. On paper it works....in real life money just seems to spend faster if you have it. Which is another reason wait until you adapt to your new income a little and see what actually happens to your budget instead of what happens on paper.

 

[Minniesgal]

I wouldn't borrow to buy something which isn't a need especially at the beginning of a wordwide recession.

I would save for 9 to 12 months and buy bit by bit as I can afford to pay cash for it.

 

[iloveokw]

See above. I was going to tell you that I'm not your mom but give you advice. The dentists in our town have laid off all of their employees and/or closed their offices during the pandemic.

 

[zakdavid]

I did something similar. I financed with a plan to pay it off in 11 months and it worked out great for me.

 

[gharter]

Thank you. Skier Pete's chart indicated decent 7 month availability for 1BR Garden Rooms in Sept/Oct, but you are not the first person I have seen indicate that may not be the case. I have wondered if buying BWV and trading to OKW as desired makes more sense; the present value of the 22 year cost of ownership for the two winds up pretty similar with the difference in MFs.

When we first purchased BWV, we closed just before the 7 month window for our October trip. There were no studios available. We were able to do a split stay in a 1 BR for 4 of the 7 nights. Could never get the other nights. Since then, its been even more difficult.
I would not count on getting into BWV or BC at the 7 month window for fall.
Fall tends to be very full for DVC with F&W, MNSSHP and MVMCP.

 

[Cousin Orville]

I’m not sure if there are more accurate price drop stats, but of the contracts I’ve looked at, it looks like prices have dropped 8% in the last month. At this point that’s just not low enough to warrant financing at this point. The interest paid over a year will eat up most of that savings.

I was in a similar situation going from full time student to full time professional pretty much overnight. I’d recommend patience. There’s so much that’s about to change regarding your home budget. I’d at least wait a few months into her new job before entertaining large expenses.