Financing in an unusual situation

[RichV03]

You could achieve the same thing more cheaply just staying at the AoA Nemo Suite. It's not like your choices were finance DVC or never go on vacation again.

That is true. Obviously no one knows what prices will be in a couple years but I doubt they will be what they are now so after much consideration we felt the price point we are likely saving right now vs the amount of interest we figure we will pay we decided that it was still a good time for us to buy. Also I feel like I was wrong using the term financing. We went with a HELOC and dont plan on using much of that so the interest will be overall low.

 

[JereMary]

I did it after closing. I financed with with Monera and then paid it off the first day via a transfer

I've been looking for the answer to this exact question. Were you able to do everything online for the transfer or did you have to have one of the balance transfer checks from the credit card company?

 

[sethschroeder]

I've been looking for the answer to this exact question. Were you able to do everything online for the transfer or did you have to have one of the balance transfer checks from the credit card company?

Balance transfer checks just go to your bank account any time I have gotten them. When I did a personal loan right after college that is when they paid off the other loan directly.

Things could have changed though been a few years.

 

[zakdavid]

I've been looking for the answer to this exact question. Were you able to do everything online for the transfer or did you have to have one of the balance transfer checks from the credit card company?

Everything online. The credit card company paid the loan/ other credit card off directly or gave me the option to get a check if I needed it

 

[meanwoodwhite]

If everyone lived thier lives like some of the doomsayers no one would purchase anything other than bread and water. Everything else goes under the mattress.

Most anybody can lose their jobs tomorrow, doesn't stop them buying houses or cars on credit.

If everyone lived thier life by that logic buying a house on a mortgage is the most stupid thing you can do ,putting your self into a couple hundred grand in debt for 25 years when you could lose your job next week.

You have to live with some sort of risk. If the payments are affordable then there is absolutely no problem with finance. Its what makes the world go round.

If everyone paid cash for everything the world would come to a grinding halt.

 

[Prince John Robin Hood]

If everyone lived thier lives like some of the doomsayers no one would purchase anything other than bread and water. Everything else goes under the mattress.

Most anybody can lose their jobs tomorrow, doesn't stop them buying houses or cars on credit.

If everyone lived thier life by that logic buying a house on a mortgage is the most stupid thing you can do ,putting your self into a couple hundred grand in debt for 25 years when you could lose your job next week.

You have to live with some sort of risk. If the payments are affordable then there is absolutely no problem with finance. Its what makes the world go round.

If everyone paid cash for everything the world would come to a grinding halt.

Agreed. People finance just about everything these days. I wouldn't finance DVC at 10% but don't judge those that do.

 

[CarolMN]

One needs a place to live. No one needs a timeshare/Disney vacation. That's a want. Except in very limited circumstances, financing a want is a poor choice.

Obviously, my opinion. Nearly all competent financial advisors share it. YMMV.

 

[meanwoodwhite]

One needs a place to live. No one needs a timeshare/Disney vacation. That's a want. Except in very limited circumstances, financing a want is a poor choice.

Obviously, my opinion. Nearly all competent financial advisors share it. YMMV.

Well you can just rent the place you live instead of putting yourself into hundreds of thousands in debt.

But people take the risk as once you pay off your house you have an asset that you no longer have to pay for except taxes and upkeep etc..

Its not exactly the same but all financing has risks. If your setting up a business, buying a car whatever.

A good financial adviser would also say not to wipe out a big chunk of savings if you can get a low finance loan.

 

[Starport Seven-Five]

If everyone paid cash for everything the world would come to a grinding halt.

An argument could be made that people would purchase more once the world adjusted because they wouldn't be diverting a portion of their income to interest.

 

[smisale]

We need to consider the finance right now in Canada a line of credit is 2.56% which is very low and with covid around its not going up any time soon on 20000.00 loan its 55 dollars a month interest not so bad at all

 

[CarolMN]

Its not exactly the same but all financing has risks. If your setting up a business, buying a car whatever.

Not good examples to support your point. Those are needs ( a livelihood & transportation) if done rationally. Timeshares are wants.

 

[CastAStone]

Well you can just rent the place you live instead of putting yourself into hundreds of thousands in debt.

But people take the risk as once you pay off your house you have an asset that you no longer have to pay for except taxes and upkeep etc..

Its not exactly the same but all financing has risks. If your setting up a business, buying a car whatever.

A good financial adviser would also say not to wipe out a big chunk of savings if you can get a low finance loan.

We need to consider the finance right now in Canada a line of credit is 2.56% which is very low and with covid around its not going up any time soon on 20000.00 loan its 55 dollars a month interest not so bad at all

Financing to keep semi-liquid assets earning interest at a rate higher than you're financing for is one thing, but the underlying assumption there is that one has that amount of money lying around and one is not financing out of need. If you have $600K in cash and investment accounts that aren't tied to retirement and you want to finance a $30K purchase because you feel you can beat the interest rate in the market, knock yourself out. I financed a couch last year that I had planned to pay cash for because they gave me 5 years zero interest and my credit score could take the hit - so why wouldn't I?

When the question is "I can't afford this unless I finance it", that is a totally different question.

 

[Prince John Robin Hood]

When the question is "I can't afford this unless I finance it", that is a totally different question.

This is why financial literacy should be taught in schools. Most people do not understand what they can and cannot afford.

Look at car loans where 85% of people finance new vehicle purchases. Once you decide to finance your vehicle purchase affordability is then based on the payment as it's already been established you can't afford the purchase outright.

 

[sethschroeder]

If everyone lived thier lives like some of the doomsayers no one would purchase anything other than bread and water. Everything else goes under the mattress.

Most anybody can lose their jobs tomorrow, doesn't stop them buying houses or cars on credit.

If everyone lived thier life by that logic buying a house on a mortgage is the most stupid thing you can do ,putting your self into a couple hundred grand in debt for 25 years when you could lose your job next week.

You have to live with some sort of risk. If the payments are affordable then there is absolutely no problem with finance. Its what makes the world go round.

If everyone paid cash for everything the world would come to a grinding halt.

Except you shouldn't ever finance and use the full period to pay off something unless interest is lower than what the money can make you elsewhere.

If you do your homework on buying a house long term at worse it likely will sell for roughly what you bought it for (yes always exceptions). The entire time you are staying there though you likely are making money back because you are not paying rent. Taxes on my house are roughly 20-30% of what an apartment would cost me. That means every month when I pay down a portion my taxes I am actually saving money. This money easily covers any interest (because my mortgage w/ taxes is less than an apartment). More expenses possible in a house but general idea of it.

Next for a car you should never finance a car except when they give you 0% or some super low % rate. Worst case you plan on paying it off in a shorter time than the 5 years some people take.

Both of these expenses are a requirement in many cases of being able to live in the US no different than food/water.

Plus I don't mean to shock you but when talking with companies many have furloughs and layoffs planned for this fall some of which have not let go a single person to this point because of COVID19. So in these times there is no reason to add non-essential loans to your life.

 

[CastAStone]

This is why financial literacy should be taught in schools. Most people do not understand what they can and cannot afford.

Look at car loans where 85% of people finance new vehicle purchases. Once you decide to finance your vehicle purchase affordability is then based on the payment as it's already been established you can't afford the purchase outright.

I have a masters degree in financial literacy...

 

[Prince John Robin Hood]

Next for a car you should never finance a car except when they give you 0% or some super low % rate. Worst case you plan on paying it off in a shorter time than the 5 years some people take.

One of the best tricks with new cars is 0% financing. You can usually get 0% OR a discount of thousands if paying cash. If it seems too good to be true it usually is.

 

[MICKIMINI]

We sold our big house five years ago and downsized to be mortgage free. We paid cash for a smaller home and updated it nicely, also with cash. It's a freedom that came with sacrifice and good decisions.

If we did not finance that first house we built at 12% in 1984 (horrors), we would not have been able to build our dream house, educate our son through a doctorate or downsize.

I leveraged credit to build a life over many decades. 0% cars, 0% credit cards to help with tuition, etc. DH has trusted me to handle our finances bless his heart. Living small (but well) was a big factor. We bought OKW in 1996 and financed it but paid it off quickly. Through the years we've bought and sold and are waiting to close on #9 and #10. We have been through countless downturns, layoffs, 9/11, the financial crash and now a pandemic but the trajectory never changed. Work through it. Find a way. You only get one chance at this life.

I guess my point is, determination and using credit wisely to live a full and enjoyable life is necessary (for most of us) in the modern world. You have a goal so you find a way. If we had not made money work for us along the way and worked through the bad times and not given up, we wouldn't be where we are now. We walked away from the financial advisor years ago and did it our way. It's turned out pretty well.

 

[Disneygal22]

where do you think is the best place to get a loan with the lowest interest rate??

 

[sethschroeder]

0% cars, 0% credit cards to help with tuition, etc.

Except you are saying 0% (no one has said not to do that)

If we did not finance that first house

Again no one is saying don't finance a house.

There is a huge difference between a timeshare finance and financing anything you brought up. Although you did say you purchased OKW but again the caveat is

but paid it off quickly

I just don't think talking about a basic car, home, furnace, or other essentials is the same and should not be used to justify financing a Timeshare. Its always your choice in the end though what you wish to do. Asking the question though means you likely already have reservations. Its why there was blow back on the DIS Unplugged episode about "ya sure just finance".

 

[T-i-double-guh-er]

You could achieve the same thing more cheaply just staying at the AoA Nemo Suite. It's not like your choices were finance DVC or never go on vacation again.

A week in an AoA family suite, even at 35-40% off rack rate, could easily cost more than the total finance charge over the life of a modest DVC loan. If someone knows they plan to regularly vacation at Disney World and the choice is finance DVC or keep paying cash for Disney rooms, especially if they need larger rooms like family suites, then I don’t think financing is always the worst option.