Financing your DVC?

[njtinkmom]

How difficult is it to finance your DVC? We just bought a house last year, and I am not sure if this will hurt or help us? Do you do that right there, and if so how long before you know if you are approved? Do they require a big down payment? I am thinking of getting around 200 points? What is the rate per point also? One more question, I promise, are there any incentives? My good friend owns to WL & BLT and I have heard of the referal process, how does that work? SORRY

 

[FindTheMickeys]

Financing your DVC through Disney is a fairly simple process. And you know immediately if your financing went through. I have heard that with the economy, Disney is having a bit more difficult time doing the financing but they'll be able to tell you up front. They do require a down payment, which you can put on a credit card or pay cash. Point prices right now through DVC are $112 before any discounts. Make sure you take into consideration the Maintenance Fees that you pay every year. Those vary between resorts, but are also charged by the number of points you purchase. Go to DVCNews.com to see what the going incentives/deals are on points. When you buy and close on your DVC home, your friends get a gift card from Disney when youuse their name as your referral.

Good Luck!

 

[Crystal_27]

Financing through Disney is actually easy as pie, and the loan is considered an "invisible" loan in that it will not show up in any of the credit reporting agencies' systems, and your FICO score will not at all be affected. Essentially, once your Guide plugs your SSN into the DVC system, it will come back with a preferred rate (10.75%) or standard rate (14.25%) rate. Also, if you choose to pay your monthly installments via credit card, the interest rate will increase by 1%. Either way, you will be required to put 10% of the full purchase price down (meaning that you will have to pay $112 x number of points), and any incentives will be reflected as a developer's credit as a discount. And, yes, there are incentives for SSR, GCV, BLT, and AKV, and the incentives differ based on the property that you wish to purchase. Check the DVC News website for the current promotions. Good luck!

 

[JoQuo711]

Just to ground the numbers, for 200 points, at ~$95 per point, you're looking at ~$230/month on a 10 year loan at 10.75% interest, which comes out to ~$28,000 total over 10 years, as opposed to the $19,000 upfront. At 14.25% interest, that's a bit over $260/month for 10 years, or ~$31,500. This doesn't include maintenance fees which will be $750 or more per year, and increase annually, depending on the resort (another $60-$80/month). One nice thing about the loan, is if, for whatever reason, you find yourself suddenly able to pay off a large chunk or all of the loan, your extra payment will go towards the principal and so your total interest paid will go down proportionally without penalty.

 

[5forDiz]

Check out the resale market as well; you can then buy into DVC with a contract that has less points than minimum number of points that you would be required to purchase by Disney if you bought directly through them - iirc that minimum is presently 160 pts.

The board sponsor The Timeshare Store has an abundance of contracts and many of them will save you $ over buying directly through Disney and they can also help you arrange financing through Tammac Financial I believe.
TTS is excellent and knowledgeable for DVC resale purchases; myself and many others who post here have purchased DVC through them and are very happy with results.

Good luck

 

[njtinkmom]

Thanks for all the info.l I am unsure about buying used vs new, also what is the story with a use year? What does that mean.

 

[ToddyLu]

Use year is the month of the year that you will get your points for that year. For instance our use year is Dec. On Dec.1, 2009 we will get 210 AKV points. This means that I need to be sure I bank any unused points every year before 7/31(4 months before the end of my use year--that's the rules). Use year is important if you need to cancel a trip close to the end of your use year. If my use year is Dec. 2009 and I make a reservation for Oct. 2010 with those points... And then have to cancel...you are oblegated to use those points before the end of your use year (Nov.30,2010). Since you have points that are beyond your 7/31 banking period. If they are not used by 11/30 you loose them. So if you always vacation in Oct. you may not want a use year close to it. Dh and I just bought AKV points for the first time. Closing was about $329, annual fees were $590 for the remaining 6 months of the year. In Jan when are Fees come due we will be adding about $85 dollars to the monthly mortgage(we got 2008 points for a free incentive). We bought direct and financed through DVC. The Guide ran our SS# and knew our credit rating instantly.

We negotiated on Sat. Had paperwork on Tuesday, signed and notorized Wed, mailed Thurs and in Orlando Fri. Went very quick and we alsready have points in the system to use. I just had to be sure to bank them by 7/31 since our use year is DEc. Please fell free to PM me is you have any more questions.

 

[5forDiz]

Thanks for all the info.l I am unsure about buying used vs new, also what is the story with a use year? What does that mean.

There isn't any difference - your membership is treated exactly same, it is not flagged or noted in anyway that you purchased via resale. The length of time remaining on the contract is the same. But the resale purchasing process takes longer to complete then it does with Disney (usually somewhere from 1 month - 2 months) and closing costs/fees run somewhat higher than Disney's but in most cases that is offset by $ saved on price per point.

 

[HappyGrumpy]

Financing through Disney is actually easy as pie, and the loan is considered an "invisible" loan in that it will not show up in any of the credit reporting agencies' systems, and your FICO score will not at all be affected. Essentially, once your Guide plugs your SSN into the DVC system, it will come back with a preferred rate (10.75%) or standard rate (14.25%) rate.

Are you saying that it's not going to show up on my credit report so that when I go buy a house next year the mortgage company wont see it? We want to pay straight up cash but we just toured the BLT and loved them and seeing you post this is making me reconsider. If what your saying is correct can you site your sourceb efore I do something crazy!!

Thx
HG

 

[rentayenta]

Are you saying that it's not going to show up on my credit report so that when I go buy a house next year the mortgage company wont see it? We want to pay straight up cash but we just toured the BLT and loved them and seeing you post this is making me reconsider. If what your saying is correct can you site your sourceb efore I do something crazy!!

Thx
HG

Sorry to interject but the pp is correct- the loan through Disney is invisible and does not show up on your credit. We just refied and it's no where to be seen. My source for the info was our DVC guide. It's true, I promise. Call DVC and ask.

 

[doctoralchick1]

I just bought 160 pts at BLT TODAY! I did NOT use Disney financing to do it.

You know those convenience checks from credit cards that you get in the mail and usually shred and toss? I got one offer with 0% APR until June 2010 with a one time transaction fee of 4% of the amount taken out. So I took out a cash advance of $15K and my one time fee was $600--that's all! I charged it on other credit cards and will be using this $15K to pay off the balances.

If I pay $15K off by June 2010, I won't pay interest. If I pay off $7K by June 2010, I'm sure there will be other credit card offers (like this one) that will pay off the other $8K with 0% APR for another year.

If you do the Disney 10 year financing at 10.75% (only for those with excellent credit scores), you will end up paying over $9700 in interest over the life of the loan--NOT a good option!

 

[HappyGrumpy]

wow! Thank You so much for that response. We are living a much more credit free life these days and using cash for purchases so before emotions clouded my judgement I wanted to hear what others had to say. Thanks!

 

[5forDiz]

what is the story with a use year? What does that mean.

It is worth taking the time to read Moderator CarolMN's Understanding Use Year thread. Here is link to it


http://www.disboards.com/showthread.php?t=1942668

 

[mickeyfan1]

I just bought 160 pts at BLT TODAY! I did NOT use Disney financing to do it.

You know those convenience checks from credit cards that you get in the mail and usually shred and toss? I got one offer with 0% APR until June 2010 with a one time transaction fee of 4% of the amount taken out. So I took out a cash advance of $15K and my one time fee was $600--that's all! I charged it on other credit cards and will be using this $15K to pay off the balances.

If I pay $15K off by June 2010, I won't pay interest. If I pay off $7K by June 2010, I'm sure there will be other credit card offers (like this one) that will pay off the other $8K with 0% APR for another year.

If you do the Disney 10 year financing at 10.75% (only for those with excellent credit scores), you will end up paying over $9700 in interest over the life of the loan--NOT a good option!

Except that the interest you pay Disney may be tax deductible. Because it is considered a mortgage. CC interest, not so much. If you can pay the whole thing off at 0%, that is great, but if you have to finance, make sure you know all the tax implications.

 

[njtinkmom]

Except that the interest you pay Disney may be tax deductible. Because it is considered a mortgage. CC interest, not so much. If you can pay the whole thing off at 0%, that is great, but if you have to finance, make sure you know all the tax implications.

Well that is good to know. I did not realize it was considered a mortgage. I can use all the tax credits I can get. Is maintenance deductible as well? I must say you guys are the best, the info is outstanding! I want to go to my "tour" of blt armed with knowledge, I am afraid they may not tell the whole story - like any downsides.... So far I have not seen too many. Well, except for paying for it LOL!

 

[mickeyfan1]

Maintenance fees are not deductible, as far as I know. I only know about the interest because my guide told me. I do not now, nor do I ever plan to, own DVC, it isn't a good deal for me. But I think it is a great plan for a lot of people. As far as the tour, it is totally low pressure. The guide explained EVERYTHING in great detail, gave me all kinds of written info, etc. The downsides for me are simple. I go value almost all the time. A DVC Studio would cost me more for the few nights I am able to go than the value, and that includes owning or renting points. I don't get to go every year. If you go moderate for 6 or 7 nights or deluxe, it is a better price comparison. But remember it isn't just room rates to room rates. Your guide will be able to answer any and all of your questions.

 

[Maistre Gracey]

Maintenance fees are not deductible, as far as I know.

Except the portion that is allocated for real estate taxes.
That portion is likely deductible.

MG

 

[rentayenta]

It is a mortgage and therefore deductible. And as far as financing through Disney NOT being a good option: to each his own! Jugde not.

 

[Maistre Gracey]

It is a mortgage and therefore deductible. And as far as financing through Disney NOT being a good option: to each his own! Jugde not.

I'm all for Disney financing. If I had the time I would elaborate as to why..

Be careful though, as not all financing is considered a mortgage. It must be backed by the property, and you must get a 1098-INT (I think that's what it's called).

MG

 

[toniosmom]

When I purchased my DVC ownership last year, I put the initial down payment on a credit card and financed the rest through Disney. However, a month later, I realized that I was paying SO much more interest with Disney than if I used my existing Home Equity Line of Credit. Right now my HELOC rate is somewhere under 4% and I had plenty of equity room left to cover it. So, I promptly paid off the Disney loan with my credit card and paid the balance with the HELOC. I did the same when I added 50 additional points this past Spring.

Note: The reason behind using the credit card was to rack up the reward points for future trips. Since I was paying the bill off immediately with the HELOC, no finance charges occurred.

Just my 2cents....