Financing

[dgb]

Do many of you finance your points? We really want to add-on, but we won't be able to for a while, unless of course we finance. I'm wondering if financing points takes away from the value of them? Does all the interest you have to pay negate any savings on accomodation? Is it worth it to just save?

 

[TiszBear]

I financed my inital contract (200 points) and my second add on (100 points). For the third add on I saved (I only bought 50 points this time). I don't think it takes away from them but you do pay more in the long run. But I had my payments taken out of my checking account each month and whenever I could I always paid more on principal. I was able to payoff the first contract about 2 years early and the second contract a year early.

I do know that the interest rate was a little more thru Disney then if I wait to a bank but this way since I finance thru Disney it didn't hit my credit report.

Good Luck. It really comes down to what you really want to do.

 

[hellerjw]

I financed both my initial contract and recent add-on for 10 year terms. It does add some to the overall cost analysis, particularly if you carry the financing to term. However, we plan to pay off both loans within 5 years of opening them. For us it was more important to start vacationing with our kids while they are young than postpone the enjoyment until we had cash.

We are now part of DVC and have enough points to go at least twice a year for a week to 10 days each time. If we waited until we had cash we wouldn't have already been twice as a DVC member (going again in a month) and certainly wouldn't have been able to add-on so quickly.

Our loan interest is tax-deductible (should be for most people, but check with your tax adviser) and the loans don't show up on a credit report. The 10.75% interest DVC charges is in line with other personal loans out there but with the 2 added benefits above.

For us financing was a win-win scenario.

 

[Disney_Villain]

We use our home equity line of credit (roughly 5% interest).

 

[lowepg]

I dont think the cost of cash/credit is much different here vs anything else you buy.

Look at another depreciating asset- your car.

I chose to finance our last car rather than wait till I had $37K saved for a vehicle Does the car cost MORE since I financed? Yes, but its worth it to me, and I figure that into the decision.

For DVC? We'll probably finance short term to takre advantage sooner. Will it cost more? yes. I enjoy crunching the numbers- and I calculate the cost of money, but you cant ignore the intangibles (a few more sets of memories).

What I DO get frustrated with are the cash-only snobs who presume to tell others the ONLY way to go is if you can pay all cash. I wonder if they buy their cars the same way

 

[Coach Rick]

What I DO get frustrated with are the cash-only snobs who presume to tell others the ONLY way to go is if you can pay all cash. I wonder if they buy their cars the same way

Yes and the world would be a wonderful place if we never needed money, wouldn't it. Only way we could do this was financing, but let me tell you the memories we now have far outweigh what we have or will pay in the future. We bought in 02, and it was with the intention of banking 03 points, and taking my parents and sisters family with us in 04. That trip was THE trip of a lifetime. Everything was perfect. Here we are 4 years later and dad is presently in a nursing home with incurable liver disease. We certainly would never have built those memories without DVC. I would have paid any price to have that memory. Of course now we have added on twice, and about to do a third add on at BLT.

Yes it's easy for the "number crunchers" to criticize but for us it's all irrelevant. It is only now that we have entered our 50's we are realizing just how precious time together can be and is. All I know is, I could die tomorrow and my kids might not be able to say, wow look all the money dad left us, but they will be able to say, remember this trip, remember that trip. That to me is "legacy".

 

[mgroshans]

i agree with lowepg and coach rick, we just financed ours for 10 yr term thru disney a couple of weeks ago. our first payment isn't due until nov. 15, but have already made a payment towards principal. we were approved standard financing even though our credit score were 740 and 735. our closer said a lot of people are getting standard, very few preferred. we will pay it off in 5 yrs also. a lot of people are financely (sp?) sound, but don't have $9100 to fork out. bottom line- we will have SEVERAL years of great family vacations with no regrets!

 

[Rlbren]

It's so good to see a positive Financing thread. My dh and I are closing on our DVC in the next few weeks and will be financing through Disney. This is the only way we would be able to get in now. If we waited, then we would be in our 50's trying to buy DVC with cash and the price would be double what we're getting ready to pay. I'm sure we will also make extra payments if cash permits, but we're happy with our decision. We'll be empty nesters in a few years and I don't want this time we have left w/ our children at home to get away from us.

Life is short and I'm not wasting another day!

 

[mgroshans]

couldn't have said it better myself. good luck with what you decide to do.

 

[ericamanda01]

We financed both our first and second contracts and never regretted it for a second. Our payments come right out of our checking and each year we have made extra payments when we get our tax return. If we pay it off early great, if not, oh well, either way we have loved every vacation we have taken in the two years as members.

 

[TMB1203]

We financed.
I guess it depends on how you look at it. Yes, the interest rate is higher than a HE loan but comparable to a personal loan. We haven't paid too much extra on the loan and I'm not sure if I will. Right now, we still have 3 years left on the loan, maybe when I'm not paying daycare I'll put more towards the payment

However, when we bought in 2001 we paid $75 per point. Now BLT is $112 at most, $105 at best. So, potentially we saved $6k in principle by buying in when we did. It has been evened out by the financing (see the postive spin in this sentence)....

We have taken countless fantastic trips with our kids, parents, siblings, nieces and nephews since we have bought. None of which would have happened if we didn't purchase DVC. So this makes it worth it to us.

 

[penlanspice]

If I add on 100 points anyone know the max amount of years for financing?

Do they do financing on your credit score? we paid for our first contract with a loan here in the Uk but last year we got into some debt (all sorted now) which has given my hubbie bad credit, just wandering if we would get financing with them?

Thanks

Sam

 

[honeymo78]

We are financing our intial purchase (july) and our new BLT addon. Our credit scores were good, but not great and still got preferred (not sure how that happened). I think we'd like to pay it off in less than 10 years but who knows. The bulk our our tax refunds go to vacation so we may add that on to our montly payments (or just use that to fund our monthly payments).

Can anyone give me the tax code provision for deducting our interest. I really should know it considering I have an LLM in tax, however its been almost 5 years since I've touched tax - pharma defense currently pays my bills.

 

[hellerjw]

In our particular situation (and most likely the case for most folks) the loan interest is deductible as mortgage interest (like a 2nd home) and you should receive an interest statement at the end of the year. You would need to check with your tax preparer on how it may apply to your particular situation.

 

[spiceycat]

definitely. finance each one of them - okay brought bwv in 2 installments - so that one was cash.

the others were financed - generally also paid them off early.

been looking at it again for BLT.

just not sure - though I would love it.

 

[lockedoutlogic]

It's probably a personal choice between two things:

1. Not being able to save a lump sum for purchase and/ or not willing to forgoe the usuage until savings can be made

2. Not wanting to pay more.


I would say if you absolutely cannot or do not want to wait for whatever reason....then go ahead and finance

If you are an existing member, or not completely dedicated to the DVC idea.....i would wait and attempt to purchase cash


You do pay more on the financing....that's a pretty common basic economic fact that tends to be pushed aside with "it doesn't cost that much more" kinda comments...

It doesn't matter how much more it costs....the fact is you are paying more for the same product. There's no way to interpret this any other way....if you finance....you are paying a higher price for the points. And over the whole life of the contract....including current, upcoming, and past vacations....

With something a timeshare.....which is in no way anything close to a necessity....it is prudent to make every attempt to not take out a loan or finance....

just my opinion