First question

[Master Gracie]

Ok, my wife and I are discussing the DVC and I have a question. If we have done the math correctly, 250 points would cost us $22250. My question is this. If you finance through Disney, how long do they normally let you pay on the total? What are the payments like, that kind of thing.

Any help you could give me on this would be greatly appreciated.

Thanks in advance.

 

[Disney Doll]

When we bought in 1997, they offered 1, 5, and 10 year financing. We chose 10 year, because it gave the lowestpayments, with the thought that we'd pay more each month and get it paid off quicker, but if once in a while we were a little tight on money, it would be nice to only have to pay the low payment. That is exactly what we did, and we actually had it paid off in about 4 years.

I don't know if they still do it that way, but if they do, I recommend it, as long as you have the financial self-control to pay a bigger maount than you need to. The DVC really starts to make sense once it is paid off.

 

[rocketriter]

By the way, your calculation might be a little high--which might leave you more room for a nice down payment.

Like a previous poster, we also took Disney's 10-year financing and are paying it off more quickly.

 

[Caskbill]

Do you have a home? You might possibly consider a home equity loan. Our DVC is now paid for but we still use the home equity to purchase a new car every few years. Purchasing DVC would basically be the same. You just write a home equity check to pay for your purchase.

The interest rate is lower than Disney's, and our bank simply has a minimum that is set to 1/2% of the outstanding balance. We always pay much more than that each month, but as others have mentioned, if things are tight one month, you're not saddled with a high payment.

Example: for our bank the current interest rate is right at 4%, and on a loan of $22,000 the minimum monthly payment would be $110. Generally we pay anywhere from $500 to $1000 each month, depending on finances that month. Obviously paying the minimum would stretch payments out into several decades, so we try to make payments so to pay off the loan in 3-years or less.

 

[tjkraz]

Assuming you're looking at Saratoga Springs, 250 points at $89 per point is $22,250. If you wish to finance through DVC, you must put at least 10% down. Any potential problems with your credit rating may prompt DVC to ask for 20 or 30% up-front.

But with 10% down ($2225), your base financed amount would then be $20,025. DVC is then offering two different promotions for SSR. The first option would be a flat $5 per point discount. That would take your financed amount down to $18,775.

The other option is a program that DVC calls Magical Beginnings. Under MB you actually sell your first year's worth of points back to DVC and they give you $10 per point. If you go this route, you would only be financing $17,800.

These two promotions cannot be combined. You pick the one that best suits your situation.

The remaining financed amount can then be paid over a period as long as 10 years. Interest rates will vary depending upon the term to which you commit. The lowest interest rate you can get over 10 years is 9.75%, and that's assuming you agree to direct debit of your monthly payments. If you want to actually write a check each month, DVC will bump-up the interest rate by 1%.

As the other posters have said, you can always make additional monthly payments simply by calling DVC accounting. There are no pre-payment penalties.

If you commit now with DVC financing, there will be no payments or interest accrued until your resort building opens--likely June '04 or later if you choose a Use Year of July or later.

I'll let you do the math to figure out what your payments would actually be. But bear in mind that Annual Dues must also be paid. SSR dues are $3.80 per point this year, and can be spread out over 12 equal monthly payments for inclusion in your debit amount. For 250 points, count on about $80 per month for 2004 dues.

If you choose to exercise the Magical Beginnings promotion described above, you still are responsible for the full dues for the year's worth of points that you sell back to DVC.

By contract the dues can increase up to 15% per year, but historical averages at the oldest DVC property are only 3-4% annual increase.

 

[Master Gracie]

Thanks for all the information. As is often the case, answers give birth to new questions.

Could I make reservations before I finish paying off the 20k? Or would I have to wait until it was all paid off? Also provided I continued to pay the annual dues, how long would I get the points? Or, more succinctly, is there an expiration date on the program?

 

[dianeschlicht]

Originally posted by Master Gracie
Thanks for all the information. As is often the case, answers give birth to new questions.

Could I make reservations before I finish paying off the 20k? Or would I have to wait until it was all paid off? Also provided I continued to pay the annual dues, how long would I get the points? Or, more succinctly, is there an expiration date on the program?

You can make reservations as soon as they have a deposit and you are accepted. Your points are valid until 2042 for most DVC resorts and 2054 for SSR. It is able to be willed to your heirs, but it does have an end date.

 

[jmminarik]

Originally posted by Master Gracie
Thanks for all the information. As is often the case, answers give birth to new questions.

The quest for knowledge is never ending...or something like that.

Originally posted by Master Gracie
Could I make reservations before I finish paying off the 20k? Or would I have to wait until it was all paid off? Also provided I continued to pay the annual dues, how long would I get the points? Or, more succinctly, is there an expiration date on the program?

As soon as the paperwork is completed, you can begin making ressies. I've read tales of people who bought while on vacation and immediately moved out of their hotel and into their new Home.

SSR contracts go for 50 years. The other resorts will all 'expire' in 2042.

-Joe

 

[Chuck S]

The expration date for all resort contracts (except SSR) is January 2042. SSR is 2054 (and I believe January as well).

 

[pumpkinboy]

Originally posted by Master Gracie
Could I make reservations before I finish paying off the 20k? Or would I have to wait until it was all paid off? Also provided I continued to pay the annual dues, how long would I get the points? Or, more succinctly, is there an expiration date on the program?

You may start making reservations as soon as you get your temporary member cards.

Also it might make sense to get int touch with the DVC sales folks at this point, as they will send you lots of cool info on the buying process. Your DVC guide can advise you on the probable number of points you're going to need, and of course on the mundane details such as financing, downpayments, etc. I will send you a PM with our most excellent guide's name and number as soon as I locate them here on my desk (now where did they go...).