Got Info Packet From DVC--Now Have Questions

[tjkraz]

This new offer at SSR finally has my wife and I seriously considering DVC. Last week I spoke to a Guide for the first time, and then waited (rather impatiently) for the literature to arrive.

While the package was very high in the "flash" department, I think there is a lot of substance missing. Hoping some of you vets can answer a few questions.

What is the current interest rate for 10-year financing through DVC? I thought I saw a 9% figure floating around these boards, but the sample financing chart DVC provided showed a 13.5% rate.

Is the interest rate fixed or variable?

Where does the $10 per point incentive fit into the equation with respect to the downpayment? If I want (or need) to put 20% down, is the $1500 considered part of the downpayment, or is it taken right off the top before calculating the DP?

Given the special curcumstances surrounding the May 1 opening of the resort, when does the downpayment actually change hands? When is the closing? Do I close now and just start paying in May?

Thanks in advance.

Tim

 

[disneycrazed139]

Wow! 13.5? Why don't you call them up and ask them about it and ask them if you can finance it lower than that? That's like a bad credit card.

It's sounds like they are recouping their 1500 through demanding a higher interest rate. I can't imagine there would be too many buyers who would want to finance through Disney that way. For me, they actually put the 1500 towards the down payment, which was fine with me. It was not calculated off the top so to speak.

I'm going to call my guide tomorrow. I have questions, too.

 

[tjkraz]

disneycrazed139,

Yeah, I couldn't understand that myself. The rate comes from a one-page flyer that was included in the materials which shows the monthly payment amount at different point purchase levels and financing durations (3, 5, 7 and 10 years). The interest rates increase in 1/2 percent increments from 12% at 3 yrs to 13.5% at 10 yrs.

Part of me wants to think that the rates indicated were given just for illustration purposes. But the document has a revision date in the lower left of 5/28/03. In this economy, why would they lead people to believe that these rates are close to reality if they are actually much lower?

At the bottom of the form it does state that rates are subject to change monthly, so hopefully these are just really poor examples of the financing rates.

In addition, this document, which specifically lists "Disney's Saratoga Springs Resort" at the top, doesn't even take into account the $10 per point incentive. All of the figures are based off of a $89 per point rate. I guess you could argue that this is OK since they are offering the "free vacation" incentive as well, but it's clearly presenting the best available option.

I plan on calling my guide in the morning to clarify, but just wondered what sort of feedback I'd get tonight.

 

[disneycrazed139]

Incidentally,

I have a 9.75 rate assuming direct debit. This is still teribble, but I intend to pay it off soon, rather than have it for 10 years. Over the course of the loan for a 150 point purchase, this amounts to over 6,000 in interest! No way for me. This rate is much better than what an outside Timeshare financing agency would give (11-12)

Maybe Disney has increased it in the last week?

 

[disneycrazed139]

I've also read on here that if you put 10% down your rate is a point or two higher than if you put 20% down.

 

[dianeschlicht]

If you can, I would do a home equity loan. That way, you can get the intertest benefits etc.

 

[Kris517]

We are just joining now too and I think I can explain the discount offer part...

For 150 points, as an example, you are on paper paying the $89 a point and all the financing and down payments are based on those numbers. Then Disney kicks in the $1500 towards your down payment so you would be actually putting more than 10% down.

We paid the $500 deposit, then when we return the paperwork, we will give the 10% down. So up front you will have the $500 + the 10% down (based on # of pts X $89) and then tack on the Disney credit (1500 for 150 pts).

If you are financing, there is no interest until April 2004 due to resort opening late. If you want to pay up front, I believe it is due within 30 days.

 

[Zurg]

I would look around for other financing. See what you local bank can do for you.

 

[DemoBri1]

I would echo Diane's and Zurg's suggestions. Look around for better loan rate than what Disney is providing. You will come out in the end and get the income tax benefits with regards to the interest you'll be paying.

Brian

 

[floridafam]

You have to put $500 down to get the paperwork going.

This will also be credited as part of your down payment.

Pts are $89 a peice. The credit they are giving is $10 a pt.

You have to put down 10% of your own money. Let's say you buy 100 pts. Your total is $8900. You have to put down $890 if you are also going to use the credit Disney gives you of $1,000.

Assume you have already paid $500. You would need to send an additional $390 back with your paperwork.

$8900-$1,000 credit+$7900-$890=7010. 7010 would be the amount that you finance.

The interest rate is 10.75 for a 10 yr finance. They reduce this to 9.75 % if you use direct debit.

$7010 at 9.75 for 10 yrs is a payment of around $91.68 per month.


I believe SSR payments do not start until next May.

 

[GAIL HAYDEN]

Originally posted by dianeschlicht
If you can, I would do a home equity loan. That way, you can get the intertest benefits etc.

We get the interest benefits even financing with Disney. Check with your financial advisor.

 

[CarolA]

Disney does not have the best interest rates. I would think about "financing with Disney" until it actually comes due (April 2004) since that is basically free money. Then if you have not Paid your savings account enough to pay it off, look for a home equity type loan.

Also, while you may be able to claim your interest with Disney some other loans may not qualify. I did my first DVC with a resale financer and it did not qualify for the home interest deduction since it is set up as personal loan.