How did you finance DVC?

[deerh]

Ok, not sure how to do a poll so here goes. How did you finance your DVC? Did you pay it off at closing, 3 years, 5 years, 7 years or 10 years?
deerh

 

[DVC1996]

I haven't voted because there is not an option for how we financed. In 1996, DVC had an option of putting one-half down, and then paying off the other half in one year with no interest. So....this is what we did.

 

[yasuern]

To clarify we will have our original DVC/VWL purchase paid off in 2005 and our resale(not even final yet) at OKW paid off by 2007 - so from 2007 until 2042 we stay free at WDW

 

[DebbieB]

I saved money, cashed in a CD, and borrowed from my 401K (3 years but paid off in 1 1/2). I charged the purchase on my AOL Visa, DVC split it into 2 months, got 6 or 7 months free AOL and paid the bills when they came, so no interest there.

 

[AnnaS]

It would not let me vote, something about my session invalid. We bought original, bcv add-on and okw add-on and paid each off at closing.

 

[erikthewise]

I paid it off at closing with a Hilton American Express card, and will soon pay that off with a home equity line. I will have paid half of it by the end of summer, and the rest will just fade in the compost heap of home equity.

We just spent two nights free in an Embassy Suites on the Hilton points we got, and there's more left over!

 

[ncligs]

For our OKW pts(300) we put half down and financed through our 401K for 1 yr. For our VB pts (200) we were lucky enough to pay cash(on credit card for FF miles) at closing for the 3 add-ons. So for the next 39 years all we have is the dues.

 

[Doctor P]

First time we bought we put about 35% down, borrowed through Disney for 5 years, and paid it off in about 1 year. We paid cash for our add-on.

 

[Maistre Gracey]

I am in the process of doing the "credit card shuffle". I am paying of my DVC in two years, almost interest free by taking advantage of the credit card teaser rates. It takes a little work, but it will save a lot of cash. I will not consider DVC paid off until every dime in "the shuffle" is paid off...I just hope they keep sending those 0.0% 6 month intro rates!

 

[4greatboys]

Maistre Gracey--we got a couple of offers in the mail 0% til Nov 2003. I am also doing that shuffle now. I think its worth the effort for 0% and I can talk dh into to more things like dvc if I can show him Im really saving him money

 

[WDWLVR]

I didn't vote in the poll either because like Harriett we put 1/2 down at closing and paid the other 1/2 off in one year.

Our dues we just pay once each year and then enjoy the benefits!

 

[Mai Ku Tiki]

We put 20% down (over phone) on our AMEX with 2% cash rebate-BCV.

Then right before DVC payments were to begin a few months later, we paid off the balance on a new VISA with 0% for 6 months AND a 1% rebate! AMEX won't let you pay balance using their card .

Will do the 'Maistre Gracey' shuffle for as long as we can, then pay off balance with Home Equity check (around 5% interest) so that we can write off that interest on our taxes. Plan to be rid of entire loan within 3 years

 

[DVC-Don]

We put 20% down and financed the rest with Disney for 10 years. Then a year and a half later paid that off with our Southwest Visa card to get a free round trip voucher and the paid that off with a home equity line of credit. That should be paid off in 4 years.

The resale was done with the line of credit.

 

[VMS]

We too put 1/2 down and then paid the remainder in a year. This was not one of your polling options listed.

 

[Cruelladeville]

Interesting poll! It was very educational to hear about everyone's creative financing options to save a lot of money. Now I know what to do next time--I'm almost ashamed to say that I put 20% on one contract and 50% on the other one on my AMEX card, and paid that off 30 days later, then financed the remainder of the loans for 10 years for the low monthly payment, then paid extra to get that paid off in 3 years. Both add-ons were paid for with cash, and this year I rented my extra pts, which gave me enough cash for the down payment for a resale next year. You all had better ideas, but I did receive a credit card offer for 0% for 1 1/2 years in ther mail today, and you have taught me not to throw those things out. Thanks for the education, everyone!

 

[deerh]

I financed for 5 years, and hope to pay that off soon. I LIKE the interest of a second home at tax time! It does make a difference. I DO NOT like the interest rate charged by Disney, but can't help that, and I DO NOT like home equity loans tied to my house, been there, done that and got real nervous about it, so I don't do home equity lines of credit tied to the house. I like the idea of 0% interest on the cc though, I get 2-4 of those a month! That is a good idea!
deerh

 

[Mai Ku Tiki]

Any IRS gurus out there???

I notice a few mentioning that they claim interest on loan as 2nd home? Even when not tied to a home equity line of credit??

I thought only the portion of dues listed as property taxes could be claimed ???
Thanks!

 

[deerh]

I notice a few mentioning that they claim interest on loan as 2nd home? Even when not tied to a home equity line of credit??

Just thought I would let you know, I am not an IRS guy (or play one on tv LOL), but you CAN under certain instances claim your timeshare as a second home (the interest part that is), That is why I financed for 5 years, and may not pay it off early. You can also claim the real estate portion of your dues (about 20% or so of the total dues) on your taxes as well, DEPENDING on your circumstances. You can also claim it as you know as a Home equity loan. That is why I am not so sure of the "credit card shuffle". Knowing my luck, I would miss a date and be charged the interest of one of those credit cards on the 7th month (if the first 6 months are interest free) and get slammed by the interest, and that is NOT tax deductible interest. But, too each his own, but yes, to answer your question, Disney finaced timeshare COULD be tax deductible depending on your status....
deerh

 

[anniet]

I financed mine for 10 years to keep the payment low, but have been sending them extra money and I hope to have it paid off in 4 or 5 years, since there are not penalties for paying early.

Also, one of the documents I signed with Disney is titled "Short Form Mortgage Agreement" and I was told at closing that the state of Florida considers DVC and other timeshares real estate. I was also told that I will be receiving a tax form at the end of the year and I should take it with me when I have my taxes done.

 

[BigTigger]

DVC interest expense on mortgages is fully deductible on Schedule A as a second home under IRS regulations with one exception - that relating to usage. If you and only you use the points then it's 100% deductible. Same if you gift the points to others. If you sell or rent your points then the property is still a second home, but you have to apply the usage rules which would disqualify you from deduction. The taxes are also fully deductible on Schedule A. One thing to note, unless you have a first home mortgage, the interest alone on the DVC mortgage may not give you enough deductions on Schedule A to bring you above the standard deduction amount. The key thing to remember is the fact you have a deeded interest in the property. This is the key factor in IRS determination of deductibility. It could get sticky if you have multiple DVC interests, as the IRS makes you choose which second home you want to deduct. I'm sure they wouldn't know about multiple deeded interests as DVC issues only one Form 1098 for interest paid.

More information can be found at:

http://www.irs.gov/pub/irs-pdf/p936.pdf