is it still a good deal if you finance?

[lexiluke]

My husband and I are looking into DVC, but is it a good investment of your vacation money if you have to finance the buy, or does DVC make more sense when you can pay cash for your points?

Thanks for any advice.

 

[anniet]

I financed because i did not have the cash to pay up front, but I have enough money put into my savings each month to comfortably have them take the monthly withdrawals AND still save some money. Plus you can send them more money any time you like, so between my yearly bonuses (I work in sales) and my tax returns I intend to send them an additional $2000-3000 per year. What I financed for 10 years, I intend to pay off in 5. If I just make the payments and take the 10 years, the 10.95% rate will add an additional $5908.50 to the cost, so I also put myself on a budget so I won't be throwing away money on stuff I don't really need anyway anymore. When my savings starts to get where I'm comfortable I'll send them more money.

I also have a friend who financed, but at 10.95% the rate is kind of high. She is refinancing her house to get a lower mortgage rate, and she'll take out enough cash to pay off her DVC. Unfortunately I don't own property so equity loans aren't an option for me.

If I had the cash, I would have paid cash up front, but I think only you can really answer the question.....how much do you really want to own the DVC, and are you willing to finance?

I do have to say that I really don't mind the budget at all. Knowing DBF and I are going to be spending 10 days in a resort I've visited in the past, but never dreamed I would stay in is priceless to me!

 

[#1Mouse]

If you are able to pay cash for the whole thing, by all means do that - it sure beats paying a finance charge. We did finance 80% of ours by getting a home equity loan. Our Credit Union was offering a special rate of 1.95% for 4 months and then prime after that (currently 4.75 or 4.95%). There was a minumum to borrow of $25,000, we used the $15,000 for DVC and invested the other $10,000. We can only make minumum payments for the first 4 months (otherwise there's a prepayment penalty), then after the 4 month time frame we can make additional payments and can pay it off at anytime. We definately only look at DVC as a vacation investment and did not purchase it for a financial investment. Oh, and another plus the intrest we do pay is a tax deduction.

Ok enough rambling - IMHO DVC can be a good deal even if you finance, as long as you don't overextend yourself financially. Look for a good rate. Disney has "convienent" financing but their rates are way too high.

 

[DaveH]

We had to finance because that is the only way we could do DVC. When we were looking at it and they were talking about break even point, I used the final cost including interest and the break even point for me was a little longer than if I paid cash but it made sense to us and we can do the payments and the dues in monthly payments. We are able to offord the payments and still other things including vacations.

 

[HappyPlace]

1. You financed with Disney.

2. You have an Air Miles Credit Card.

3. You want to start paying a little extra on your DVC mortgage.

4. Use your credit card to pay off your DVC and collect the air miles.

5. Don't forget to pay off the credit card.

 

[jimmytammy]

At any rate make sure you can make the payment. We financed through DVC at the %10.95 rate but I put in extra time on weekends to pay for it so it doesnt come out of weekly check.

I told DW that my intentions now are to send in extra $$ when available while still not hurting ourselves by dipping into other resources.

Another consideration for us is going to our equity line while rates are low, totally paying off DVC trying to pay off equity quicker.

Only problem with that is rates WILL go back up and messing with house that is soon to be ours ( 4 more yrs. ) is risky business so we really have to weigh that option out.

Not meaning to hone in on your original post here but if anyone has used equity line to payoff DVC how did or how is it working for you?

 

[lexiluke]

Thanks for the helpful comments. I think we could cut out some of our more frivolous expenses (eating out, etc.) and almost pay for the monthly finance payments.

After spending some time on this board and reading about what a great time you guys have at the DVC resorts, it's really hard to wait until we have the cash in hand! Some day we'll turn around and our kids will be grown, then we'll wish we had done it sooner.

I'm glad to know that financing is working for others.

 

[Rock'n Robin]

Financing works for us--it comes out of my credit union so I don't really miss it (in my fantasy world I don't even get paid if it isn't in the "net" check). It will be paid off eventually--when we pay off our credit cards we'll start paying more on it. Plus the interest is tax deductible.
It is all worth it when we have a great vacation and owe nothing on the room.
Robin M.

 

[DVC-Don]

Originally posted by jimmytammy

Not meaning to hone in on your original post here but if anyone has used equity line to payoff DVC how did or how is it working for you? [/B]

We just did this. We financed through DVC 1/01 @ 10.95% with 20% down. Just two weeks ago I called MS Accounting and paid the balance off with my Southwest Visa card. (got enough credits to get a round trip voucher). This coming Monday, I'm going write a check from our home equity line of credit to pay the credit card off. The HELOC rate is 4.75%. We were paying about $158 per month on the DVC mortgage, but now we are budgeting $200 per month towards the HELCO.