Max Points Financed

[jcf]

Before it becomes a "waste of money" or defeats the whole DVC purpose, notwithstanding interest deduction you can take.

 

[browniemtb]

As far as how many points you want to finance is strickly up to you and your point requirements for travel. DVC tends to want either 10% or 20% down and then you can finance the rest at 10.75% w/EFT or 11.75% by statement. The only tax that may or may not be deductable is the property tax portion of the maint. fees. I find this to be a negligible amount. So if you buy 160 points or a 1000 points, if you use them every year I don't believe you can classify it as a waste of money. Now if you end up with expired points year after year then that is a waste of money. Buy what you will use and go from there.......DVC is a luxery so by definition there are a lot of people that feel DVC is a waste of money.....I for one do not.

Brownie

 

[tjkraz]

Are you asking for a maximum number of points that should be financed?

If so, I think a lot of people will give you the answer ZERO. DVC is a luxury item and most feel that having to finance is an indication that you aren't financially prepared to deal with it.

I would add a slight asterisk to that argument. I think financing DVC may still be wise for those who have an established track record of visiting WDW annually or every-other-year. I assume there are many people who can afford to comfortably save $2,000 - $3,000 for a trip to Disney every year or two. Yet these same people may not have $15,000 in disposable income sitting in the bank to use for a DVC purchase.

For those folks, I personally think that buying DVC (and having to finance) still makes sense. Even with paying interest on the DVC purchase, in the long run those people are still going to save a lot of money over paying $2-3K cash each year for their trips for the next 30+ years.

Those who pay cash for a DVC contract will usually find that they break-even on the purchase in about 6-8 years. Adding interest may extend the breakeven to 10-12 years, but in most cases that still leaves 30-40 years of low-cost vacations. DVC also has a high resale value meaning that people could sell and recoup most of their investment as long as they hold the contract for a minimum of 3-4 years. That fact makes it a pretty low risk venture.

As for how many points to finance, I would suggest starting with the minimum (160) and go from there. If you have enough money to finance more than 160, I think you'd be better served buying the minimum and making extra payments so that you don't take 10 years to pay it off. Once the initial purchase is paid off, you can add additional point in increments as low as 25 pts.

If you buy more than 160 points, you'll probably use the excess to plurge on larger rooms and high-priced weekend nights. Sticking with the minimum will force you to economize a bit until you can really afford more.

 

[I'mNoPrince]

TJKRAZ Thats us we were going every year sometimes 2 times a year. But we don't have that type of money to just plop down. We looked at what we were spending each year (both saving for and charging and paying later )and it just made sence to to jump in Oct 05 of 170 points SSR.

Now I get to make a monthly payment and not have to worry about saving for our vacations. Even with the Fin charges we will still come way ahead of things even at the 10 year mark . When I looked at how many points we could afford I looked at what we spent the year before and divided it by 12 that was the about number with Main fees included.

We will pay it off early as we will add what we can once we get our last CC paid off.

I just wish we would have done it a few years ago and even saved that money we spent.

Just for fun I'm going to start to keep track of how much the same Room only through CRO would have cost to compair my savings.

 

["Got Disney"]

Dont forget that you can also write off the interest... if you finance.

We make enough $$$ to take vacations when we want but there is something said taking it cheaper with DVC. Our friends who are millionairs have 900 pts and can afford any trip they want but they save more $$$ going to Disney with pts....better bang for your bucks.

We have fincanced but will be paying off faster. We right off the interest and we would rather keep all of our cash in the bank incase of emergencys.

We have 400 pts and will purchase 150 more when DL/GC comes about.

We do DL often because we live in SD and do the cruise every year(we do not us pts for the cruise we pay cash).

 

[pilferk]

Are you asking for a maximum number of points that should be financed?

If so, I think a lot of people will give you the answer ZERO. DVC is a luxury item and most feel that having to finance is an indication that you aren't financially prepared to deal with it.

I would add a slight asterisk to that argument. I think financing DVC may still be wise for those who have an established track record of visiting WDW annually or every-other-year. I assume there are many people who can afford to comfortably save $2,000 - $3,000 for a trip to Disney every year or two. Yet these same people may not have $15,000 in disposable income sitting in the bank to use for a DVC purchase.

For those folks, I personally think that buying DVC (and having to finance) still makes sense. Even with paying interest on the DVC purchase, in the long run those people are still going to save a lot of money over paying $2-3K cash each year for their trips for the next 30+ years.

Those who pay cash for a DVC contract will usually find that they break-even on the purchase in about 6-8 years. Adding interest may extend the breakeven to 10-12 years, but in most cases that still leaves 30-40 years of low-cost vacations. DVC also has a high resale value meaning that people could sell and recoup most of their investment as long as they hold the contract for a minimum of 3-4 years. That fact makes it a pretty low risk venture.

.

Just to add to that sentiment.....short term financing (their 1 year option) or even using a longer term with an eye on short term payoff (since their's no penalty) are also good uses of financing.

We financed over 5 years, but will have our loan paid off in about 18 months. We chose that option because a) a good chunk of our savings was in termed CD's, etc, and we wanted to leave it there til maturity when it will promptly go toward DVC and b) the savings we DO have that's "liquid" or can be liquidated quickly is earning us more than the financing %...so it was better off staying where it is.

 

[tubtruck]

It also depends on how long you take the loan out for and how quickly you pay it back, personally my loan was taken over ten years, my first payment was in November 2006, I made my final payment in March 2007 only five months later, so not a lot of interest was paid, all depends on how you work things out. Some say NO to finance, personally I think it depends more on ability to repay and how quickly.

 

[jgus]

We financed because of other things going on in our family. We're building a house and having our first baby. We have the cash in the bank, but chose to finance and will pay it off in 2 years. This is due to the unknowns coming up in our life.

Even if you were to take the 10 years to pay it off, I still think it's a good deal. You are locking in a lodging price for 50 years!

The main question is what is reasonable in your own eyes and what can your family afford...