Refinancing a DVC loan

bugzy

Earning My Ears
Joined
Jun 19, 2013
Messages
23
Happy New Years folks. We purchased DVC back in 2012 and since that purchase we have had a few life events that we didn't expect back in 2012. Wife lost her job 2 weeks after finding out she was pregnant with our first child. While the layoff was a blessing due to the hard pregnancy she had, we are now coming to the reality of that DVC may not be sustainable in the future if she is unable to entire the workforce soon.

My question is has anyone refinanced there DVC loan (we financed through Disney and have a crazy interest rate) and would like to lower that if possible. Anyone have suggestions on doing that? Thanks in advance for the answers.
 
Unfortunately I don't think you can refinance or lower your rate through Disney, you would most likely have to find a new loan, via a bank or something with a lower interest rate and pay Disney off.
 
Could you take out a home equity loan or line of credit? Use that to payoff your Disney loan now, and pay that back with a much lower interest rate. While it's not advisable to use your house as collateral for a timeshare, I would say it's better than Disney's crazy interest rates if you're confident you can make the monthly payments. Good luck!
 
Happy New Years folks. We purchased DVC back in 2012 and since that purchase we have had a few life events that we didn't expect back in 2012. Wife lost her job 2 weeks after finding out she was pregnant with our first child. While the layoff was a blessing due to the hard pregnancy she had, we are now coming to the reality of that DVC may not be sustainable in the future if she is unable to entire the workforce soon.

My question is has anyone refinanced there DVC loan (we financed through Disney and have a crazy interest rate) and would like to lower that if possible. Anyone have suggestions on doing that? Thanks in advance for the answers.
You might be able to save a little but not enough in this situation. Light stream was cheaper but only by a couple of % last time I looked a few months ago. This doesn't sound like the dollars that you need at present.

Could you take out a home equity loan or line of credit? Use that to payoff your Disney loan now, and pay that back with a much lower interest rate. While it's not advisable to use your house as collateral for a timeshare, I would say it's better than Disney's crazy interest rates if you're confident you can make the monthly payments. Good luck!
I would say this is not a good plan. Better to have it foreclosed or lost than risk your house IMO. You'd just be digging a deeper hole as I'm guessing DVC isn't the only financial portion of the difficulty at present.

I'd say sell it, you can always buy again (resale for cash) when you get back on your feet. I'd hold this opinion even if it's worth less than you owe and have to pay to get rid of it.
 


Taking out another loan...a second loan...to pay for a timeshare seems like an unwise move.

That's just my first reaction without getting deep into it.
 
If you have equity in the contract; if you owe less than its worth, sell it.
 
I agree that a Home Equity loan or Line of Credit (HELOC) is a great way to get a low interest loan. If you can easily make your DVC payment with a lower interest rate then this could make a lot of sense. (I also agree that it's not worth risking your house if there is a chance you won't be able to make this payment). We have a HELOC that is less than 2% interest for the first year and then goes to about 5% interest (which is variable according to Prime rate). We plan to pay this off in the next year (ours is not for DVC purchase however).
 
Why not just rent out your points for a couple years. That would cover your MF and a good part of your loan payments
 
If you have equity in the contract; if you owe less than its worth, sell it.
It's worth running the numbers, I see Aulani points listed between $101 - $120, but I think OP bought direct from Disney @ Aulani only a couple of years ago, so to sell he might have to bring $$ to the table.
 
It's worth running the numbers, I see Aulani points listed between $101 - $120, but I think OP bought direct from Disney @ Aulani only a couple of years ago, so to sell he might have to bring $$ to the table.
If that's the case, OP probably needs to evaluate the effect a foreclosure would have on his credit. Right now, the DVC contract is the only thing at risk, but refinancing with a heloc or even pulling equity out of a car to refinance the loan would put more, and more important, assets at risk.
 
I would say this is not a good plan. Better to have it foreclosed or lost than risk your house IMO. You'd just be digging a deeper hole as I'm guessing DVC isn't the only financial portion of the difficulty at present.

Possibly, but if the loan payments are the only factor and a lower interest rate would help, I would still opt to go with a home equity rather than allow it to foreclose. A foreclosure of any kind will be a big detriment to their credit. A home equity loan or line's interest rate could be as low as 2 or 3%. I'm not sure what Disney's interest rates look like, but would guess it's north of 10%? Depending on the principal, it could save them $50-60+ a month, which may be worth it to them. If they go with a line, that can be kept open once paid off and may be able to be used for other things as well.

But I do agree if there are other financial hardships, it would not be a good idea to put the house on the line. And if other bills are late, they may not be approved for a home equity anyhow.
 
If that's the case, OP probably needs to evaluate the effect a foreclosure would have on his credit. Right now, the DVC contract is the only thing at risk, but refinancing with a heloc or even pulling equity out of a car to refinance the loan would put more, and more important, assets at risk.

disney does not report to credit bureaus so i believe a foreclosure would have no effect on their credit.
 
disney does not report to credit bureaus so i believe a foreclosure would have no effect on their credit.
A foreclosure would be a court proceeding, so that would be reflected as a public record on the credit report.
 
Possibly, but if the loan payments are the only factor and a lower interest rate would help, I would still opt to go with a home equity rather than allow it to foreclose. A foreclosure of any kind will be a big detriment to their credit. A home equity loan or line's interest rate could be as low as 2 or 3%. I'm not sure what Disney's interest rates look like, but would guess it's north of 10%? Depending on the principal, it could save them $50-60+ a month, which may be worth it to them. If they go with a line, that can be kept open once paid off and may be able to be used for other things as well.

But I do agree if there are other financial hardships, it would not be a good idea to put the house on the line. And if other bills are late, they may not be approved for a home equity anyhow.
I can't imagine anyone in a situation where this would come up but there weren't other risks and effects. It's also very unusual that one can borrow their way out of such an issue. Interest rates are rarely the problem or enough of a different to fix the problem. IMO often the worst thing one can do in such situations is to try to save things that are not important or not savable and create more issues. IMO a HELOC always creates those issues and risks and that's a thousand fold when there are already financial stresses.
 
I can't imagine anyone in a situation where this would come up but there weren't other risks and effects. It's also very unusual that one can borrow their way out of such an issue. Interest rates are rarely the problem or enough of a different to fix the problem. IMO often the worst thing one can do in such situations is to try to save things that are not important or not savable and create more issues. IMO a HELOC always creates those issues and risks and that's a thousand fold when there are already financial stresses.

I understand what you're saying, but the OP hasn't given us enough information to understand their surrounding financial situation. It's possible OP has the foresight to see savings dwindling and wants to save some money some way. They may not be in dire straits just yet. If re-financing was a viable option to help them (which is what they originally asked about), then a HELOC could be too. Just putting all options on the table since we have limited info.
 
I understand what you're saying, but the OP hasn't given us enough information to understand their surrounding financial situation. It's possible OP has the foresight to see savings dwindling and wants to save some money some way. They may not be in dire straits just yet. If re-financing was a viable option to help them (which is what they originally asked about), then a HELOC could be too. Just putting all options on the table since we have limited info.
First I ALWAYS feel a HELOC for a timeshare is a bad idea no matter the interest rates variables. Second, if they've having enough issues that they aren't sure they can afford the DVC they own, it's basically by definition if one is asking the question there are other issues or at least potential issues. In this case when there is ANY question, a HELOC is a 1000% bad idea.
 
I would just let Disney have the points back or try to sell and cut your losses. The monthly loan plus annual fees can be quite a burden under certain circumstances. As noted, refinancing is not going to really make or break the situation. Even if you were able to save a $100 a month after a re-fi, if that's all that is between making and breaking yourself, you are probably better off without DVC. You will still need to get to Disney and pay for tickets and the other expenses on top of just the DVC component of the equation. Buy back in again later when you are better off financially.
 
I would agree that financing through Disney is a bad idea to begin with. Anyone giving you 12% or worse interest rates is taking you for a ride. It's barely better than a credit card. The best would be to go to the bank and see about a loan there - which would require some collateral likely. Either against your car or against your house. You should be able to improve on interest rates significantly this way.

I do think you have to look closely at the situation of "is it really worth it".

I did a rough calc - I have no idea what your loan or payment rate is - but just guessed at a rough number.

If you have a 10-year loan for $20,000 a year with Disney at 12 % interest - that'll cost you $288 a month.
If you can get something like a home equity loan or bank loan at 5 % interest - that'll cost you $212 a month.

So even in those two extremes, your savings one versus the other about $76 a month. Is that enough of a savings to really help you out? Or are you better off saying this DVC was the wrong choice at the time, and sell the points. Of course, as others pointed out, that could still leave you in a hole, but alternately would be to allow foreclosure.
 
First I ALWAYS feel a HELOC for a timeshare is a bad idea no matter the interest rates variables. Second, if they've having enough issues that they aren't sure they can afford the DVC they own, it's basically by definition if one is asking the question there are other issues or at least potential issues. In this case when there is ANY question, a HELOC is a 1000% bad idea.

Fair enough. At least the OP is aware of all options available to them at this point, good or bad :thumbsup2
 
I'd recommend the OP look to pull money out a car before using a HELOC. Refinanced auto loans can be had for between 1.5%-3%. I'd rather put a car at risk than the whole house.
 
















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