$$$ Taking the plunge, but...

[parrothead724]

...holding my nose! Well, at least a little...

Just took the BCV tour, went home w/hubby, tossed and turned a few nights, and made the call yesterday! Now comes the hard(er) part - $$$. I know most of you will say this is a moot point because I dont "intend" to keep Disney's financing for the length of the contract, but I was wondering if, with 20% down, any recent purchasers got a better deal than 9.75 %??? I certainly don't have the means to go 50% down... but if it made a difference, I could go somewhere between the two...

How cumbersome is their financing paperwork? If you've a decent beacon score, can you get a better rate from Disney?

Thanks for your thoughts on this... I gotta do something between now and the time the tax refund hits!!

 

[tjkraz]

You won't get a better rate on the 10 year financing. Most aspects of the purchase through DVC are not negotiable.

DVC finances the actual purchase themselves, so they are pretty lenient with approvals. I think I've read one second-hand report of an individual being declined, and that was due to a slew of bankruptcies.

And, if you do default on payments, the points revert right back to DVC who can turn around and sell them again. While I'm sure there is a great deal of up-front cost to DVC involved in selling a single contract, the overall level of risk for them is low.

 

[bongo59]

the best way to do it is to use a home equity loan to do it.....and if for some reason the bank wont let you do this.......some wont......then put it on a credit card then tell the bank you want to make the homeequity loan to pay off the credit card......and you will create a schedule A tax deduction for yourself and get your purchase......when we bought 10 yrs ago we used disney and then paid it off in 6 months............

 

[floridafam]

May I ask how many points you are buying?

You could do the home equity loan as some have suggested. It's not right for everyone.

50% down will give you a 4.95% interest rate and you will also have to pay off the contract in one year. If you do 50% down and finance for 10 yrs you still only get the 9.75% rate.

Good luck with your decision.

 

[parrothead365]

bump

 

[BJK]

we just bougth into dvc this past year on the resale market....one contract for 300 points at BWV from dvc-resales.com and another 150 at BWV from atimeshare.com....

for both, we simply used a home equity line of credit...the interest rate that most banks are offering right now on that type of credit line is half of what disney charges....

i'm not sure if a home equity line of credit is exactly the same as a home equity loan....
we didn't actually borrow all the money available to us on the credit line, just what we needed to buy our points....

the bank never asked us what we were using the money for....in the current economy, especially with where the interest rates are now....i think they're all dying to lend people money....

i think it''s a no brainer to do it this way....

 

[tjkraz]

Originally posted by BJK
i think it''s a no brainer to do it this way....

Well, I think that's a bit extreme.

Any home equity loan / line of credit is backed by the equity in your home. If you default on that loan, the bank can (and will) step in and take your house.

Many people are comfortable enough with their financial situation to take that chance, but calling it a "no brainer" is a bit extreme. To some people, putting your house on the line for a prepaid vacation is the real "no brainer" (as in, if you choose to take that risk, you have no brain).

Purchasing a DVC resale does have a bit less risk than other situations simply because you could always sell off the points to repay the loan--less any loss you take on the sale, broker commission and/or other fees. But a fair amount of time will also lapse while you locate a buyer, wait for DVC to decide on ROFR, and close on the transfer.

 

[BJK]

obviously i hear what you're saying....

but i'm naturally going on the assumption that anyone that is going to be buying a timeshare vacation plan is a person whose financial situation is stable enough that they aren't about to defualt on mortgage payments any time soon !!

if someone is in that dire a financial situation and is still buying into DVC, then they are indeed too far gone ofr any bit of advice to help...

but more practically.....it seems to me the issue here is a simple argument of interest rates....
if you're buying into DVC, i'm taking for granted that you can afford to make your payments.....and home equity loans carry half the interest rate you'll get from disney....you'll potentially save thousands of dollars in interest doing it this way....

how could anyone describe that as anything BUT a no-brainer??

 

[tjkraz]

Originally posted by BJK
but i'm naturally going on the assumption that anyone that is going to be buying a timeshare vacation plan is a person whose financial situation is stable enough that they aren't about to defualt on mortgage payments any time soon !!

And my response would be that anyone who needs to borrow against the equity in their home in order to buy a timeshare is not necessarily in a position to seamlessly weather an unexpected job loss or other financial hardship.

Back to the point, four months ago we purchased SSR and financed through DVC. By doing so, we obtained interest free financing until June 1, 2004. Our intention is to pay-off the financed amount as soon as possible after 6/1. If we had used a home equity line to pay for the purchase, we would have accrued interest for over 8 months, which the DVC financing has enabled us to avoid.

 

[BJK]

the original question posed never mentioned an interestb free financing option....so i had no idea disney even offered that....
the original question basically was, if anyone thought there was a way to do better than 9.75, and clearly there is....through any bank, you will get half that rate of interest...

anyone who needs to borrow against the equity in their home in order to buy a timeshare is not necessarily in a position to seamlessly weather an unexpected job loss or other financial hardship.

you say this as if anyone that borrows money using their home as collateral is doing so as a last resort or out of some sense of desperation....

people do it all the time for any number of reasons.....to buy a car, do a home improvement project....my parents just paid for my sister's wedding using a home equity credit line....

it's a common tool used by many that don't have briefcase full of money laying around and want the lowest possible interest rate for the purposes of paying the money back....

and right now, banks are offering a lot lower rate that 9.75....

now, if interest free is an option and someone can pay off the balance before the interest kicks in, then more power to them...that is ultimate no brainer.....

 

[poohj80]

Originally posted by tjkraz
Back to the point, four months ago we purchased SSR and financed through DVC. By doing so, we obtained interest free financing until June 1, 2004. If we had used a home equity line to pay for the purchase, we would have accrued interest for over 8 months, which the DVC financing has enabled us to avoid.

Or you could do like us and get the best of both worlds - finance through DVC to get the no interest until June 1 and then use home equity line of credit to pay the balance in full in May before the interest kicks in.