The 9.75 interest rate is only for 20% down? HELP

[floridafam]

BIL and SIL need an answer quickly, if possible.

Bought in and just received the paperwork.

Were told that the interest rate is 9.75% and that they had to put 10% down.

Received their paperwork. DVC shows the down payment as 20%.

They called and said they were going to put down 10% as originally discussed.

Guide said ok but now the interest rate goes up a percentage point.

Is this accurate?

 

[Jamieb]

I was told that it would 9.75% if I put 10% down and used MB on a 150 point purchase when I talked with my guide a couple of weeks ago. The 10% is before MB is applied. If your not using MB then the downpayment required is 20%.

Also note, the 9.75% is also only if you do direct withdrawal, if you want a paper statement each month then it goes up a point as well.

 

[floridafam]

Thanks for your info jamieb


Anyone have any more information?

 

[DeeP]

Can they get a home equity loan? The interest rate is much lower, 4.99% at many banks, which is a BIG savings over 9.75% or higher.

 

[jel0511]

I'm guessing the guide assumed your BIL and SIL were going to be using MB. If they do, then they only need to provide 10% cash to get to the 20% equity required for the lowest interest rate. If they aren't planning on using MB and only want to provide 10% downpayment, then yes the interest rate will go up by 1%. If they also want a monthly coupon type payment, not automatic bank draft, that also costs 1% more. I'd also recommend a home equity loan if that is available to them. MUCH lower interest costs over the life.

 

[floridafam]

Thanks for all of the info.

Everything is clear now.