The "I financed DVC and am glad I did" club

[forloveofdisney]

We purchased our first resale contract in 2012 and financed through our credit union with a very low rate for a short term. We added on another contract earlier this year the same way. When it's all said and done, all these points (AKV good until 2057) will be paid off in five years total with low interest and the ease of payroll deduction. When we made the commitment we saw this basically as a car payment. We always have one car payment but had just paid one off and will not need to have another for awhile so this took that place in our budget. Now, everyone's finances are different so no one can judge what is responsible or irresponsible for someone else. Without going into my personal finances, I am very comfortable with my decision.

Bottom line to me is, my monthly payment to our credit union is the same as cash I could be putting back for a future purchase. The difference is, I already have the points and I am already enjoying vacations. If I didn't already buy and finance I would be saving for DVC and spending additional money on Disney vacations. To me, that didn't make sense.

Since we purchased in 2012 we have had two amazing family vacations and are looking forward to a quiet, parents only trip in November. This would not have been possible without our DVC points and the PAP special offer for DVC members. We will skip Disney next year but will do 2-3 trips the following year utilizing banking and borrowing. This will make a total of 5-6 week long (or more) vacations during the 5 years that our points were being financed.

So... I financed DVC and I am VERY glad I did. I did because it made sense for us and we are financially stable to make it work. My kids are only young once and these vacations have been priceless in my opinion.

 

[jodifla]

We purchased our first resale contract in 2012 and financed through our credit union with a very low rate for a short term. We added on another contract earlier this year the same way. When it's all said and done, all these points (AKV good until 2057) will be paid off in five years total with low interest and the ease of payroll deduction. When we made the commitment we saw this basically as a car payment. We always have one car payment but had just paid one off and will not need to have another for awhile so this took that place in our budget. Now, everyone's finances are different so no one can judge what is responsible or irresponsible for someone else. Without going into my personal finances, I am very comfortable with my decision. Bottom line to me is, my monthly payment to our credit union is the same as cash I could be putting back for a future purchase. The difference is, I already have the points and I am already enjoying vacations. If I didn't already buy and finance I would be saving for DVC and spending additional money on Disney vacations. To me, that didn't make sense. Since we purchased in 2012 we have had two amazing family vacations and are looking forward to a quiet, parents only trip in November. This would not have been possible without our DVC points and the PAP special offer for DVC members. We will skip Disney next year but will do 2-3 trips the following year utilizing banking and borrowing. This will make a total of 5-6 week long (or more) vacations during the 5 years that our points were being financed. So... I financed DVC and I am VERY glad I did. I did because it made sense for us and we are financially stable to make it work. My kids are only young once and these vacations have been priceless in my opinion.

Exactly. I really don't get these folks who make yearly trips spending more on on site accommodations than the principal and dues would be for DVC. We bought in after owning a house but before kids. This ended up being a wonderful move because even though one of us stayed home with our son, we could still easily afford Disney trips in style because our DVC was paid off.

 

[tjkraz]

For years I've been reading the "if you can't pay for a luxury purchase you shouldn't buy" comments--usually as a non-responsive response to a question about how or where to finance, not if to finance. Each time my stomach burns. I've learned to stop reading those threads. Us internet posters can be sooo sanctimonious!

...snip...

We really ought to stop sitting in judgement on each other. We all make mistakes and we all make wise decisions (even if not on purpose). Maybe I'm "just lucky," but I don't think so. I've had my fair share of busted furnaces, a/c compressors, long-term care needed by my dad, roof replacements, etc. I think I just figured it out, for me...and I don't think I can or should try to figure it out for anyone else.

In discussions like this there is a tendency to paint many people (and their contributions) with a single brush. But as always there are shades of gray.

I have contributed to these financing discussions in the past and I'm sure I will again. And I'm usually the one saying "don't forget about this...or this...."

But I am NOT the person saying "a timeshare should NEVER be financed." Like I said, I financed myself and I've also recommended that some posters finance over the years. But that shouldn't be confused with a sweeping endorsement.

Speaking solely for myself, my intent is to get people really thinking about the consequences of financing. If you sit through a DVC sales presentation, the Guide will have you convinced that anyone with an extra $250 in their budget and a love for the Disney parks is a fool for not buying. That enthusiasm deserves to be tempered with a little dose of reality.

Over the years we've seen some really bizarre situations (in my opinion) mentioned on the boards. One memorable post was from a 17/18 year old who wanted to use graduation money to buy into DVC. With mom and dad paying for college and few other financial obligations, it seemed like a logical for the poster to invest all of their savings and commit to a mortgage which would follow them throughout their 20s.

Here is what we know to be true:

- Every year more than a million Americans file for bankruptcy.
- Disney Vacation Club regularly forecloses on financed contracts which owners cannot continue to pay.
- When the recession was at its worst in '08-'09, contracts at the likes of AKV and SSR which people bought for $100-120 per point were suddenly reselling for $40-60 per point.

Financing really doesn't work out for everyone. Problem is those folks aren't reading a DVC discussion forum anymore.

Personally I'm still a little put-off by any blanket celebration of financing a $25k timeshare purchase. Sure it works for many people...but I hope the more borderline candidates will continue to take a realistic look at their finances before buying into the pixie dust.

 

[jodifla]

In discussions like this there is a tendency to paint many people (and their contributions) with a single brush. But as always there are shades of gray.

I have contributed to these financing discussions in the past and I'm sure I will again. And I'm usually the one saying "don't forget about this...or this...."

But I am NOT the person saying "a timeshare should NEVER be financed." Like I said, I financed myself and I've also recommended that some posters finance over the years. But that shouldn't be confused with a sweeping endorsement.

Speaking solely for myself, my intent is to get people really thinking about the consequences of financing. If you sit through a DVC sales presentation, the Guide will have you convinced that anyone with an extra $250 in their budget and a love for the Disney parks is a fool for not buying. That enthusiasm deserves to be tempered with a little dose of reality.

Over the years we've seen some really bizarre situations (in my opinion) mentioned on the boards. One memorable post was from a 17/18 year old who wanted to use graduation money to buy into DVC. With mom and dad paying for college and few other financial obligations, it seemed like a logical for the poster to invest all of their savings and commit to a mortgage which would follow them throughout their 20s.

Here is what we know to be true:

- Every year more than a million Americans file for bankruptcy.
- Disney Vacation Club regularly forecloses on financed contracts which owners cannot continue to pay.
- When the recession was at its worst in '08-'09, contracts at the likes of AKV and SSR which people bought for $100-120 per point were suddenly reselling for $40-60 per point.

Financing really doesn't work out for everyone. Problem is those folks aren't reading a DVC discussion forum anymore.

Personally I'm still a little put-off by any blanket celebration of financing a $25k timeshare purchase. Sure it works for many people...but I hope the more borderline candidates will continue to take a realistic look at their finances before buying into the pixie dust.

We were able to buy in at $10,000 --- because we didn't wait.

Yes, borderline candidates should be looking hard at what a commitment like this will do. But not everyone is a borderline candidate who needs a bunch of lecturing about the fact that sometimes the furnace breaks.

 

[mamilovesdisney]

I financed my DVC purchase. Like the rest of the country, I went thru some serious financial ups and downs over the last few years. Some bad decisions for sure of which financing DVC was not one of them!!!!!! Everyone has to make their own decisions but I have no doubt it was the best for my family! We adjusted our use of DVC more at Disneyland instead of Orlando but still created memories that otherwise would have been impossible. I share my membership with all of my family so the one time I was in trouble of loosing it, my brother helped me and guess who got to go on the next fab trip to Disneyland Nothing is for certain in life so do your best to make it count and for me that was financing DVC

 

[eliza61]

In discussions like this there is a tendency to paint many people (and their contributions) with a single brush. But as always there are shades of gray.

I have contributed to these financing discussions in the past and I'm sure I will again. And I'm usually the one saying "don't forget about this...or this...."

But I am NOT the person saying "a timeshare should NEVER be financed." Like I said, I financed myself and I've also recommended that some posters finance over the years. But that shouldn't be confused with a sweeping endorsement.

Speaking solely for myself, my intent is to get people really thinking about the consequences of financing. If you sit through a DVC sales presentation, the Guide will have you convinced that anyone with an extra $250 in their budget and a love for the Disney parks is a fool for not buying. That enthusiasm deserves to be tempered with a little dose of reality.

Over the years we've seen some really bizarre situations (in my opinion) mentioned on the boards. One memorable post was from a 17/18 year old who wanted to use graduation money to buy into DVC. With mom and dad paying for college and few other financial obligations, it seemed like a logical for the poster to invest all of their savings and commit to a mortgage which would follow them throughout their 20s.

Here is what we know to be true:

- Every year more than a million Americans file for bankruptcy.
- Disney Vacation Club regularly forecloses on financed contracts which owners cannot continue to pay.
- When the recession was at its worst in '08-'09, contracts at the likes of AKV and SSR which people bought for $100-120 per point were suddenly reselling for $40-60 per point.

Financing really doesn't work out for everyone. Problem is those folks aren't reading a DVC discussion forum anymore.

Personally I'm still a little put-off by any blanket celebration of financing a $25k timeshare purchase. Sure it works for many people...but I hope the more borderline candidates will continue to take a realistic look at their finances before buying into the pixie dust.

But I think that's the thing that we find so off putting. The assumption that financing equals "borderline ". Like my mortgage, I sold my old house which was paid off and purchased a new house with a mortgage, with my investments growing as they are and with loan rates as cheap as they are, no way would I take tens of thousand of dollars out for anything.
So if I buy into the poly and I can charge the points at 2, 3, 4 percent, I'll leave the money where it is.

It's not really a celebration of debt, it's more of us saying, we gave this serious thought (not just buying into pixie dust) and made decisions based on those discussions.


Now the thing is, just about everybody and their mama was effected by the recession, and truthfully who knows what will happen next year, maybe the economy will collapse again maybe it will grow?

 

[tjkraz]

But I think that's the thing that we find so off putting. The assumption that financing equals "borderline ".

Thing is, *I* didn't make that inference....you did. Nothing about my post suggests that every person financing is "borderline."

At one time DVC reported as much as 75% of all sales were financed. Do you really think that those thousands of buyers--paying interest rates as high as 17.5%--are in the same financial condition as yourself? Of course not.

Nothing wrong with playing a little devil's advocate. Don't take it personally. Not every thought-provoking comment is intended as a blanket condemnation of financing.

 

[AutumneB]

I appreciate this thread being out there---I recently put in an offer through a reseller and am patiently (ok, not really) waiting for Disney to approve the offer. I will finance about half of the purchase price and struggled with that decision as I've always been one to save and scrimp until I could pay off something.

However, after recently having a major life change, I'm learning to live in the moment more. I'm still planning on paying off way early, but the financing gives me a little 'wiggle room' in case situations arise.

 

[lawboy2001]

We withstood the immense pressure from family and friends for about 5 years; they really really really wanted us to do what they were doing, and get a mortgage. We were told it was soooo easy to get a mortgage, we sholdn't worry, just get one! They got one, we should get one! Owning a home was sooo much better.

sidenote: as a renter, no one suddenly wants us to buy a furnace. It's lovely, renting from a terrific landlady. I have never had to buy an appliance. One breaks, it gets fixed or replaced in days. Awesome.

Anyway, the peer pressure was immense. Instead, we continued happily renting and we financed DVC.

And then the bottom fell out. From our friends and family. But not us. And because we financed and then had a crisis post-rescission-period, we smartened up in other ways and are stronger than we might ever have been. MIL/FIL/BIL/his partner lost their house (Long Beach CU held the mortgage, it was $10K owed and SIX MONTHS from first payment missed to auction of the house, back in '05), dad nearly lost his (augh) second house (that he never should have bought), a friend freaked for months about her balloon payment, etc etc etc.... Meanwhile, we continued along in our rental condo with our awesome landlady. Taking DVC vacations.

So...which one was the big scary risk?
.

Oh I can relate to this. I earn a high income but....rent!! People can't believe I don't take out a huge mortgage on an overpriced house.

I love how people with hundreds of thousands of dollars of debt tut tut those of us with maybe 10k in timeshare debt. Isn't taking a Disney vacation more enjoyable than taking responsibility for a money pit!??

 

[DeeCee735]

Just my two cents here.....because we sort of fall in the middle of the cash/finance situation.

We bought in 2000, started with a 185 point contract and paid cash. Then we added on 5 times! Some were paid for with cash, others financed and paid off within a couple of years.

Bottom line, and I don't mean this in a nasty way...just sayin

Everyone has their own opinions and rules as to how they spend their money on what and when. For us, it's no one else's business how we pay for our lifestyle, or what our financial status is. This is all very personal stuff.
We wanted DVC, we bought it. We wanted to add on (5 times!!!), we added on. It was our decision, for our life and our family. All the opinions here on these boards and of those close to us, didn't matter, shouldn't matter and still don't matter.

Until someone lives in someone else's shoes, how can anyone say what's the right way for anyone else?

Live, love, laugh and enjoy your DVC!!!!

 

[DVC-Don]

Our first contract back in 2000 was financed through DVD, but only until we paid it off with a home equity line of credit in a few months. The HELoC was paid off within 3 years.

 

[Andrew015]

"We withstood the immense pressure from family and friends for about 5 years; they really really really wanted us to do what they were doing, and get a mortgage. We were told it was soooo easy to get a mortgage, we sholdn't worry, just get one! They got one, we should get one! Owning a home was sooo much better."

That was the problem prior to the bubble. Banks were lending to anyone, whether qualified or not. "No money down? No problem!" People were being put in houses that they had no business being put in, and when the bubble burst, they were the ones who got burnt. Those who lived within their means, by and large, made out just fine.

"sidenote: as a renter, no one suddenly wants us to buy a furnace. It's lovely, renting from a terrific landlady. I have never had to buy an appliance. One breaks, it gets fixed or replaced in days. Awesome."

You do realize that this little luxury of renting is factored into your inflated rental payment, correct? Your landlord isn't doing this out of the goodness of her heart...

Anyway, the peer pressure was immense. Instead, we continued happily renting and we financed DVC. And then the bottom fell out. From our friends and family. But not us. And because we financed and then had a crisis post-rescission-period, we smartened up in other ways and are stronger than we might ever have been. MIL/FIL/BIL/his partner lost their house (Long Beach CU held the mortgage, it was $10K owed and SIX MONTHS from first payment missed to auction of the house, back in '05), dad nearly lost his (augh) second house (that he never should have bought), a friend freaked for months about her balloon payment, etc etc etc.... Meanwhile, we continued along in our rental condo with our awesome landlady. Taking DVC vacations.

So...which one was the big scary risk?"

I'm not 100% sure that I'm taking your post the way that you intended it, but your post comes off as a blanket assertion that "Anyone who has a mortgage is an idiot and would be far better off as renters". You do realize that all of the examples provided within your post, from over-inflated pre-bubble California real estate, to a second house that your father couldn't afford and never should have bought, to balloon payments, etc. etc., are NOT normal situations for most homeowners, right? Again, these practices were welcomed by the banks pre-recession, and ultimately led to the bubble bursting. The pendulum has now swung the opposite direction, and people are now, by and large, required to put significant down-payment equity when buying a house. Prices for homes are significantly cheaper, too, and your money today goes much further than it did a few short years ago, all of which significantly reduces the "risk" associated with purchasing a home.

I'll give you an example that illustrates the contrary to your argument. After graduating college, I watched most of my peers rush out and get apartments. The thought of moving home with their parents after graduating college never crossed their minds. I bucked the trend and moved home with family for a few years and saved every dime that I made with the intention of buying a house. I watched the housing market hit rock bottom, picked out a beautiful house in a wonderful suburb, on which I laid out a 40% down payment. My fixed interest rate is ~3%, and as a result, my mortgage payment for my beautiful house is less than what my friends are paying for their tiny, 1-2 bedroom apartments that they'll never own or get a dime back out of. When they found out that my mortgage payment was, all of my friends were in disbelief. In their eyes, they've all made terrible mistakes by taking the rental path in what happens to be one of the best "buyer's markets" in recent decades.

Tying this back to the original topic at hand, I find it funny that some are willing to finance a timeshare purchase, a depreciating asset that will ultimately be worth nothing in 30-40 years (yes, I know that DVC "holds its value well".... for now). But it is still a depreciating asset on the balance sheet. Yet the thought of financing a home - that in 30 or 40 years, will be worth significantly more than what you paid for it today - is a fate worse than death.

I want to make this perfectly clear - I am not begrudging anyone for their decision to rent vs mortgage a house, nor finance vs paying cash for DVC. Everyone has different situations that ultimately guide them down specific paths. One of my friends who is envious of my current situation never had the ability to move home and save money for a house, as he came from a very toxic home life. He took the only path that was available to him at the time, and he's making the very best of the path he is on.

Some of us make big sacrifices to save for the long haul. Others splurge along the way and would rather pay a little more in the long run in order to enjoy the fruits of their labor on the front-end. All of these choices come with varying levels of both risk and cost. What is right for me may feel very off-putting to you, and visa versa. Please don't write off my decisions to buy my house and pay cash for DVC as being "stupid" just because they conflict with your financial belief system.