Webcast mathematics

[pinnocchiosdad]

Maybe I am wrong but my guide just EMAILED me the incentive (webcast promo) for BLT, it looks like the financing structure has changed o make purchases more affordable. In the past the incentive was taken off your down payment. You had less out of pocket expense but a higher principle to pay over 10 years (interest in Mickeys pockets). I just looked at the payment breakdown on the webcast deal and they are taking the incentive straight off the purchase price which means you loan is less. If I am right this makes the seemingly lousy incentive look more attractive in interest saved over the course of time.

 

[ACDSNY]

The down payment has been 10% of the full amount before the incentive discount for quite some time.

 

[whitfamily]

Yeah its the same deal we signed in May. Back in Jan they were taking it off the down payment and the principle.

 

[Crystal_27]

We bought in March/April, 2009 when the incentives changed over from applying the incentive as part of your down payment (ended up being a lesser per point incentive) to having to pay the full 10% down but getting a higher per point incentive. My understanding from our Guide was that there was some legal issue with having the incentive put against the downpayment so that's why the change was made. It sounds as if that structure is still in place now. That said, I would imagine that it would be more attractive to potential buyers to have the first structure, whereby they could buy into DVC for less down. Still, we were putting more than 10% down when we bought in, so the higher incentive was a better option for us. I guess if people want DVC badly enough they will find a way.

 

[pinnocchiosdad]

Yeah its the same deal we signed in May. Back in Jan they were taking it off the down payment and the principle.

I purchased last week but waited to sign my contract until after viewing the Holiday Webcast. I got a beter deal on the Webcast offer. My guide sent me the new offering on BLt and the financing was different. My original contract took the incentive off my required down payment. The contract for the webcast shows the incentive being taken off the outstanding loan principle which amounts to extra savings over the years.

 

[pinnocchiosdad]

The down payment has been 10% of the full amount before the incentive discount for quite some time.

The incentive was off the deposit, not the principle. I have a new contract sitting in front of me.

 

[lark]

I purchased last week but waited to sign my contract until after viewing the Holiday Webcast. I got a beter deal on the Webcast offer. My guide sent me the new offering on BLt and the financing was different. My original contract took the incentive off my required down payment. The contract for the webcast shows the incentive being taken off the outstanding loan principle which amounts to extra savings over the years.

You are always at liberty to prepay as much as you want or voluntarily add money to your downpayment. I really don't understand how this is a "better deal." Every dollar you put in early saves you money in the long run in interest, whether disney calls it a "downpayment" or you simply write a check to prepay.

I've never heard of a DVC contract in the last few years where the incentive comes off the downpayment. In fact, I'm not even sure how it's possible, since the incentive is actually much higher than the minimum downpayment. (For example, assume a 160 point contract at a $112 resort with an $18 incentive. For that contract if you really "took the incentive off your required downpayment," you'd be taking $2880 off of your downpayment, which would only be $1760, so are you saying that disney was actually going to pay you $1120 to buy their timeshare???)

But, anyway, even assuming that the incentive was coming off your downpayment and reducing it by, for argument's sake, $1,000, why not just voluntarily add an extra $1,000 to your downpayment or prepay it? (Actually, by prepaying it, you will ultimately save even more in the long run. Your loan doesn't reamortize, so your monthly payment will be a slightly higher than if you included it in your downpayment, but each monthly payment would actually have more principal in it, so it would compound over time.)