What will it take to get in?

[mwiese]

Hey everyone, thanks for all the individual efforts of fellow Disney Lovers to inform everyone about the DVC.

I've had the itch to learn more for a few years now (but had to let my budget consciousness prevail).

My wife and I came close to buying in last year... but it was a big year for us (got married at Disney... so that explains the reason for not paying out any more $$ to Mickey and Friends

Anyway, I have two questions. Thanks in advance for any answers

1: What is the current deal going on at Disney? My wife and I are planning to spend our first anniversary at Disney this May. I am curious to what it would cost to get in (financing/down payment, etc) when we are there on vacation. What deals or incentives do they offer. I thought I recalled an old program where they worked something out where they credited you with the $$ you just put out for your current vacation, if of course you agree to sign up while you're there.

2: What resorts can you currently buy into? Is the Beach Club available yet? From what I've read it sounds like everything is sold out.. even VWL according to someones post of an O-town newsletter.

 

[RickW]

I can answer some:

Currenty only Beach Club is available for new purchases (at WDW - I think Hilton Head and Vero Beach are still available as well). The Beach Club Villas started selling about a month ago. The current deal is that the points cost $75 each, but you can get a $5/point rebate, or free nights in WDW Hotels (the more points you buy, the more nights you get).

The minimum purchase is 150 points. I think that the Down Payment is 20%, and you can apply your $5/point rebate to your down payment. I don't know any other detail of financing.

The deal where you could apply part of your stay to your purchase ended a few years ago. More recently they had a deal where you could sell your first year's points back to them for around $10 a point, but this is not an option for a BCV purchase.

Buying a resale is also an option, but financing a resale can be a challenge.

 

[RumpleMom]

I believe the cost per point is going from $75 to $80 in early June.

 

[DaveH]

When we bought last May, the incentive was you could sell back the first year's points for $5 each. We bought 150 points. We put $500 down and sold the first year points. We bought at VWL, that was all Disney was selling at WDW. We have the dues taken out of our checkingg account as well as our 10 year mortgage. That put our monthly payment in the area of $200. I do not remember thier minimum downpayment was for financeing through Disney. I hope this helps.

 

[kem330]

BCV is only resort currently available from Disney
Price is $75/point until June 1 then $80/point
Minimum buy in 150 points
Incentive: $5 off per point credited towards down payment
OR 5 night stay in deluxe resort to be used by early July 2003
(subject to availability) Minimum down 20% (have heard of as low as 10 on this board) That = $2250 down less $750 =$1500 down. Check about financing it's around 10.95%.Annual dues are $3.77/point. If you are serious about purchasing, it may be better to buy now and use the free hotel stay since you are coming in May. Use $ for hotel stay for down payment. You should also consider a resale if your are interested in a different property. You would have to find your own financing, but you might save a few dollars on purchase

 

[BedKnobbery2]

Can anyone tell me what the monthly payment would be for the above scenario (150 points)? Not sure how they work that.

 

[kem330]

It depends how long you finance it. If you go to one of the financial sites on the web you can use their mortgage/loan calculater and type in $9,000 at 10.95 for # of years.

 

[crisi]

Lots of resales come with points ready to use. You'll probably be able to find a resale for less than $65 a point with points on it, plus you'd pay closing costs (and have to find your own financing, if you need to do that). But the deal will take around a month - and May is coming pretty fast.

 

[JeffreyH]

150 points purchased by June 1 would be $75 each. You can put 20% down to get the 10.95% tax-deductible loan through Disney.

You could also get $750 through the $5/point "incentive" which is currently available, although there appears to be no guarantee that it will be in effect through May. This incentive can be applied towards your downpayment.

So...you'd have to put $1,500 down, and you could finance $9,000 at 10.95% for 10 years. That would lead to a monthly loan payment of $123.73. Also, you would have to pay about $47/month in maintenance fees. The total would therefore be about $170/month...subject to increases in the maintenance fee part.

In the first year you would pay about $960 in interest and about $120 in property taxes (part of the maintenance fee, also deductible)...so if you are in the 27% marginal tax bracket and you itemize your taxes you could save about $290 in federal taxes (about $24/month). I'm not sure if Maine has a state income tax...but you could save a little there too.

So...your after-tax cost would be about $145/month after putting $1,500 down.

Hope this helps.

 

[crisi]

Interest may not be tax deductible. There are a whole lot of rules regarding vacation home deductibity.

 

[Starshine]

We just purchased BCV, and we only had to put 10% down (we had the choice of 10% or 20%). We bought 150 points, took the $5 per point rebate which was $750. Used the $750 towards the downpayment, and added $500 out of pocket.

Our mortgage payment for 10 years is about $144, and then dues will be about $47 per month. So all told, we're at a little less than $200 a month.

Congrats on the wedding by the way! We spent our honeymoon last October at Disney (and caught the DVC bug then too!)

 

[dotterson]

Hi,

You only need to buy 100 points at the Beach Club. We got $500 back. I just got off the phone and made a 2-day reservation with the points at the Beach Club (which opens early - in July) and will add on with my HH points next month. I'm

You do get a tax benefit for your vacation home. It's not a lot, but it's something. It's called, I think, a second mortgage deduction...

All the dues and our financed HH purchase are automatically deducted from our checking account.

We now have 350 points!!! Man, I hope that's enough! We started with 200, added 50 last year and now 100 this year!!!

d

 

[JeffreyH]

Dotterson mentions only have to buy 100 points at BCV. While you can buy that many as an add-on, mwiese isn't yet a DVC member. Their minimum purchase would be 150 points.

Starshine: Were you able to get the 10.95% loan rate with just 10% down?

 

[crisi]

It is called a second mortgage deduction but ...

Please, please, please do not tell people they do get a tax deduction. They MAY get a tax deduction. There are a couple of gotchas to it and not everyone is going to qualify. For instance, I wouldn't.

Everyone should consult a tax attorney or tax accountant (or read the rules themselves) before they take the deduction.

http://www.irs.gov/formspubs/display/0,,i1=50&genericId=12831,00.html

There are a couple other IRS publications that go into the deductibility of home mortage interest.

Tax penalties are expensive.

(I am not a lawyer or an accountant).

 

[BuzzandWoody]

You might also try figuring what the payments would be for 7 years. That's what we did. The payments are a little higher but interest is less in the long run.

 

[dotterson]

Yes, it's true, I had a 100 point add-on.

I imagine different states have rules on tax deductions...

Think of it this way... I had a CD due. The best I could get for interest was 3.5%. Disney was charging, what? 10 or 11% to finance. I cashed the CD! (Do I show my age when I say I remember CDs at 10%???)

Well, at least I'll have something for my investment! (We still have 5 years on the HH...)

d

 

[kem330]

Just keep in mind your real cost when you finance over 10 years. That 10 year 10% contract is costing $7280 in finance costs, effectively bringing your cost per point to $118/point.

 

[JeffreyH]

Most people are financing because they don't have the money to pay "up front". So whether to finance or not isn't an option. It's do I finance or not buy.

But if you did have all of the money now, there is an opportunity cost of paying upfront. You don't have that money available to invest elsewhere and earn a return. So by giving up $70 today you are giving up more than $70 over 10 years.

Say you had the money to pay in full for 150 points ($10,500 after incentive). If you still financed $9,000 of the purchase, you'd have that money available to invest. And if you earned 10.95% on your investment and withdraw from this investment the $124/month to make the loan payment , you would wind up EXACTLY equal after 10 years, whether you finance or not (ignoring taxes...if you can deduct the interest on your loan then you only need to earn 10.95% before taxes).

True, you're unlikely to find an investment which gives you a 10.95% annual return each and every month. But the after-tax cost of a DVC loan (ASSUMING you can deduct, Cirsi ) is probably around 7.6%. That is do-able from an investment standpoint.

How about this figure....if you invested the $10,500 at 8% instead of buying DVC with no loan, you'd have $23,306 after 10 years. So your cost of buying up front is over $155 per point. But no fun vacations!!!

My only point is that you're not $48 per point "ahead" because you paid up-front. Someone who bought in 1992 probably would have been better off financing and investing their money in the stock market.

 

[kem330]

Here's another way to look at it: Beach club room, one week premier season: $400 x 7 = $2800 + 308 (tax) = $3108
One week DVC 181 points x 5.57/point (my cost 1 year finance)= $1008.17. The $2100/year saving more than makes up for my "lost" interest on the money used to purchase, not to mention the inflation rate of the hotel room. We go every year at this time and would not be investing the money, so yes we are saving money this way. Best payout I've been able to get this year on my money is 5.75%. To put this in the 10 year finance perspective- You do still come out ahead IF you go anyway and if you stay in a deluxe- 181 points x 6.72/point (cost of points w/10 year finance)= $1216.32 (a $1900 savings) However if you go and stay at Allstars, you are not better off. This is all funny math and doesn't take in variables but is a simplistic way for me to justify DVC

 

[Starshine]

Jeffrey, I'm at work and I don't have my papers here, but I'm almost certain that the interest rate for 10% down was a percentage point higher (11.95%).

Not the best rate in the world, but we went for the convenience factor. If we re-finance our home equity loan in the next few years, we'll probably pay it off, but I didn't want to go through the hassle of refinancing it right now.