whats owed Disney

[minnime]

After reading these boards it seems that some sellers do not know what they owe on their DVC contract. They accept an offer that does not fully satisfy Disney's balance owed. How does that happen?

 

[vicki_c]

Because people are stupid?

It's all listed right on the website as to your loan balance, and also a notation to call for your final pay off amount (just like paying off your mortgage). But that difference between what you see and what they would say when you call should be very small, not enough to refuse a resale offer on that basis.

Also, depending on what is owed - not everyone is going to be able to sell their DVC resale for what they owe on a loan and may have to bring money to the table to close.

 

[Deb & Bill]

And then some of them forget they owe the realtor 10% of the sale price for commission.

 

[Missyrose]

One of the biggest problems is those who buy direct from Disney now are seeing an immediate drop in their contract's value by about 50 percent once they sign on the dotted line. So those who are financing at Disney's direct prices will have a very hard time selling without having to bring money to the table.

 

[bakenatj]

One of the biggest problems is those who buy direct from Disney now are seeing an immediate drop in their contract's value by about 50 percent once they sign on the dotted line. So those who are financing at Disney's direct prices will have a very hard time selling without having to bring money to the table.

If this is the case that people are selling shortly after they buy, then there are far to many people that buy who shouldn't be buying. People need to stop and take a look at the financial mess around the world. Look at Greece. A country that thought they could live to the hilt on credit and the country is on the verge of collapse.

Now if you can afford it, by all means it's your right, but I think to many contracts are foreclosed on shortly after they are purchased. I have no problem with people purchasing direct, I did it myself. Just make sure you can afford the purchase along with the expense that follows the purchase i.e. tickets, food, airline, and maintenance fees. That all adds up $$$$

 

[Missyrose]

If this is the case that people are selling shortly after they buy, then there are far to many people that buy who shouldn't be buying. People need to stop and take a look at the financial mess around the world. Look at Greece. A country that thought they could live to the hilt on credit and the country is on the verge of collapse.

Now if you can afford it, by all means it's your right, but I think to many contracts are foreclosed on shortly after they are purchased. I have no problem with people purchasing direct, I did it myself. Just make sure you can afford the purchase along with the expense that follows the purchase i.e. tickets, food, airline, and maintenance fees. That all adds up $$$$

But that's just the thing, the people on these DVC boards make up just a teeny-tiny sliver of the DVC-buying public. 98 percent of those sales are made strictly on impulse after sitting through one of the DVC presentations (where they do a very good job of tugging on their heart strings). Many people never think about the "total cost" of DVC (airfare, tickets, meals, etc.) before buying. And many, after a couple years of using their points, probably decided they cannot afford all the extras and would rather not be paying MFs on points they can't afford to use.

 

[ELMC]

But that's just the thing, the people on these DVC boards make up just a teeny-tiny sliver of the DVC-buying public. 98 percent of those sales are made strictly on impulse after sitting through one of the DVC presentations (where they do a very good job of tugging on their heart strings). Many people never think about the "total cost" of DVC (airfare, tickets, meals, etc.) before buying. And many, after a couple years of using their points, probably decided they cannot afford all the extras and would rather not be paying MFs on points they can't afford to use.

I would go one step further and say that a lot of people do not even focus on what they are paying for their contract. The salesperson sells them on a "monthly payment" and all of the focus is placed on that. You're not spending $16,000, you're paying $350 a month. People lose sight of the overall cost.

While we're at it, I have a big problem with referring to DVC monthly payments as a mortgage. A mortgage is for a house, buying DVC is prepaying for vacations. They are two very different things.

 

[ssawka]

While we're at it, I have a big problem with referring to DVC monthly payments as a mortgage. A mortgage is for a house, buying DVC is prepaying for vacations. They are two very different things.

But not in the eyes of the IRS. Whenever I've seen people refer to DVC as a mortgage, it is for tax purposes.

 

[dianeschlicht]

But not in the eyes of the IRS. Whenever I've seen people refer to DVC as a mortgage, it is for tax purposes.

Are you saying that DVC payments are tax deductible? I thought it was only home mortgages that held that status.

Frankly, I never saw any purpose to buying a timeshare you had to finance. If you have to finance it, maybe you shouldn't be buying it in the first place. It isn't an essential like a home or a car. Instead it's a luxury, and should be treat ed as such in how you purchase. Save your money and buy when you can pay cash.

 

[princessaloha]

Are you saying that DVC payments are tax deductible? I thought it was only home mortgages that held that status.

Frankly, I never saw any purpose to buying a timeshare you had to finance. If you have to finance it, maybe you shouldn't be buying it in the first place. It isn't an essential like a home or a car. Instead it's a luxury, and should be treat ed as such in how you purchase. Save your money and buy when you can pay cash.

Hi, I'm not a tax consultant or anything but am pretty sure NO mortgage is tax deductible (that would be awesome though!). It's the INTEREST on your mortgage loan that is tax deductible and usually property taxes and sometimes the points paid when you first get your loan.

Since DVC is a deeded real estate my understanding is that the INTEREST on the loan is tax deductible (if you get it financed). If you pay it outright with no loan then no interest is paid and nothing to write off. In the case of resale there are ways around this including but not limited to using a Home Equity Line of Credit which is associated with your current home and therefore the interest IS tax deductible.

 

[crisi]

Hi, I'm not a tax consultant or anything but am pretty sure NO mortgage is tax deductible (that would be awesome though!). It's the INTEREST on your mortgage loan that is tax deductible and usually property taxes and sometimes the points paid when you first get your loan.

Since DVC is a deeded real estate my understanding is that the INTEREST on the loan is tax deductible (if you get it financed). If you pay it outright with no loan then no interest is paid and nothing to write off. In the case of resale there are ways around this including but not limited to using a Home Equity Line of Credit which is associated with your current home and therefore the interest IS tax deductible.

Under most circumstances - but not all - the interest on a DVC loan is tax deductible as mortgage interest.

To the bigger question - not understanding what you owe - there are a lot of people who are financially illiterate, or who have marginal financial literacy. They don't understand that the difference between what you owe on something and what it is worth can create an issue for you. There are other people - perhaps some of the same people - who don't want to take responsibility. And, when banks are willing to short sale, why shouldn't Disney?

 

[ELMC]

But not in the eyes of the IRS. Whenever I've seen people refer to DVC as a mortgage, it is for tax purposes.

Perhaps. But I have seen a lot of people get caught up in the "welcome home" aspect of DVC and really talk like they are purchasing a second home when taking out a "mortgage" to finance their DVC purchase. I'm not judging, and I'm sure people get a lot of enjoyment and satisfaction out of their ownership whether purchased direct or resale, cash or financed. And many people on here have expressed that the value they get from ownership is worth any cost. Although I don't think the same way, I can respect their point of view. It does get sad, however, when you hear the stories of people who didn't really realize what they were committing to and a few years later are forced to sell AND write a big check to Disney to pay off the loan. Now that's not everyone who buys direct and finances, but it does happen.

All I'm saying is that the use of terminology makes me a little uncomfortable. It's like referring to DVC salespeople as "guides". The only thing they are there to guide you towards is the dotted line on the contract. Tell your guide that you have decided to buy resale and see how much guidance they provide.

In the end, I do think it's a great thing and I enjoy my ownership tremendously. I just think we should be careful about the words we use when discussing DVC or any timeshare for that matter.

 

[ELMC]

They don't understand that the difference between what you owe on something and what it is worth can create an issue for you.

If we haven't learned that through the recent housing crisis, will we ever?

 

[bakenatj]

If we haven't learned that through the recent housing crisis, will we ever?

Probably not. That entitlement mentality is world wide for the most part. The future doesn't look bright unless ways are changed drastically. Sad, especially for those of us with younger children. What do they have to look forward to???

 

[k3chantal]

Because people are stupid?

It's all listed right on the website as to your loan balance, and also a notation to call for your final pay off amount (just like paying off your mortgage). But that difference between what you see and what they would say when you call should be very small, not enough to refuse a resale offer on that basis.

Also, depending on what is owed - not everyone is going to be able to sell their DVC resale for what they owe on a loan and may have to bring money to the table to close.

Which is why it's not a good idea to finance this luxury item.........

 

[ssawka]

Which is why it's not a good idea to finance this luxury item.........

It depends. Sometimes the decision of whether to finance something is a question of liquidity rather than affordability. Also, sometimes financing can actually save you money. In our case, we financed our purchase of BLT points in 2009 when we bought it for $92 a point at 11%. We paid off the loan in one year. During that time, the price rose about 20%. Yes, it would have been better to have the money up front, but since that was an option, we saved money by financing over waiting until we had the cash. Anyone who has taken an undergraduate finance class will tell you, debt is not inherently bad and can actually be very good if used appropriately.

 

[ELMC]

It depends. Sometimes the decision of whether to finance something is a question of liquidity rather than affordability. Also, sometimes financing can actually save you money. In our case, we financed our purchase of BLT points in 2009 when we bought it for $92 a point at 11%. We paid off the loan in one year. During that time, the price rose about 20%. Yes, it would have been better to have the money up front, but since that was an option, we saved money by financing over waiting until we had the cash. Anyone who has taken an undergraduate finance class will tell you, debt is not inherently bad and can actually be very good if used appropriately.

I would like to agree that leveraging debt can be very beneficial. I think the general negative opinion of financing DVC refers to people who choose to finance the payments for the full ten years at the 11% or even 14% interest rate. And even then, it doesn't make them a bad person, but it can lead to so many problems that we have seen on here time after time.

 

[ssawka]

I would like to agree that leveraging debt can be very beneficial. I think the general negative opinion of financing DVC refers to people who choose to finance the payments for the full ten years at the 11% or even 14% interest rate. And even then, it doesn't make them a bad person, but it can lead to so many problems that we have seen on here time after time.

I agree with you that "it doesn't make them a bad person", but it does show either a lack of self-control or a lack of understanding. I agree that often the salesperson is trying to talk them into doing something they are not sure they want to do, however it is not the company's job to protect people from themselves. Again, I understand where you are coming from, but I just don't buy into the "never finance a luxury item" camp. If you are careful and know what you are doing, there is no problem with financing something you know you will be able to afford.

 

[bumbershoot]

...but I just don't buy into the "never finance a luxury item" camp.

Neither do I, and I'm nowhere near as good as you were about leveraging debt.

We just knew that *in the long run*, going by what we were already doing, even with financing, we would be paying LESS than what we were already paying for Disney accommodations. And we would be getting more. Worked for us. (and we took almost two years to think about it)

And when you're coming off of weird credit from one's clueless 20s, sometimes...11% interest isn't bad. It's all where you're coming from...



But to the OP, I have NO idea how one doesn't know what one owes. DVC makes it so easy to figure out! Wait, you don't even have to figure out, you just have to LOOK at the information online.

 

[jodifla]

It depends. Sometimes the decision of whether to finance something is a question of liquidity rather than affordability. Also, sometimes financing can actually save you money. In our case, we financed our purchase of BLT points in 2009 when we bought it for $92 a point at 11%. We paid off the loan in one year. During that time, the price rose about 20%. Yes, it would have been better to have the money up front, but since that was an option, we saved money by financing over waiting until we had the cash. Anyone who has taken an undergraduate finance class will tell you, debt is not inherently bad and can actually be very good if used appropriately.

I think I love you!!!!

It's so frustrating to me how people don't understand you can use debt to your advantage.