Who is the best for financing a DVC resale?

[kwazibear]

I am interested in purchasing a DVC resale and wanted to know who is the best company to go through? I have perfect credit and can probably put down like 20% and would like to have it paid off in about five years. Any recomendations from previous experience good or bad is appreciated.

 

[MountainMouse]

If you own a house, then you are probably the best finance company. Consider a home equity loan if you're going the loan path. Also, before you take out a loan consider the extra cost of financing into your DVC purchase and see if that still makes financial sense over renting points or some other option. If it does then great and if not DVC will be here in 5 years after you've saved up to purchase (and if it's not then you'll be really happy you didn't buy).

 

[ontheuptick]

I didn't want to reply and be "that guy" in this thread - but the real answer is NO financing company is smart for DVC. If you don't have the cash, don't buy it. End of story. Set aside that money each month instead of making a payment, and then pay cash for the contract in 5 years.

 

[Deb & Bill]

I didn't want to reply and be "that guy" in this thread - but the real answer is NO financing company is smart for DVC. If you don't have the cash, don't buy it. End of story. Set aside that money each month instead of making a payment, and then pay cash for the contract in 5 years.

You are only "that guy" if we make you buy churros for everyone.

 

[keysersoze981]

Don't finance a DVC membership. it defeats the whole purpose of buying once. You're going to pay a finance company interest to try and save money staying at Disney? That sounds like a recipe for disaster.

 

[davedmaine]

Don't finance a DVC membership. it defeats the whole purpose of buying once. You're going to pay a finance company interest to try and save money staying at Disney? That sounds like a recipe for disaster.

Amen

 

[disBOBney]

To the contrary, if you intend on visiting Disney resorts more than twice during the time you would be financing, then it is better to buy and finance than not. If you are going to finance, home equity for most people would be most economical, otherwise those who have very favorable credit cards have financed that way, taken a personal loan with their bank, or used morena (aprox 11-14%). If you will be visiting and staying at a Disney resort or hotel regardless if you own DVC or not then start your ownership and let the DVC savings help pay for the the mortgage and ownership costs. Waiting to buy until you have saved enough to pay cash only makes sense if you will discipline yourself and family to not take any vacations until you have saved the amount which will of course be greater than what you would need to buy today.

 

[ontheuptick]

To the contrary, if you intend on visiting Disney resorts more than twice during the time you would be financing, then it is better to buy and finance than not. If you are going to finance, home equity for most people would be most economical, otherwise those who have very favorable credit cards have financed that way, taken a personal loan with their bank, or used morena (aprox 11-14%). If you will be visiting and staying at a Disney resort or hotel regardless if you own DVC or not then start your ownership and let the DVC savings help pay for the the mortgage and ownership costs. Waiting to buy until you have saved enough to pay cash only makes sense if you will discipline yourself and family to not take any vacations until you have saved the amount which will of course be greater than what you would need to buy today.

Good lord, I hope you don't really believe all that. Anyone who doesn't laugh at the stupidity of putting DVC on credit cards (as a loan) or using a lender that is charging you an 11-14% interest rate is beyond help.

DVC is a marginal financial decision anyway. Paying 7% (or 11-14%!!) makes it completely ludicrous.

You will be a much happier person if you save and pay cash. Or, don't do it at all and rent points or stay where you can afford.

 

[disBOBney]

Good lord, I hope you don't really believe all that. Anyone who doesn't laugh at the stupidity of putting DVC on credit cards (as a loan) or using a lender that is charging you an 11-14% interest rate is beyond help.

DVC is a marginal financial decision anyway. Paying 7% (or 11-14%!!) makes it completely ludicrous.

You will be a much happier person if you save and pay cash. Or, don't do it at all and rent points or stay where you can afford.

Well many people have called me many things, ludicrous, I'm ok with.
Lets say, a person wants to buy 160 AK pts from timeshare store adds in the closing costs pays down a 20% and finances the remaining 80% at 12% (DVC's rate)
for 5 years (op's parameter) all said and paid for at full maturity he will have paid $2.29 per use point. If instead a person bought VGF @ current price and paid cash, the per use point cost is $3.30. Now we know that Disney sells these all day long every day and finances over 60% of the them.

I think we can all agree that vacations are always an expense item, which means that those who go on vacation value the vacation higher than the money they are spending. Does a person who finances pay more for the same vacation as someone who doesn't, they certainly do, and they already know that, no one needs to call them names. They made a choice that works for them. OP did not ask if any of us thought financing was a good idea, he already made that decision, he asked where to finance.

BTW I have bought a few contracts, all of them direct, all of them financed via Disney, all paid off extremely early, and sold one for a profit. You may think me ludicrous, and thats ok, your welcome to your opinion. And I am happy with my decisions.

A 10 day one room stay at AKL mid Feb 2015 through priceline is $2960 cash.
a 10 day SV studio on DVC points at the financed point rate plus years dues is $1374.40 or a single years savings of $1,585.60 not including tax. That is just one year. And you think it is more wise to spend that extra amount each year? To each their own.

 

[dsnydaddy]

Well many people have called me many things, ludicrous, I'm ok with.
Lets say, a person wants to buy 160 AK pts from timeshare store adds in the closing costs pays down a 20% and finances the remaining 80% at 12% (DVC's rate)
for 5 years (op's parameter) all said and paid for at full maturity he will have paid $2.29 per use point. If instead a person bought VGF @ current price and paid cash, the per use point cost is $3.30. Now we know that Disney sells these all day long every day and finances over 60% of the them.

I think we can all agree that vacations are always an expense item, which means that those who go on vacation value the vacation higher than the money they are spending. Does a person who finances pay more for the same vacation as someone who doesn't, they certainly do, and they already know that, no one needs to call them names. They made a choice that works for them. OP did not ask if any of us thought financing was a good idea, he already made that decision, he asked where to finance.

BTW I have bought a few contracts, all of them direct, all of them financed via Disney, all paid off extremely early, and sold one for a profit. You may think me ludicrous, and thats ok, your welcome to your opinion. And I am happy with my decisions.

A 10 day one room stay at AKL mid Feb 2015 through priceline is $2960 cash.
a 10 day SV studio on DVC points at the financed point rate plus years dues is $515.40, or a single years savings of $2,444.60 not including tax. That is just one year. And you think it is more wise to spend that extra amount each year? To each their own.

I've decided to finance my purchase. Here's my reasoning. I was paying for a RV that I never used. Lots o' money down that hole. In addition, to paying for that RV I was also paying for some very high priced vacations. Now that the RV is sold, I'm free to buy DVC. The way I see it the amount out of pocket was actually less than the RV loan and using DVC will cut the costs of my vacations. Win-win.

BTW: I used Timesharelending I'm not sure if it was the best one, but it was crazy easy.

 

[DisneyfromDeland]

I sent you a PM.

 

[crisi]

One of the biggest problems with financing is that its really easy to end up upside down - owing far more on your points than you can get for them resale and needing to sell due to a life change. In 2009 some members faced the perfect storm - job loss, high personal expenses in overprices mortgages, high unemployment, a point rental market with a lot of supply - and they needed capital.

So when you finance ask yourself what happens if the economy crashes in six months - your points are worth 50% of what you bought them for, and you are out of a job. Can you afford to walk away from what you already paid and be foreclosed on?

 

[dsnydaddy]

One of the biggest problems with financing is that its really easy to end up upside down - owing far more on your points than you can get for them resale and needing to sell due to a life change. In 2009 some members faced the perfect storm - job loss, high personal expenses in overprices mortgages, high unemployment, a point rental market with a lot of supply - and they needed capital.

So when you finance ask yourself what happens if the economy crashes in six months - your points are worth 50% of what you bought them for, and you are out of a job. Can you afford to walk away from what you already paid and be foreclosed on?

One could say this about everything we buy. Many people ended up upside-down on their home mortgages recently. We all are usually upside down on our auto loans. Besides, if I paid cash for the purchase and the points ended up being worth half what I paid then I'd be out $5000 out of pocket. If I had to let the bank forclose on the points at this point I'm only out $1000. And if my life got that bad I'd have far worse things to worry about than my DVC points.

 

[ontheuptick]

One could say this about everything we buy. Many people ended up upside-down on their home mortgages recently. We all are usually upside down on our auto loans.

Yes, exactly. And that's exactly why you should pay cash for your DVC, your Cars, and everything (except a home). So you aren't burdened by debt.

 

[jodifla]

OP, we financed our DVC almost 20 years ago and are happy we did. We simply shifted the money we were ALREADY spending at Disney to pay off our DVC. And we kept one car longer than we might have.

I never get the people who say -- just save for five years and pay cash! Meanwhile, you've sunk money into other vacations, and the cost of DVC has skyrocketed.

Just remember the couple in "Up"!

 

[jodifla]

Yes, exactly. And that's exactly why you should pay cash for your DVC, your Cars, and everything (except a home). So you aren't burdened by debt.

Ah, the Dave Ramsey mindset.

 

[coastalhh]

Yes, exactly. And that's exactly why you should pay cash for your DVC, your Cars, and everything (except a home). So you aren't burdened by debt.

Debt is so cheap with today's interest rate you are stupid to pay cash for many things. You can get a car for 2.5% or a house for 4% or lower. Home equity etc.. Then you keep your cash to earn 7% to 12% a year on a good investment and you come out ahead.

If you burn through all your cash you lose out on the money it can make for you

 

[Bullseye]

If you own a house, then you are probably the best finance company. Consider a home equity loan if you're going the loan path. Also, before you take out a loan consider the extra cost of financing into your DVC purchase and see if that still makes financial sense over renting points or some other option. If it does then great and if not DVC will be here in 5 years after you've saved up to purchase (and if it's not then you'll be really happy you didn't buy).

We just did this, but we did a refinance with cash out. We are in the process of buying 210 points at AKV for $15K. By dropping my mortgage rate a full point it's only going to cost me about $4K over a ten year period and the interest is tax deductible. This is not a bad way to go...it certainly beats financing outright from DVC or a DVC lender.

 

[KingRichard]

Don't say no to all credit cards. lol

Our bank just gave us $10K for 18 months at 0% for only 1% transaction fee!

That's almost free money. $100 for $10K!

We paid for our next 3 vacations. lol

We were going to pay for them Jan-March with tax refunds and cash we get from investments.

Now we can take less cash now and spread it out until 2016!

Nothing wrong with that?

 

[crisi]

Debt is so cheap with today's interest rate you are stupid to pay cash for many things. You can get a car for 2.5% or a house for 4% or lower. Home equity etc.. Then you keep your cash to earn 7% to 12% a year on a good investment and you come out ahead.

If you burn through all your cash you lose out on the money it can make for you

That only makes sense if you are going to invest the cash instead of using it for your purchase - i.e. creating leverage. I actually make a few thousand dollars a year on leverage - because I have a mortgage and I have the cash to pay off that mortgage invested. A home equity line of credit will be more along 5% - a car loan is a discounted rate of the purchase price of a car - i.e. they'd give you a discount off the purchase price in cash - or a lower interest rate if you finance - me, I like the discount up front cause I can turn a conservative 8% in the stock market - and they seldom bring the rate down lower than they'd give you a cash discount for - but do bring your financial calculator car shopping). If you don't invest the cash you would have used to pay for it - you are just paying more for it.

(The other exception is high inflation along with low interest rates - sometimes you are better off financing because inflation outpaces the interest rate. Its actually pretty rare though - although it has worked out well for some DVC purchaser when prices have been climbing quickly and they've been able to get a reasonable private loan - DVCs direct finance rates are NOT good).

(Oh, a third exception - not having liquid cash at the moment. For instance, you know that your business will collect - from a responsible client - $40,000 in three months and you can use it to pay off the DVC you buy now. Or your grandmother just died, and the executor has told you that you'll get $40,000, but it will be six months before you get it.)

Buying DVC is not investing the difference.

And, yes, it can be said for any purchase - which is why you don't get over your head with luxury purchases like vacations - especially by creating a legal obligation via debt. Now, for some people, it may not be in over their head - I could, for instance finance DVC and sit there with money in the bank to pay it off, and live for six years if we faced unemployment (we are working on being able to comfortably retire early - hence the countdown). But for many people who are financing DVC - it is a risk - and perhaps one that they will live to regret.