Best place to take a loan from?

[GoofGoof]

I want to caveat this before I make any comments. I have no issue with people owning DVC or timeshares. It is the right thing for them.

My opinion is that you should never borrow to purchase a timeshare. If you cannot pay cash for it, you don't need it. There are enough timeshares (not DVC) for sale so cheap that you can save up in a few months to buy them. There are also enough people that do this as a business that you can get excellent deals on rooms that would be less than the maintenance fees for the room. For instance, I have a recent deal on a 1-BR Boardwalk Villa for 7 nights. This is a total of ~240 points. Maintenance fees are $5.84 per point (2013). The cost for that room is $1400 in annual fees. I got my reservation for $1200. That is $200 less than what DVC owners have to pay for it directly.

A similar instance this Summer we got a timeshare in Williamsburgh for $400 for a week. The family behind me when I went through the Timeshare Sales spiel to checkin got furious because I paid that amount. They just spent $50,000 for the timeshare and their fees for that same week amount to $1200. When I showed the slick timeshare guys my contract, what I paid, they had no grounds to stand on to show "how much I will save in my life time".

My advice, get a Financial Adviser before committing.

Everyone probably has examples of times they got a great deal. I once got a toaster for 95% off in a close out sale at Macy's for $5. One if the nice ones that hold 4 slices of bread. Not sure who would pay $100 retail for a toaster, but I was pretty happy with the deal. I'm not under the illusion that toasters normally cost $5. I know I got a "special" deal.

DVC rental sites generally rent points for $13 to $14 a point. If you go to Disboard or one of the online boards with owners renting their own points you can generally knock maybe $2 to $4 off the price if you search a little. For someone to rent their points for $5 a point they had to be pretty jammed up and facing losing the points. David's gives owners $11 a point and has a wait list of renters looking for points. You got a great deal and I'm not knocking you for it, but that's far from the going rate and shouldn't be used as a comparison for the general public when considering buying in vs renting.

There are many tineshares you could buy that are cheaper than DVC. They have other drawbacks though so you have to consider all the financial factors before buying in. There is a good reason those other timeshares sell for much less (sometimes as little as a dollar). That benefit flips to a liability as soon as you become an owner.

 

[BigTxEars]

DVC is a timeshare no doubt.

But it's different than almost any other in the world IMO. If you want to stay on property at WDW there is no other timeshare option. Compare that to Hawaii, Vegas or anywhere else there are timeshares where you can pick from dozens of companies to deal with. I just do not think DVC vs Timeshare is a apple to apple comparison.

 

[raymusiccity]

DVC is a timeshare no doubt.

But it's different than almost any other in the world IMO. If you want to stay on property at WDW there is no other timeshare option. Compare that to Hawaii, Vegas or anywhere else there are timeshares where you can pick from dozens of companies to deal with. I just do not think DVC vs Timeshare is a apple to apple comparison.

I agree that 'time-share' is used to paint DVC with a very broad brush. We bought direct 4 yrs ago and love BLT as our 'home'.

Does anyone have any experience with 'DVC Resale Market, Inc.' ?

Thanks!!!

 

[BigTxEars]

I agree that 'time-share' is used to paint DVC with a very broad brush. We bought direct 4 yrs ago and love BLT as our 'home'.

Does anyone have any experience with 'DVC Resale Market, Inc.' ?

Thanks!!!

Looks new, I only say that because I looked around a lot when we bought resale this year and I never saw these guys. Website looks very nicely done But no real experience with them to share.

 

[Club Cooloholic]

I have to agree with other posters saying you should not try to buy in, resale or not, if you require a loan. It has been said countless times on here how DVC is not an investment, it is a luxury, and I mean luxury in the purest sense, this is not something you need or that is function. This board is for guidance and I would be remiss to say they should reconsider buying in of it requires a loan. I think the OP says they rent, meaning they hold no actual property or mortgage. That is where you want to be buying...and loaning money for real estate property that often grows in value, not a vacation buying plan with an end term that will eventually be worth nothing. I bought a resale contract, because we had the excess funds and yet I still question it, especially when the bill comes in for annual fees!
This is not to say DVC is an exclusive thing by any means, save up, see what deals come through, buy small contracts, but taking a loan out for it? Forget it.

 

[nickys]

I have to agree with other posters saying you should not try to buy in, resale or not, if you require a loan. It has been said countless times on here how DVC is not an investment, it is a luxury, and I mean luxury in the purest sense, this is not something you need or that is function. This board is for guidance and I would be remiss to say they should reconsider buying in of it requires a loan. I think the OP says they rent, meaning they hold no actual property or mortgage. That is where you want to be buying...and loaning money for real estate property that often grows in value, not a vacation buying plan with an end term that will eventually be worth nothing. I bought a resale contract, because we had the excess funds and yet I still question it, especially when the bill comes in for annual fees!
This is not to say DVC is an exclusive thing by any means, save up, see what deals come through, buy small contracts, but taking a loan out for it? Forget it.

Since they asked the question in 2014, I suspect they already made their decision!

 

[Sirwalterraleigh]

Not sure why you wouldn't buy into DVC without a loan. Not like most of us have 17k+ to shell out at once.

ummm...why does that baffle you, exactly??

I had a long conversation with someone at the Timeshare Store the other night. Obviously, they want you buying from them, but the woman I felt was spot on. Said she can't understand how anyone can purchase DVC through Disney anymore. Unless you're so desperate to own just a few points, owning the amount of points that many of us with kids would need for a good vacation is not realistic anymore. It's just gotten too expensive.

it has gotten “overpriced”...not “too expensive”...which means people shouldn’t buy it till the market adjusts

There is no way to economically justify buying direct from Disney these days. The benefits don't justify the steep premium you have to pay.

Then it shouldn’t be bought...
And neither should resale on the high...which is exactly where it’s at.

Pay $125 a point for boardwalk that has roughly 60% of its contract used up at this point?

Not exactly “savvy” is it?

 

[Sirwalterraleigh]

I have to agree with other posters saying you should not try to buy in, resale or not, if you require a loan. It has been said countless times on here how DVC is not an investment, it is a luxury, and I mean luxury in the purest sense, this is not something you need or that is function. This board is for guidance and I would be remiss to say they should reconsider buying in of it requires a loan. I think the OP says they rent, meaning they hold no actual property or mortgage. That is where you want to be buying...and loaning money for real estate property that often grows in value, not a vacation buying plan with an end term that will eventually be worth nothing. I bought a resale contract, because we had the excess funds and yet I still question it, especially when the bill comes in for annual fees!
This is not to say DVC is an exclusive thing by any means, save up, see what deals come through, buy small contracts, but taking a loan out for it? Forget it.

Correct. Why pay interest on disposable things like vacations? Never got that and never will

Since they asked the question in 2014, I suspect they already made their decision!

Lol...that trips people up all the time. Still a
Relevant topic, however.

 

[GoofGoof]

Pay $125 a point for boardwalk that has roughly 60% of its contract used up at this point?

Not exactly “savvy” is it?

Even more true today. There were 6 more years available back in 2014 when this was posted and the prices were lower. Even less of a deal today

There are still 22 years left at the 2042 resorts so depending on the resale price you get you may break even before they expire but it’s getting less and less likely.

 

[Sirwalterraleigh]

Even more true today. There were 6 more years available back in 2014 when this was posted and the prices were lower. Even less of a deal today

There are still 22 years left at the 2042 resorts so depending on the resale price you get you may break even before they expire but it’s getting less and less likely.

I have some past Insight/experience with DVC...

And I can’t for the life of me even guess what the end game with the contracts is.

 

[cmwade77]

I have a different opinion on loans on timeshares, I think if the fit is right, they may make sense for you.

For example, we were offered a ridiculously low interest rate of 5% direct from Disney, even with no credit in either of our names, as some of the last to get points at Grand Californian (along with several incentives), if we chose to sell our DVC contract now we would sell for well over twice what we paid for it, not counting the incentives, count those and it becomes even more outlandish to think that the value could have increased that much.

Would we have been able to purchase without the loan? No, but the loan also has helped us on our taxes, as for us the interest is deductible. Additionally, it has helped build our credit by having the on time payments and without the need for high interest credit card (which we were being offered credit cards at 30% interest rates at the time, as I said, no credit). Additionally, we now pay the dues with our debit card that provides about 2% cash back on all Disney purchases and that lowers the effective rate even further.

So, I can't use a blanket statement of you shouldn't ever get a loan, it may or may not make sense (financially or otherwise) for any individual person or family, only they can decide that.

Oh, if anyone is wondering, we hit our break even point at three trips (even accounting for dues and interest), so again, it was what worked for us.

 

[imsosarah]

OMG DO NOT DO THIS - AGAIN DO NOT DO THIS -- NEVER EVER EVER take a 401k loan for anything

If you take a 401k loan you paying back a much smaller interest rate yes, but god forbid something happens unexpectedly to your job you will owe that FULL LOAN AMOUNT back immediately and if you can't pay IN FULL IMMEDIATELY you get a penalty of 10% on top of the state and federal taxes which could be another 40% combined.


Here is a workaround if you have excellent credit and don't want a "loan" or to float a few years of interest in your savings/investments (We don't carry debt):

Look at your credit cards and many will have a zero percent balance transfer option for 12/18/24 months - off one of your credit cards and move it all there. It may be a 2-3% balance transfer fee, but way less than 6% interest. Alternatively, sometimes there are checks they send and you can write it to cash to yourself and do it. If you do this option you can not use that credit card for anything at all ever until your balance is paid or you will pay the high standard rates

Or if you want to get the points:

We charged the full amount on a sapphire card to get the miles; then we wrote a balance transfer check out to ourselves for a different credit card and used the cash from that balance transfer check to pay the sapphire credit card off. To do this you have to have 15-30k open on a few cards but if you don't carry any debt and have good credit it isn't crazy. And the points were enough to cover a number of flights back/forth to orlando for the family and another full non disney trip.

Another option is if you have a 401K to take a loan from it. When we bought ours we about 3/4 of the amount in savings and new we would have the rest in a short amount of time. So we borrowed from our 401K and it was only 3.25% and we only took it out for about 6-9 months. 401K loans have a very small interest rate for loans.

 

[Club Cooloholic]

I have a different opinion on loans on timeshares, I think if the fit is right, they may make sense for you.

For example, we were offered a ridiculously low interest rate of 5% direct from Disney, even with no credit in either of our names, as some of the last to get points at Grand Californian (along with several incentives), if we chose to sell our DVC contract now we would sell for well over twice what we paid for it, not counting the incentives, count those and it becomes even more outlandish to think that the value could have increased that much.

Would we have been able to purchase without the loan? No, but the loan also has helped us on our taxes, as for us the interest is deductible. Additionally, it has helped build our credit by having the on time payments and without the need for high interest credit card (which we were being offered credit cards at 30% interest rates at the time, as I said, no credit). Additionally, we now pay the dues with our debit card that provides about 2% cash back on all Disney purchases and that lowers the effective rate even further.

So, I can't use a blanket statement of you shouldn't ever get a loan, it may or may not make sense (financially or otherwise) for any individual person or family, only they can decide that.

Oh, if anyone is wondering, we hit our break even point at three trips (even accounting for dues and interest), so again, it was what worked for us.

What was the buy in points at that time?

OMG DO NOT DO THIS - AGAIN DO NOT DO THIS -- NEVER EVER EVER take a 401k loan for anything

If you take a 401k loan you paying back a much smaller interest rate yes, but god forbid something happens unexpectedly to your job you will owe that FULL LOAN AMOUNT back immediately and if you can't pay IN FULL IMMEDIATELY you get a penalty of 10% on top of the state and federal taxes which could be another 40% combined.


Here is a workaround if you have excellent credit and don't want a "loan" or to float a few years of interest in your savings/investments (We don't carry debt):

Look at your credit cards and many will have a zero percent balance transfer option for 12/18/24 months - off one of your credit cards and move it all there. It may be a 2-3% balance transfer fee, but way less than 6% interest. Alternatively, sometimes there are checks they send and you can write it to cash to yourself and do it. If you do this option you can not use that credit card for anything at all ever until your balance is paid or you will pay the high standard rates

Or if you want to get the points:

We charged the full amount on a sapphire card to get the miles; then we wrote a balance transfer check out to ourselves for a different credit card and used the cash from that balance transfer check to pay the sapphire credit card off. To do this you have to have 15-30k open on a few cards but if you don't carry any debt and have good credit it isn't crazy. And the points were enough to cover a number of flights back/forth to orlando for the family and another full non disney trip.

One of the problems is that the market for this is vastly different than it was several years ago. Buying direct has gotten so expensive. The best time to buy and maybe come ahead was when the economy was in the tank, but then again who had money for this kind of luxury then?

 

[imsosarah]

What was the buy in points at that time?

One of the problems is that the market for this is vastly different than it was several years ago. Buying direct has gotten so expensive. The best time to buy and maybe come ahead was when the economy was in the tank, but then again who had money for this kind of luxury then?

I bought at $165/point direct 2-3 years ago - we wanted 2 contracts direct from disney with enough points on each that each of our kids could have full "owner" rights if we gave them down to them...and will buy later aftermarket if we want down the road after the kids are married and have their own families. We mix disney in with our other travel it isn't our only travel and when we are at disney we are fine all in a regular room vs suite - so 150 points has been more than enough for us the past few years.

 

[cmwade77]

What was the buy in points at that time?

One of the problems is that the market for this is vastly different than it was several years ago. Buying direct has gotten so expensive. The best time to buy and maybe come ahead was when the economy was in the tank, but then again who had money for this kind of luxury then?

I honestly don't know, we bought 209 for specific reasons that worked for us at the time.