Financing... Worth it to get in sooner, or wait it out while saving?

[Stargazer65]

We financed and paid it back early. I dont regret the vacation memories, our kids are almost grown up now.

 

[RamblinWreck]

Personally I would recommend a blended approach.

Finance, but also save aggressively so you can pay the loan off much faster than the terms dictate that you do.

 

[EilonwyWanderer]

Personally I would recommend a blended approach.

Finance, but also save aggressively so you can pay the loan off much faster than the terms dictate that you do.

We did this when we first bought and I just wouldn't recommend it. We financed with Disney and the rates were awful! We're VERY tempted to add on points now, but I think I'd only do it in small chunks that we could immediately pay off/put on credit card.

 

[RamblinWreck]

We did this when we first bought and I just wouldn't recommend it. We financed with Disney and the rates were awful! We're VERY tempted to add on points now, but I think I'd only do it in small chunks that we could immediately pay off/put on credit card.

Absolutely if you can afford to pay it all at once, do it.

That's what we did. We essentially loaned ourselves money out of our emergency fund, and depleted it to a level we weren't exactly comfortable with, and then built it back as quickly as we could.

But if you're going to go to Disney World every year whether you buy the contract or not, taking the loan and paying it off as fast as you can is going to work out better than spending the money on hotels now, and then buying a more expensive contract later.

 

[hglenn]

Absolutely if you can afford to pay it all at once, do it.

That's what we did. We essentially loaned ourselves money out of our emergency fund, and depleted it to a level we weren't exactly comfortable with, and then built it back as quickly as we could.

But if you're going to go to Disney World every year whether you buy the contract or not, taking the loan and paying it off as fast as you can is going to work out better than spending the money on hotels now, and then buying a more expensive contract later.

This is our current approach... But a bit blended with savings/financing.... However, once paid off, we plan to add on direct in small, 50 point increments direct and pay cash so we can eventually get the blue card.... and stay at the RIV!

 

[RoseGold]

If you have to finance, I would just stay at Swolphin until you can afford it.

Yes, the last decade has been a rocketship. Yes, resale prices have gone through the roof recently. That's why I don't see the increase as sustainable. Financing this, and then prices staying flat would be particularly bad.

Modern DVC math often doesn't work against Swolphin or even against just renting points, and that's without financing. It's not the slam dunk it used to be. And some of these loans are just predatory.

To me, this is math. Buying a luxury asset that could easily be underwater in a couple years because of financing is not a choice I would make. I would just book at the Swolphin.

 

[alohatok1986]

I do have the Disney Chase Visa... that's interesting... I never thought of that as an option.

You cannot use this option for resale from any of the brokers I contacted. This is only an option for direct. The points you earn by doing this likely will not come anywhere near the savings you would have when buying resale. Well, they didn't in my case at least.

 

[RaymOOOnd]

You cannot use this option for resale from any of the brokers I contacted. This is only an option for direct. The points you earn by doing this likely will not come anywhere near the savings you would have when buying resale. Well, they didn't in my case at least.

Well in my own case I used this approach to purchase VGF2 points direct in March with maximum incentives at <$180pp. So it was for less than the average VGF resale!

 

[alohatok1986]

I have nothing at all against financing, but personally I just didn't want to take that on for a luxury purchase. I decided we would not buy until we could pay cash. Then I spoke to a family friend who mentioned his resale closing took 11 months because the previous owners were taking one last trip and thus had a delayed closing. So I started looking for contracts with a closing date closer to my purchase date goal. I am currently in the rofr period waiting to hear on a contract that doesn't close for 6 months which has lit a fire under my butt to scrounge & scrape together everything I need before the closing date. It's going well but if for some reason I don't meet my goal I will pull a bit from savings. And if it's taken in rofr, I still have plenty of time to find another contract or 2 to still try for that October 2022 closing date goal.

 

[Robbie Cottam]

If you have to finance, I would just stay at Swolphin until you can afford it.

Yes, the last decade has been a rocketship. Yes, resale prices have gone through the roof recently. That's why I don't see the increase as sustainable. Financing this, and then prices staying flat would be particularly bad.

Modern DVC math often doesn't work against Swolphin or even against just renting points, and that's without financing. It's not the slam dunk it used to be. And some of these loans are just predatory.

To me, this is math. Buying a luxury asset that could easily be underwater in a couple years because of financing is not a choice I would make. I would just book at the Swolphin.

Last time I check the swan or dolphin can get pricey.
for a random weekend in September you would spend between 300 and 350 dollars a night with the resort fee plus tax.

After taxes you are looking at 2000 dollars for a 5 night stay. The would pay about 30 percent of a 200 point contract at RR. If 2000 is your entire vacation budget then purchasing would not work for you. But if you can cover the approximate $6000 a year to finance 200 point at RR you would be miles ahead in the long term.

 

[RoseGold]

Last time I check the swan or dolphin can get pricey.
for a random weekend in September you would spend between 300 and 350 dollars a night with the resort fee plus tax.

Last week, Dolphin was in the 170s for Thanksgiving and Christmas. It can regularly be booked with minimal notice in the 300s.

Current DVC math will never work against a 170s Dolphin room. Buy in is too expensive. It particularly won't work against RIV's brutal chart.

 

[Robbie Cottam]

We did this when we first bought and I just wouldn't recommend it. We financed with Disney and the rates were awful! We're VERY tempted to add on points now, but I think I'd only do it in small chunks that we could immediately pay off/put on credit card.

What rate did Disney offer that a credit card was a better option

 

[Dznypal]

Does Disney visa still have interest free for 6 months. That’s how we bought ours Since our card was hacked when we bought they let us put half on the card when we bought Chase also froze our account so we’re talking with chase while at the DVC place. We had to pay off the card when we got home and the other half was with interest free for 6 months we divided the amount by 6 and had it paid off within the 6 months

 

[EilonwyWanderer]

What rate did Disney offer that a credit card was a better option

I feel like it was somewhere between 11-15% whereas our credit card was 9%.

 

[Robbie Cottam]

I feel like it was somewhere between 11-15% whereas our credit card was 9%.

intersting

 

[alohatok1986]

Last time I check the swan or dolphin can get pricey.
for a random weekend in September you would spend between 300 and 350 dollars a night with the resort fee plus tax.

After taxes you are looking at 2000 dollars for a 5 night stay. The would pay about 30 percent of a 200 point contract at RR. If 2000 is your entire vacation budget then purchasing would not work for you. But if you can cover the approximate $6000 a year to finance 200 point at RR you would be miles ahead in the long term.

I swear I have stayed at the dolphin for $13 a night + parking and resort fees thanks to a priceline or hotwire blind deal (which are easy to figure out and not actually have them be "blind"). I have stayed at the swan and dolphin 5x and have never paid more than $125 a night before fees. Just my 2 cents and personal experience.

 

[Robbie Cottam]

I swear I have stayed at the dolphin for $13 a night + parking and resort fees thanks to a priceline or hotwire blind deal (which are easy to figure out and not actually have them be "blind"). I have stayed at the swan and dolphin 5x and have never paid more than $125 a night before fees. Just my 2 cents and personal experience.

I have too!
but not right now
but the resort fee is 50 or 75 dollars a night

 

[UrsulaWantsYourSoul]

just to me mention another option, some choose to do a HELOC loan for a lower interest option too. I haven’t, but just mentioning.

 

[bakerworld]

We financed all our contracts but the last (because it was too small). Didn't find it a hardship. Using a couple of the mathematicians here on the forum number parameters it worked out to be about $280/n (buy in divided by 10 years adding dues and adding interest, etc.). I just wanted to ball park to see if financing was such a terrible act of financial injustice. Truthfully, in '08/'09 we were paying $279/n for the YCBC. Frankly, I think College Tuition was the worst financial horror - it was roughly the same amount at lower interest, took longer to pay off and stopped being a tax write-off long before payoff (also payed off early, helped along by COVID).

 

[EYL]

Curious where you all weigh in on this.

My good friend has DVC and has been talking me through her experience. I've also been listening to the DVC podcasts and reading here religiously as I enter the researching phase. For background, I tend to be pretty conservative financially. I am not an impulse buyer and focus on saving. We have the money to buy a small contract, but it's not there for "that" so to speak, so I don't want to touch it. We are currently starting a specific DVC savings fund.

With that said, I do not tend to finance items other than my house and my car and prefer to save and buy. My friend, who bought her many points cash and is also conservative financially, said to consider that the prices always climb, so there's a balance between waiting and saving and getting in with the points lower.

I guess I look at the interest at financing probably outpaces the rate it increases. If you financed, did you feel it was "worth it" when in the end you spent so much more per point? Are you glad you did it?

I think my current goal is to save enough to do 60-70% cash and finance the last 30-40%, with the plan to pay it down ASAP. I've never financed for "fun" and it makes me nervous to be honest. But this is a true passion. I'm curious where others fell on this topic. As I listened to The DVC Fan podcast episode on financing I realized most of the people on it financed it, so that made me feel slightly less nervous to do it... Still weighing my options.

For me it was worth it. I purchased with the intent of financing right before they started the resale restrictions, so my resale points can be used at all future resorts. Had I waited, my points would be restricted to the O14. Returned my loan quickly thereafter.

I'm in the camp of financing responsibly. We didn't go with a timeshare loan, but went with a personal loan so the rates were much lower. It's like buying and financing a second car, if you use it, it's fine in my book.

If you ask people on this board what they regret about buying DVC, most will say that they regret not buying in sooner. The interest may cost you, but the memories you make in the meantime are priceless.