Financing Directly Through DVC - Credit Rate / Score

fearthisinc

Mouseketeer
Joined
Oct 9, 2006
Ok.. So after speaking with the rep.. Discussing our plans and what we get out of the DVC we are thinking we might be better off going directly through DVC.. We looked at resale for the Polynesian (and other resorts) however we like the idea of having the ownership for the next 48 years and being able to pass it down.. The benefits of membership which include the discounts off the annual passes also help as it will save us $100 off each pass.. We are currently a family of three with the baby turning 2 this summer.. Soon he will be needed a pass and we also anticipate having 1 or 2 more kids.. As you can see the savings on the annual passes keeps growing.. Over the course of 48 years you are looking at somewhere between $18k - 24K.. Granted that is based off getting an annual pass every year..

Anyway, I was wondering if anyone has any inside info on how the financing works through disney.. I have read a few posts where some mention that they just look at your score and then dont actually report anything to the credit companies.. The way the rep made it sound was that they literally run your credit to get the score which tells them what category you fall in.. I have the "free credit report" thing and just ran all three to see where I was at.. The three scores ranged from 762 - 767.. Anyone know what the formula is for determining if you qualify for the standard, preferred, or premium rate? and before anyone says anything about financing.. We are putting a large chunk as a down payment.. Roughly 45% which we are putting through a credit card to get the bonus.. So we would only be financing a small amount through Disney which we plan to make extra payments on..
 
According to the website, "good" credit seems to get a 12% interest rate, and "excellent" be at 10%. Do you have any other financing mechanisms or sources for funds available to you?
In my experience a score of 720 should be the threshold for "excellent," but that rate is still way too high. You could probably get a car loan at 2.5%, so a personal loan at 10% seems excessive to me.

https://disneyvacationclub.disney.go.com/membership/financing/
 
I bought directly recently and financed for the time being until we pay off around the 6 month mark. They told us that the highest tier credit was 12% at the 10% down payment level. I think if you put 20% down you could get down to the 10% rate, but we had no interest in putting that much down since we were going to pay it off quickly. Your guide should be able to tell you what the percentage is based on how much you are putting down. Also if you are married I was told they will run both peoples credit and pick the best score. This is just to put you in the right tier, but then there is a separate loan application that is done with your closing documents. Since they already know you are ok, it's just a formality. That may confuse you when the paperwork shows up though.

The annual pass discount is a good one, but just to clarify... you can pass a resale contract down to your kids also in the future, as long as they are at least 18 years old at the time.
 
It's unlikely there will be an AP discount for the next 48 years, so don't do the math that way. Keep in mind that when DVC started, there were free length of stay tickets and free valet, after all.

Not saying that direct won't work for you, but be realistic about the discounting and keep the timelines close in.
 


Just noticed who started this thread. Sorry I wasn't paying attention. I will stick with what I posted on the other area as what to figure out first.
 
Before you buy direct figure out what DVC resort you want, then UY, then points needed. After that decide whether you should buy direct or resale.
 
Don't buy based on the annual pass discounts. They're not part of your contract, but are currently offered to members by Disney Parks. Discounts come and go, and there's nothing at all to stop Disney Parks from pulling that AP discount at any time.
 


My suggestions, don't buy based on perks or discounts that change all of the time. Don't finance unless you really have to and add the additional cost to your study numbers. Don't expect to vacation the same each year and you may not need AP's, other things get in the way, school, sports, work, health, you may grow tired of Disney vacations. Don't buy to pass it on, the kids may not want anything to do with Disney and the resorts will be well worn.

:earsboy: Bill

 
Have a think about whether you are sure the Poly will still work in the future. a family of 5 has different needs to a family of 3. as a family of 5 we bought in to stay in 2 bedrooms as we needed space and facilities as the kids grew older. The studio only thing of the Poly would so not have worked for us.
 
I second the thought about the studios at Poly for a family of 5, we would have bought direct if it had even a 1 bedroom option. It just doesn't really work for a family of 5 with small kids. You or your significant other will have to be on the reservation if you get 2 studios and your magic band will only work for 1 of the studios.
 
Ok.. So after speaking with the rep.. Discussing our plans and what we get out of the DVC we are thinking we might be better off going directly through DVC.. We looked at resale for the Polynesian (and other resorts) however we like the idea of having the ownership for the next 48 years and being able to pass it down.. The benefits of membership which include the discounts off the annual passes also help as it will save us $100 off each pass.. We are currently a family of three with the baby turning 2 this summer.. Soon he will be needed a pass and we also anticipate having 1 or 2 more kids.. As you can see the savings on the annual passes keeps growing.. Over the course of 48 years you are looking at somewhere between $18k - 24K.. Granted that is based off getting an annual pass every year..

Anyway, I was wondering if anyone has any inside info on how the financing works through disney.. I have read a few posts where some mention that they just look at your score and then dont actually report anything to the credit companies.. The way the rep made it sound was that they literally run your credit to get the score which tells them what category you fall in.. I have the "free credit report" thing and just ran all three to see where I was at.. The three scores ranged from 762 - 767.. Anyone know what the formula is for determining if you qualify for the standard, preferred, or premium rate? and before anyone says anything about financing.. We are putting a large chunk as a down payment.. Roughly 45% which we are putting through a credit card to get the bonus.. So we would only be financing a small amount through Disney which we plan to make extra payments on..


Those things are the same whether you buy direct or resale. It's resort specific, it doesn't matter how you buy into the resort.

Like others have said don't count on the AP discount. It could go away for all members at any time.

I wouldn't buy into the Polynesian with a family of 5. We're a family of 5. We are trying the Polynesian this summer (with our resale SSR points) I wouldn't want to stay there all the time though. My kids are getting older and we need more space. We're doing a split stay with a 1 bedroom at the BC.
 
Hum... resale at <$100 a point, direct at $175. Then ad 10-12 % interest, so direct is $192.50-$196 a points... Already having credit concerns. I would really think that over a few times.
 
A 200+ point Poly resale falls under $150/point. A savings of $20+/point at that level is not a rounding error, and if you're already financing, it suggests it's not pocket change for you.

I do agree you have to consider the impact of financing. 10-15% financing is dear and should only be considered for any length of time for things that are essential to continued life. A timeshare never qualifies. This is my personal opinion, and I am debt averse, but 10%+ financing is awful.
 
Ok.. So after speaking with the rep.. Discussing our plans and what we get out of the DVC we are thinking we might be better off going directly through DVC.. We looked at resale for the Polynesian (and other resorts) however we like the idea of having the ownership for the next 48 years and being able to pass it down.. The benefits of membership which include the discounts off the annual passes also help as it will save us $100 off each pass.. We are currently a family of three with the baby turning 2 this summer.. Soon he will be needed a pass and we also anticipate having 1 or 2 more kids.. As you can see the savings on the annual passes keeps growing.. Over the course of 48 years you are looking at somewhere between $18k - 24K.. Granted that is based off getting an annual pass every year..

Anyway, I was wondering if anyone has any inside info on how the financing works through disney.. I have read a few posts where some mention that they just look at your score and then dont actually report anything to the credit companies.. The way the rep made it sound was that they literally run your credit to get the score which tells them what category you fall in.. I have the "free credit report" thing and just ran all three to see where I was at.. The three scores ranged from 762 - 767.. Anyone know what the formula is for determining if you qualify for the standard, preferred, or premium rate? and before anyone says anything about financing.. We are putting a large chunk as a down payment.. Roughly 45% which we are putting through a credit card to get the bonus.. So we would only be financing a small amount through Disney which we plan to make extra payments on..
IMO financing a luxury timeshare is a poor choice but if that's what you decide, there are financing options for resale as well. It sounds like the salespeople have gotten to you and convinced you to worry about things that don't especially matter. While I might worry about a 2042 expiration, I certainly wouldn't buy retail just to get a few years more, the value difference there is only a few $ per point difference but the cost difference is dramatic. Even for Poly there is quite a potential savings of several thousand dollars resale. You can get all the benefits worthwhile buy buying 25 pts retail
 
Since you say you have approximately 45% of the cost of buying Polynesian direct I would work with that figure. Look at a resale at AKV or SSR. You may be able to get the same amount of points for that amount and not have to finance it all. Personally, I wouldn't be comfortable financing DVC, but I know tons of people do it every year.

ETA
I'm not sure how many points you were thinking of but I'll use 200 as an example. The cost would be 35,000 before financing. Forty five percent of $35,000 is just under $16,000. Doing a quick search I found 2 different AKV 200 point contracts listed for $83 a point for a total of $16,600 plus closing costs.
 
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Thanks for the replies.. Just to clarify, I have no "concerns" with credit.. My credit is on the better side with scores of 760+.. I was merely inquiring on how DVC made their decision if you were preferred, premier, or standard.. The reason being is that I was trying to do the math to ensure that even with adding the finance rate in we would still save money in the long run... We are only choosing the 10 year financing as a "safety net" should some unthinkable financial problem arise. Our plan from the beginning was to throw a large amount down in cash, somewhere where we are comfortable... When we saw the 220 point package with the price of $35,200 plus misc. closing/dues costs we came to a figure of around $36,600 total.. We figured we would drop $16,600 down (roughly 45%) and finance the remaining $20k through Disney direct... The reason for doing this was two fold.. First, we had heard that going direct through Disney was a lot simpler.. I have read that going third party lending you are required to go through a process similar to obtaining a mortgage vs Disney where they run a credit check and if your score is good and you have don't have anything horrible like bankruptcies then you are approved.. Also, at the current moment most time share lenders are in the same ballpark as Disney.. Second, and as I stated above, we figured financing would give us a "safety net".. We could drop make double, triple, quadruple, payments to the principle, however should some unexpected incident occur in the future where we could no longer pay, our payment would drop down to the base payment of roughly $250 (estimated).. Lastly, from what I have read on some of the forums, the interest paid on the loans direct through DVC qualify as tax deductions vs third party lending..

So yes.. Obviously if we had the entire amount I would drop it down immediately.. But the way we estimated the balance we figured we would have the 20k being financed paid off in under 4 years... And that is giving ourselves a relaxed repayment plan..

I'm not sure how many points you were thinking of but I'll use 200 as an example. The cost would be 35,000 before financing. Forty five percent of $35,000 is just under $16,000. Doing a quick search I found 2 different AKV 200 point contracts listed for $83 a point for a total of $16,600 plus closing costs.

MsJprincess - Yes.. We have also considered buying at the Animal Kingdom.. We could comfortably get a 250 point package by going resale with Animal Kingdom.. We have stayed there in the past and love the atmosphere.. However the benefit of a monorail is huge to us.. With strollers and kids, the benefit of walking out of your room and hoping on a monorail to get to the park is a huge perk.. At other resorts you are folding up strollers to get on a bus while also lugging bags and whatnot.. Also, with the plan for more children it makes things a lot more difficult.. Now granted you could use those points from Animal Kingdom to stay on the monorail, however I suspect that with more and more people renting points you will soon find those rooms are all booked by the 7 month window.. That is another reason the 11 month window is a huge plus... As I mentioned in another thread, our travel plans normally have us in Disney for 1 week in May/June (end of May/beginning of june) where we normally stay at Beach Club, 4 nights in October (Usually 2nd to 3rd week of October) where we normally stay at Polynesian for the Halloween Party, and 4 nights in December (Always the first week) where we also normally stay at Polynesian for the Christmas party.. The October and December trips would have me worried if I buy into the Animal Kingdom as there is no guarantee of getting a room at Polynesian or any monorail resort, once the 7 month window approaches.. Don't get me wrong, it won't cancel our plans if we have to stay at the Animal Kingdom..
 
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Since you say you have approximately 45% of the cost of buying Polynesian direct I would work with that figure. Look at a resale at AKV or SSR. You may be able to get the same amount of points for that amount and not have to finance it all.
Thanks for the replies.. Just to clarify, I have no "concerns" with credit.. My credit is on the better side with scores of 760+.. I was merely inquiring on how DVC made their decision if you were preferred, premier, or standard.. The reason being is that I was trying to do the math to ensure that even with adding the finance rate in we would still save money in the long run... We are only choosing the 10 year financing as a "safety net" should some unthinkable financial problem arise. Our plan from the beginning was to throw a large amount down in cash, somewhere where we are comfortable... When we saw the 220 point package with the price of $35,200 plus misc. closing/dues costs we came to a figure of around $36,600 total.. We figured we would drop $16,600 down (roughly 45%) and finance the remaining $20k through Disney direct... The reason for doing this was two fold.. First, we had heard that going direct through Disney was a lot simpler.. I have read that going third party lending you are required to go through a process similar to obtaining a mortgage vs Disney where they run a credit check and if your score is good and you have don't have anything horrible like bankruptcies then you are approved.. Also, at the current moment most time share lenders are in the same ballpark as Disney.. Second, and as I stated above, we figured financing would give us a "safety net".. We could drop make double, triple, quadruple, payments to the principle, however should some unexpected incident occur in the future where we could no longer pay, our payment would drop down to the base payment of roughly $250 (estimated).. Lastly, from what I have read on some of the forums, the interest paid on the loans direct through DVC qualify as tax deductions vs third party lending..

So yes.. Obviously if we had the entire amount I would drop it down immediately.. But the way we estimated the balance we figured we would have the 20k being financed paid off in under 4 years... And that is giving ourselves a relaxed repayment plan..



MsJprincess - Yes.. We have also considered buying at the Animal Kingdom.. We could comfortably get a 250 point package by going resale with Animal Kingdom.. We have stayed there in the past and love the atmosphere.. However the benefit of a monorail is huge to us.. With strollers and kids, the benefit of walking out of your room and hoping on a monorail to get to the park is a huge perk.. At other resorts you are folding up strollers to get on a bus while also lugging bags and whatnot.. Also, with the plan for more children it makes things a lot more difficult.. Now granted you could use those points from Animal Kingdom to stay on the monorail, however I suspect that with more and more people renting points you will soon find those rooms are all booked by the 7 month window.. That is another reason the 11 month window is a huge plus... As I mentioned in another thread, our travel plans normally have us in Disney for 1 week in May/June where we normally stay at Beach Club, 4 nights in October where we normally stay at Polynesian for the Halloween Party, and 4 nights in December where we also normally stay at Polynesian for the Christmas party.. The October and December trips would have me worried if I buy into the Animal Kingdom as there is no guarantee of getting a room at Polynesian once the 7 month window approaches..


Renting points shouldn't matter as far as 7mo availability. There are still the same amount of points out there whether an owner uses them or rents them out. If you really want a monorail resort I would look at a BLT resale.

The only way I would do direct for Poly is if I wanted to stay there 90% of the time and traveled during busy season. Of course you know what's best. But as a parent with 3 kids I think staying in a studio all the time will get old pretty quickly. I didn't mind it when the kids were little but now that the're older I can only deal with it for short trips.
 
No offence intended, just trying to point out the real cost of buying direct at a location without 1 or 2 BR units for a growing family of 5. I would think twice about putting that much out before seeing/staying there. As your family ages, a studio will get over crowded quickly. If you want to buy direct you can get CCV and maybe BLT, both have larger units, 1, 2 and 3 BR.
Good luck with your decision and an early Welcome Home.
 
BLT doesn't get him PVB in the 11 month window any better than AKV does though
I don't think I said it did. He mentioned the convenience of the monorail. I was just pointing out that BLT may be a better fit. It's cheaper and they have bigger accomodations.
 

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