Financing Your DVC Contract | The DVC Show

Interested in DVC and going the route of financing your purchase? In this episode, the panel discusses financing your DVC contract and all the options available to you!
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[@kristindewitt9059]

I’m going to share my secret. We bought DVC resale. Five contracts in two years. Our family loves Disney and usually visit 3 to 4 times per year. Instead of stressing whether to save for college or family experiences/vacation DVC is kind of our back up for paying for college. So we are vacationing the heck out of our points. We’re going to live it up, make memories. If our kids don’t get full rides to Harvard (haha!) we can sell our DVC contracts. If we need to do that they’ll be no regrets. We had a ball.

[@echen71]

Thank you for presenting this angle (DVC as substitute for a college savings fund) as food for thought. Biggest drawback are the annual dues…as a pretty hefty carrying cost. I suppose the annual dues can be viewed as a substitute for money you would’ve spent on Disney vacations anyways…so great point!

[@barbaraannea.9576]

Interest rate seems so high. Try to pay cash.

[@lovinglife4574]

Just wanted to add to the discussion. Let’s say you financed a current contract at AKL selling for $22,400. If you got the best rate at 9.9% for a 5 year term. You would pay $6,089 more to finance. Bringing the total cost to $28,489. Just a factual example. At the end of the day the choice is yours.

[@vickycroft4621]

Best thing we ever bought. Old Key West 1997. Precious memories made and many gone on now. Thankful we did this. 🏰🎄

[@jroe8089]

What would Dave Ramsey do? 🤔

[@joaquinromero1606]

You can have different options, comments, do a great Math, but when you open the door of the room off your fist stay, when you are in line waiting for the bus to your hotel and the bus says: Riviera, Grand Floridian etc and you see the endless line for Pop century ( nothing wrong with it), or when you wake up at Animal Kingdom and have breakfast observing the animals, that’s when you say: is worth every penny, all the interest math can be beaten with being consistent in your payments (applies to every credit anyways) and pay earlier. No one has come back saying I regret buying. Is a awesome feeling, is not only an experience. Without DVC you will never have that feeling, unless you have all the money to throw (yes, , throw) by paying deluxe rooms out of your pocket.

[@stefaniestoler5068]

This is just such a personal decision for each person. For us, we could never afford to buy cash up front. The payments work for us and allows us all of the benefits of having DVC. We do not regret it for one second.

[@SunderAT]

People can do with their money what they please. That being said, it is objectively true that some of the value proposition that people use to sell DVC is lost when you finance the contract. There are costs associated with the financing, which take away from the potential savings of DVC. It's not a judgement on what anyone does with their money, it's just math.

[@MrMaxtothemax]

I've been researching DVC for almost a year now and this was a much-needed exploration of different types/meanings of value. Thanks, team!

[@scottwilliams1255]

Home Equity Loans (HELOCS) have higher interest rates and are variable. Consider taking advantage of the rapid increase in home values by refinancing your home with a cash out of equity at low Fixed rates of around 3% or so, and use this money to purchase your DVC along with paying off any higher interest debts you may have. This may not make sense for everyone, but some. Now your DVC purchase is built into your refinanced home mortgage.

[@RobRoyRoadie]

Exactly whatever did. Took $25k out, still lowered our monthly by $200, and still have good equity.

[@davejones2850]

I know they talk about a monetary investment for their focal point here. I do think of it as a investment for something that is way more than that. I took my wife and adult daughters to Hilton Head Resort recently. We stayed in a two bedroom. It was absolutely amazing! The rooms were spacious. The feeling at the resort was very comfortable, the mossy branches of the trees, the family of squirrels jumping from tree to tree just right outside the room. Getting up in the morning to sit on your deck in a comfortable rocking chair with your favorite beverage. And, people are happy!! They pass you by with smile of good morning! It was a feeling that has no way of putting a price tag on. If someone was to ask me if DVC is worth the price……. Absolutely, positively, from my perspective YES!!! The dvc resorts we have been to for the past 6 years we have been members, our membership has been worth every penny several times over.

[@tpward]

I'm curious to hear from the DVC real estate experts - at what point in a resort's contract lifespan do you think resales will be unattractive or financially ill-advised, that is - when there's 8 years left, 10 years left, etc.?

[@carries.213]

I went the HELOC route to buy DVC. In the past 4 years of having that loan we've now purchased 2 contracts and used the HELOC for other things. If you are someone looking to go that route please keep in mind that it can take around 30 days for your bank or Credit Union to finance and fund that loan. We were never really looking to own at any other properties besides Grand California but got an Aulani contract last year. Having that open line of credit made it easy to jump on another perfect contract when it finally dropped. Now I am also ready to go on the day they announce we can purchase DLHT.

[@Ryan_of_locksley]

Pay cash, you lose value with interest

[@RobRoyRoadie]

We actually refi’d our house and took out $25k in cash to add on at CCV. With the 2% reduction (4.75 down to 2.75) in interest on the new loan, our monthly mortgage payments are still $200 less than they were. Obviously, if you’re 25 years into a 30 year fixed mortgage, a refi is ridiculously foolish, but we were only 3 years into our loan, and were already sure we’d be moving again long before the loan was paid off. And, there’s still significant equity to ride out even a significant market adjustment.

[@vickycroft4621]

Happy birthday Pete! 🎂

[@tpg5974]

The knock on financing is that you lose a lot of the perceived savings benefits when purchasing DVC. If you calculate that by purchasing DVC you will "save" $10,000 over the length of contract ownership, that savings is reduced by interest you are paying on the financing. That said, DVC is still a dream that I hope to achieve one day.

[@steve9115]

The savings of paying cash vs financing varies depending on the interest rate but another thing to consider is the time value of money. What else could you have invested that money in for 20-30 years? I think they summed it up pretty well though at the beginning of the video when they mentioned how most won't hesitate to finance a $60k+ car. It's really up to anyone considering a dvc purchase to make that decision because only they know their financial situation.

[@atropos0754]

I financed all my direct add-ons with Disney . They make it really easy to pay it off early . Good stuff

[@konniemborja9557]

Ok so this is what i did lol, i took a loan out of my 401K for 5 years with a 4.25% interest rate that goes back to your account so you paying interest to yourself. I don’t retire for another 25+ years lol

[@TinyT510]

I really enjoy watching all things DVC especially from Pete

[@DVCFan]

Glad you like them!

[@jackpast]

Thank you for calling the people out who try to tell others how to live their lives!

[@HallartSolutions]

Just this year I financed my first DVC contract because I had my heart set on a 2042 resort, and if I had waited until I could pay cash I would lose several years of use, a significant portion of the contract when there are only 20 years left. I calculated the interest as part of the total cost, and still have a projected 50% savings rate over the hotel side. I visit 3-4 times a year and would be spending that money anyway, so it made financial sense for me, even with that dreaded interest, and I got 8.9%.

[@MayMoodArabia]

13:20 Is it correct that I can use a credit card to pay for the DVC with Disney directly? Assuming I have the full amount in cash, can I put the purchase on my Disney credit card then pay it immediately?

[@JustKev57]

Pete and DVC Fan Crew, Love This Show! So Much Knowledge about Our DVC World. I have been a Member since June 2000, sold in 2008 and became a Member again in 2013 with 3 Direct Contracts (AKV-KV, PVR and CCR) total of 310 points with a December Use Year. How do you feel about Direct versus Non Direct Purchase. Since I have always been a Member through Direct Purchase I have heard that Non Direct Purchases have less Perks. Apparently Direct Purchase Members have Blue Membership Cards and Non Direct Purchase Members have White Membership Cards and this is how Cast Members know the difference when trying to get discounts. And while I'm on the subject of Membership Cards, how do you feel about the new Digital Cards that are coming in January 2022. Since I am the primary Member on Our Contract what will this new Digital Card mean for My Wife where she is on the Contract but as a Co-Owner. I mean she doesn't even get the "Welcome Home" when she taps her Band when entering the Parks. Thank You All!!

[@rideordis810]

I bought my DVC with funds from a Heloc. The interest rate was triple to finance with Disney. When Disney opens up the Disneyland tower I plan on doing it the same way again.

[@dee_mcgee11]

I bought a small (very small) 25pt Hilton Head contract outright for $86 a point. I could not have afforded DVC any other way.

[@michaelkaufman8468]

Did I hear it right? You could purchase a resale contact with your Disney credit card? Mixed messages on the boards on only being able to place your deposit via CC. Would like to use our Disney card then pay the bill off with our loan to gain Disney points.

[@vickycroft4621]

If not for dues may buy another one but banking and borrowing works for us with 200 points. Can't put a price on memories like this and Fun!! 🏰🌐🎬🦓🦒

[@TheCostofAutism]

I remember back when DVC was just around 50 bucks a point and my ex-wife was saying that we should not buy unless we were paying cash.... Later when I finally bought the price was now double, realistically I should have financed right from the very beginning. It's not like a car that actually loses value. Yet everyone finances a car

[@kirkdenison7392]

Ant thoughts on the announcement of DVC going back to Interval International from RCI?

[@Anvilarm07]

Interesting show, and thanks; but it would have been even more interesting to see an actual example with some dollar figures with interest rates and monthly payments. Ie. Here is 200 points at X resort at $Y dollars a point and Z interest rate and your monthly payment would be ABC.

[@Kate-np4ou]

For DISNEY VISA CARD: I thought I could only put the annual dues on my card and have to use checking or savings account for monthly loan payments when buying direct?

[@natashafreeman2220]

Happy Birthday Pete!

[@mitchflatt115]

Never finance a timeshare. Paying interest on a timeshare is not good for you financially. If you can’t pay cash, you can’t afford it. Save up each month instead of making payments.

[@webguru22]

What a simplistic view. What someone can or can't afford or whether financing something makes sense is a a complicated formula, depending on many factors of someone's finances. You're the type of judgmental knucklehead they're talking about in the video. Anyone who understands personal finance knows no advice applies to everyone, especially simplistic nonsense like yours.

[@candycottrell6469]

What you need to factor in is the cost of points today, how many years to save for it , and what the cost of those points will be then. I financed my points and have no regrets doing so. I did not buy a lot of points and my loan with Monera will be over in less than 3 years.

[@csharrison2011]

Hoping someone can answer a question for me: do you find the contract first and then look for financing? Or vice versa? We bought both of our contracts with cash (one direct with DVC for Riviera and one resale for Animal Kingdom). We have add-on-itis and are looking for another AKV December use year contract and are researching all options. Thanks!

[@HeyItsMeBrandonP]

Financing with Monera is extremely easy. You can search for a resale contract first and get approved for financing at the same time you make an offer on the contract you want.

[@castlecircle7612]

I drive a 08 Carolla with 750k miles, and financed all 4 of my now paid off contracts, so to those who say no to financing, BL OH me.

[@cyrano661]

Everyone’s financial situation is different (salary, age, type of work, kids etc etc) so financing can definitely be a good option for some, but I would be careful how you guys present this option. It’s not good for everyone and when you say “There is nothing wrong” with financing” could be very misleading to some who are very emotional and impulsive bought are not in the situation that allows them to be.

[@danmullins1723]

As with ANY type of investment, folks love love love talking up those paper gains but the reality tends to distill down differently as echoed in some of the comments. The TLDR begins around the 12:00 mark and the team does an outstanding job of articulating the (potential) ROI, as always. It's hardly easy speaking of this things from an objective point of view. Absolutely love the DVC crew, and especially Pete's no nonsense 'tude - he clearly doesn't suffer fools well and this 34 year old born and raised in NY-now living in St Pete can greatly appreciated that. Assuming it's a rational spend, be it "luxury" or not, there's nothing wrong with financing (incl. extra costs) if one feels their cash can earn more by way of a different financial instrument. And even the most wealthiest individual will tell you that, you think Bezos pays CASH for everything? No, and there are a myriad of reasons why that are a bit moot for the sake of this video. The TLDR of this novella of a comment is GO FOR IT if it's not going to result in anxiety and/or have a negative result on the life of somebody else.

[@JLT3]

17:42 OK I know it’s a family show But you did say you…” if I need a bigger unit i’m going to have to spend $2000 a night” -lol… okay self banning from comments for a month

[@frankcarney4882]

Wow Sean is on, miss his food reviews.