Did you buy outright or finance?

[lovinlilo]

I'm at the point now where I'm taking the numbers and seeing how they fit into my life. I have a good idea of the number of points I want and what the cost will be. Now I have that nice round number more questions are raised.

For me, it means do we take our entire nest egg and buy outright (which isn't appealing) or do I finance. The financing option is very appealing for the tax write off but the monthly payments are not.

I understand this is an individual decision but I'm curious if anyone would be willing to share with me how they made the decisions they made.

BTW - A third option I'm considering is waiting another year or so and then buying outright. But it is far less appealing.

[AFMom]

Life's short - buy now (:clappingh :clappingh ). Sorry -
We bought outright our first 100 points, but then financed out 150 point add-on. Had some trips coming up and it made more sense to just buy them!

[Stimpy]

For our first contract, we financed through DVC for almost the whole first year. Then we had unexpected large check come and we used most of it to pay off the contract in full. We originally financed for 4 years, I think. We had ever intention of paying the loan off early anyway by making larger monthly payments than needed. (We do the same thing with all our loans...car loan, mortgage)

On our add-on, we paid "in-full" on our Disney Visa (add-on was "only" 50 points). Sounds like a bad deal but it worked well for us. Since someone was gifting us 25 of the points and we had our tax return for the other 25, we paid the credit card off that month and still got the Disney rewards.

But like you said, that's just how we handled it. Good Luck with your decision!

[cobbler]

We financed.

We weren't going to, we really were going to save up and pay outright. But I honestly sat down and did the math and we would come out ahead by financing than with waiting to pay outright.

We took out the loan for 10 years to have the lower monthly payment - just in case - but we will have it paid off in 2.5 years.

I used loan calculator at bankrate.com to help me figure things. After the 2.5 years I will have paid only 1850 in interest. Which means my points will have cost me about 91.60 something a point. Not to shabby.

Without any incentives and using the SSR at 101 a point, I would have paid 3900 more today than I did when I bought 6 months ago, so even with financing I am ahead by $2000.

Of course this doesn't take into consideration any specials or going resale.

Either way we figured we would come out ahead and have 3-4 years of vacations to enjoy on top of it.

[DVCerLee]

We bought our 80 points outright. I hate and I mean hate the thought of paying interest! I love, however getting paid interest! I'd rather have less, than pay interest.

Lee

[Deep-Thots]

You can always try to pay full freight (or more than the going rate) for a very small resale contract somewhere (maybe at OKW or HHI, where they seem to allow smaller contracts to get through at lower prices -- though lately some BWV 100-150 pt contracts have been going through for $81 ppt, with pts. becoming available this year. Also, they've been allowing some 120 pt SSR contracts through for $82 ppt.... though *both* of these examples are *larger* contracts, not the 50-pt contracts I was originally implying) just to get into the system, then do an add-on where you really want to stay (you don't say) so that you can finance through Disney.

We have paid outright for all of our points: resale, add-on (Disney Visa, which was paid off immediately), then resale.

[PoohsPal]

We paid half up front and financed teh rest for 1 year. I know money people will tell me I did a bad thing, but did not want to empty my savings.

[Plutofan2]

We bought outright. Prices have been going up for sometime. If you need to finance the purchase you should compare your total costs with financing and compare it to renting points. Good luck in your decisions. We have never regreted our purchases.

[KNWVIKING]

IMO a "nest egg" is for an emergency or a needed repair - roof,car,hospital,etc - not a toy. I don't think I'd ever advise someone to spend all their liquid cash that way.

We finainced thru Disney just for the ease & quickness of the transaction, then paid that loan off with our LOC.

One thing to consider is that the interest is tax deductible.

[lovinlilo]

IMO a "nest egg" is for an emergency or a needed repair - roof,car,hospital,etc - not a toy. I don't think I'd ever advise someone to spend all their liquid cash that way.

One thing to consider is that the interest is tax deductible.

It's like you crawled into my head and read my mind. A year and a half ago DH was laid off 3 days after we signed the mortgage papers for a house we just built. It was very scarey because we didn't have much of a savings after investing it in the house. I promised myself to never leave myself in a jam like that again.

I just got my DVC book from Disney this week and have been looking at their paperwork. Do they let you put down whatever amount you want or do you have to do their increments? I'd be comfortable putting down half and then financing the rest with the intention of paying off early. I'm ashamed to say I don't exactly understand what type of loan I'd be getting - is it considered a second home/mortgage, personal loan? The interest rates for preferred are around 8.5% which seems rather high to me which makes me think its a personal loan.

Sorry for firing off so many questions. I would jump out of an airplane without hesitation but financial decisions like this freeze me up.

[jiggerj]

For me, it means do we take our entire nest egg and buy outright (which isn't appealing) or do I finance. The financing option is very appealing for the tax write off but the monthly payments are not.


Fortunate enough to purchase outright, but would never have considered purchasing outright if it meant I was depleating my entire nest egg. I would have financed as long as it worked within my means-

IMO a "nest egg" is for an emergency or a needed repair - roof,car,hospital,etc - not a toy. I don't think I'd ever advise someone to spend all their liquid cash that way.
.

I agree- :) A nest egg is there for when you LEAST want to spend it but when you have to , you have it! :) And if you dont spend it just think what you will have in the cash kiddie in the years to come- It would just stink if something came up and it always does and you had to SELL your new DVC to cover it- :(

[athenna]

I financed my original 150 points. Took out a 7 year loan. 7 may sound odd, but 10 sounded too darn long and w/5, the monthyl payments were a little bigger than I wanted to shell out. Bought my 50 points outright before the price increase last summer..However, I am taking some of the profits from the sale of my house and giving them 50% of what I still owe them so I'll have them paid off in 3 more years instead of 6 more.

[Debbie in Seattle]

Bought about 225 points at both Boardwalk and BCV outright. Have since sold Boardwalk. BUT, we are fortunate enough to have our kids grown, house paid off and are debt free. Prior to that, there would of been no way!

[Stimpy]

It's like you crawled into my head and read my mind. A year and a half ago DH was laid off 3 days after we signed the mortgage papers for a house we just built. It was very scarey because we didn't have much of a savings after investing it in the house. I promised myself to never leave myself in a jam like that again.

I just got my DVC book from Disney this week and have been looking at their paperwork. Do they let you put down whatever amount you want or do you have to do their increments? I'd be comfortable putting down half and then financing the rest with the intention of paying off early. I'm ashamed to say I don't exactly understand what type of loan I'd be getting - is it considered a second home/mortgage, personal loan? The interest rates for preferred are around 8.5% which seems rather high to me which makes me think its a personal loan.

Sorry for firing off so many questions. I would jump out of an airplane without hesitation but financial decisions like this freeze me up.


I know you can put down whatever amount you want. We put a big chunk as a downpayment on our original contract in order to have lower payments.

[withdisneyspirit]

Paid outright for both resale contracts. DH and I are debt averse; he hates having a mortgage too:upsidedow We probably would have waited to buy until we could afford it without overly depleting our savings.

The rate of 8.5% does sound like a preferred rate when you consider that the prime rate is now at 7.75%!!! 8.5% is just 3/4 of a percent more; this rate is similar (but a bit higher) to the rate for a Home Equity LOC. Oh, and the more you put down, the more attractive the terms, I believe...

[Ms. Mouse]

We financed our 180 BWV points through DVC. Couldn't have done it any other way...

[mushu]

Last June we bough outright.

[DisFlan]

Paid cash. We're 2 years from retirement, our financial "life essentials" (medical, insurance, estate) are arranged and covered, retirement is funded at max, DS is finishing college in May (paid for), we have other savings and our house is 18 months to pay off. The DVC finance charges we didn't pay can go for retirement use (Disney trips!).

Also, it was our personal preference not to finance a luxury purchase such as DVC. Our DVC came after all of the above was taken care of. But YMMV. I don't fault anyone for financing or wanting to join sooner. We're "old school" and we did what fits us best.


DisFlan

[Rozzie]

yep we financed.:bagovermy

we put down 30% and did some # crunching similar to Cobblers. With the point cost just going up, and with the special incentives they were offering, just was the right time. I agree with Viking also, IMHO, we don't touch our nest egg for anything---except roof caving in, medical emergencies,etc. Good thing, because this year has had unexpected expenses which would have blown us out of the water a few years ago. RIght now, we are in process of puffing that egg back up....:teacher:

It is a personal decision, and we feel comfortable with it. We did 10 years for the lower payments, but we pay everything off early anyway, and our goal is to have it paid off in 4. When we were looking at the $$$ we were spending on deluxe accomadations 3x a year, it was a easy decision for us. I sleep easy at night!

Good luck to you! Hope it all bounces your way!:)

[Ginger]

We too financed through DVC. But purchasing DVC is a personal decision. There is not a wrong or right way to do it. Do what fits best for you and your family.

[carolina_yankee]

As others have said, financing is a personal decision. We financed because we'd likely never have enough on hand to purchase outright. We also bought during the Friends & Family discount, so we did very well - even with interest added in. However, I'm in a secure position and have the income to afford the monthly payment - so each person's circumstances differ. The bottom line is that the longer you wait, the more expensive DVC become, and the shorter the contract.

DVC wants you to put down 10%, but you can put down more. Obviously, the more you put down, the quicker it's paid off.

Here's a thought - you could use the amount you've saved to buy DVC outright, and then pay yourself the monthly payment to replace the nest egg. No interest is involved, so you'll 'pay it off' quicker. The downside is this requires discipline - you don't charge late fees to yourself, and you can't default on yoruself.

If you finance, you've got the nest egg for an emergency (plus DVC for a cheap vacation even in lean times) or you might even make all you money back on a resale if your nest egg didn't cover the hardship. For me, the key question would be whether the monthly payments are affordable. Good luck with your decision!

Dirk

[cslittle999]

We bought a resale and put it on our home equity line of credit. The line of credit has half the rate and allows us total flexibility in how we pay it off. Even if we had bought from Disney I would have put it on my credit card to get the points and then paid the credit card off with the line of credit.

[Plutofan2]

If you can not get a decent interest rate then I would recommend that you compare your total costs with mortgage interest and compre it to renting points until you can afford it. You need to factor in that the point price will be going up during that time. But if you wait there are strong rumors that the next DVC will be a monorail resort. Good luck.