Resale Purchases - Pay In Full or Finance?

[tfc3rid]

Love reading through the ROFR threads and the Closing Time threads. I'm curious for those of you who are active on the resale market, are you purchasing these in full or are you financing a portion after a hearty deposit/down payment?

I'm evaluating a potential contract through resale versus VDH direct and debating how to make that purchase work. I'd love to pay in full but that's not realistic for me.

Thanks!

 

[RoseGold]

The math on DVC is already razor thin against renting points or other hotels. If I had to finance, I wouldn't buy. I would just rent points.

These loans are at insane rates now, and they carry additional costs to close that can also flip the math. I have seen some people in the past do things like low rate HELOCs, that kind of thing. That's a lot of risk for me when I can just book Dolphin for $215.

 

[Lumpy1106]

Pay in full - period. It's pre-paid vacation. Would you finance a vacation?

 

[linzjane88]

There are a few financing options with some making a bit of sense and others not so much. Some of the loans geared towards timeshares or DVC specifically are 10% or greater which is wild to me and consensus around here is 'hard no'.

There are options through Lightstream and some others that will give you a shorter term loan for 6% ish.

If you are buying direct you can also open a few 0% interest for a year CC's and rake in some points while stretching your payoff for the year. You can't really do that going resale because I am pretty sure the title companies only let you put a small fraction down on a CC as a deposit. I personally did Lightstream and made double payments to cut the term in half but had I gone direct I would have done the credit card route.

 

[malvin25]

Agree with what has already been said. Buying mine cash as well, not a great decision to finance this kind of purchase especially now.

 

[Bucketfoot]

Two direct and one resale all in cash. That said, had we bought VGC pre-opening when we were much youger(which we have long regretted not doing), we would have had to finance it.

 

[tfc3rid]

I mean, my 3 direct purchases decades ago was financed through Disney but I ended up paying them all off within 3 years... I would never finance anything and pay it out over the entire term, I always end up paying off early.

 

[Dobermanns]

All my purchases have been paid in full (cash for resale, charge to credit card then pay in full for direct for Disney rewards). I would rather buy multiple small contracts than finance a big contract.
Edited to clarify buy smaller contracts as funds become available.

 

[Willow1213]

We are paying cash on a resale purchase. I mean, I don't have the money just sitting in my savings account, but I have some investments that I am liquidating to do so. I placed the deposit on my Visa to get the points, and will pay all off once the cash funds have hit my account. That will happen well before my CC statment is posted or my closing docs received.
We waited MANY years to be able to afford this, and we're making sacrifices on which contract in order to make it happen. Instead of the Poly contract we dreamed of, we're saving about $7k by purchasing at Saratoga instead.

 

[lilsonicfan]

Cash on a resale account here - financing rates seem insanely high. Even the home equity line of credit we used previously was up to 7% or so. Sites like Monera Financial have rates starting at 16%. That is insane. I gather buying from DVC direct comes with slightly better rates, but slight as in 10%. Also insane.

I'm sure it can make sense for some, but this is really an unnecessary fun purchase for me. I don't take that for granted at all, but for me if it were between financing and not purchasing, I wouldn't purchase.

 

[EYL]

Finance responsibly. Prices now are lower. By the time you have cash for a full payment, prices might be higher. The interest cost could be a wash at that point. But by then, you'll have a few years worth of memories with your friends and loved ones. Do your research and find a lower interest rate that you can afford.

 

[JulieBeeRN]

We paid our contracts in full. We might have considered financing when the interest rates were lower, but paying cash made more sense for our finances.

 

[DDuckSouthBend]

We paid cash for our two direct purchases. We could not see financing it, instead we cut expenses and saved the funds for the purchase. (actually we over saved and ended up adding on the same amount of points 8 months after the initial purchase)

 

[robinb]

We have 300 points and paid cash for all of our DVC contracts.

If you need to finance your resale, how can you afford to go on a vacation? Just using those points at WDW is ridiculously expensive these days. We have an 8-day trip planned for September with my DD and her BF. I'm looking at $2797 just for 4 park passes ($348 per day). Add into that our average of $75 per person in meals ($2,400 or $300 per day, a combination of mostly CS and a couple TS), $300 for a rental car (my DH gets a great rate) and airfare ($1400 right now) and I get $6900 for 8 days. That doesn't include mouse ears, G+, ILL$, or anything else.

 

[Twohsieh]

We paid all cash for both our direct and resale contracts. If we had to finance these timeshares, we would have never purchased them. Also, there is another expense other than the initial purchase price of the timeshare-the monthly maintenance fees which increase every year. Our monthly DVC maintenance fees would cover a car payment.

 

[Sandisw]

It really is a personal decision. We almost financed when we first bought and we were comfortable with that option.

We had a budget we had every year for vacation and the number of points we would by, with MFs and financing would stay in thst budget. That was enough for us to jump in.

Things changed and we didn’t end up needing to do jt. Just be aware of all the pros and cons.

 

[BamaGuy44]

At current interest rates it's hard to make a case for financing. When I bought in 2021, I didn't see much value in pulling money out of investments to avoid a 4% loan for 2-3 years, so I financed. But it would be tough to swallow at 8-10%. But as someone said, most likely prices would be higher by the tie someone saved up the cash.

For a short term with a heavy down payment I don't think it's a disaster if it fits comfortably into your finances. "fits comfortably" is a judgment everyone has to make for themselves. I don't run the math against renting every time or Swolphin because I don't consider them the same product. Waiting 2 or 3 years and saving has its own drawbacks.

 

[disney-inspired]

I'm financing two contracts but have planned to pay them back in gazelle mode and should have them paid off by June next year. They haven't closed yet so loan hasn't officially started so for the time I'm just throwing money into my HYSA until it's time to start paying them.

 

[Nursemanit]

I was able to get 5% personal loans with a 3 year term - better than selling stock to pay cash in my case

If I did not have the money somewhere - I would not finance as life happens and I enjoy knowing I could sell stock to cover it if I was sick or lost income.

Rental rates will always beat 10% interest and you have the flexibility to not rent and not pay MF.

 

[tom1944]

I had the ability to borrow at 4% years ago from my pension plan. You did not put your plan at risk by borrowing the funds. I would consider that option. Rates at the time were double digits so 4% was really good.


I have cash value life insurance with cash value that I can borrow at 8% and even borrowing the cash I have more insurance coverage than my spouse needs so I might consider that if I want to buy direct points. The dividends would go a long way to paying the loan off.

Most likely I would buy less points for cash though.