How to Buy a Disney Vacation Club Contract with a Low Down Payment
One of the biggest barriers for many people looking to join or add-on with Disney Vacation Club can be the initial out of pocket expenses. Sometimes, the reason for this is people will become the most interested in joining or adding-on just after their Disney vacation has ended, and consequently, many of those people may have just spent thousands of dollars on a vacation.
Well, I will show you how a Disney Vacation Club contract can be purchased with a low down payment. How low? Below is an example of a DVC Resale contract that can be purchased for a total down payment less than $1,000 prior to any negotiation. Additionally, with negotiation, the down payment could become less.
Example: Saratoga Springs, 210 Point Contract, Listing ID: SS1859
The asking price for this DVC Resale Market contract is $76/pt. or$15,960 total, the closing costs are $500 and the lender fees will be approximately $300. The next set of points on this contract are coming in February 2018, so the seller has agreed to pay 2016 annual dues and credit the buyer $1,143 at closing for 2017 annual dues since all of the 2017 points have been used. Note, the 2017 annual dues will need to be paid to Disney in 2017 by the buyer, either all at once in January or monthly via a direct debit.
Using the Monera Financial loan application calculator as of 8/10/16, the down payment requirement for this contract would be as low as $1,197 using their option A. Option A would carry a 13.9% rate on their 1-5 year terms and a 14.9% rate on their 6-10 year terms. Keep in mind with Monera Financial there are no pre-payment penalties.
Now to calculate what a total down payment could be using option A at Monera Financial:
|Down Payment Required (purchase price less loan amount)||$1,197|
|Closing Costs (outside of lender fees)||$535|
|Lender Fees (approximate)||$300|
|2017 Dues Credit Paid by Seller||-$1,143|
|TOTAL DUE AT CLOSING (approximation)||$889|
Additionally, the monthly payment using option A on a 10 year term with Monera Financial in this example, would be approximately $238/month (not including annual dues).
Having the low point availability contributes to these contracts having a lower amount due at closing in two ways: 1. Monera’s model is not dependent on point availability. Naturally contracts with lower point availability will sell for lower prices and that lower price will be more favorable in Monera’s loan model. 2. Not having to pay the current year’s dues and a possible credit of next year’s dues at closing.
Further, exceptions can be requested to lower the initial 10% escrow requirement for contracts such as these that would require such low total amounts at closing.
The downside with both of these contracts and others similar to them (that could offer low down payment opportunities) is the low current point availability. However, keep in mind that with these contracts, a buyer could vacation on either one of them as early as February 1st, 2017 (in less than 6 months from now) by borrowing the 2018 points into 2017. Moreover, do not be afraid to borrow points. Sue Saunders, one of DVC Resale Market’s Agents and a Founding Member of the Disney Vacation Club, jokingly shares with Members that her and her husband make sure they borrow points every year so when the day comes that they pass away, they will pass away knowing they took next year’s vacation already 😉 .
For additional questions regarding these kinds of opportunities to join or add-on to the Disney Vacation Club, please do not hesitate to contact the friendly professionals of DVC Resale Market at 1-844-DVC-PROS (382-7767).