# Pay Mortgage by Marriott Credit Card



## gravitar (May 11, 2008)

Just came back from Kauai and went to a preview presentation. One of the things they said that was a new feature if you let them hold your mortgage till term is a bonus of 25K Marriott Rewards points each 6 months. Over a ten year term that would be a bonus of 500,000 MR points.

Has anyone else been offered this? 

Just an FYI in case anyone wants to call and try to add this. (It might be for new sales only)


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## LAX Mom (May 11, 2008)

The interest rate on the loan is very high. 
Not a good deal in my opinion, but then I hate to finance anything!


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## luv2vacation (May 11, 2008)

This has been standard for a while now.  Like LAX mom said, their interest rates are very high, about 13-14%.  Although you can also put the monthly payments on your Marriott Rewards Visa (adding more points per dollar each month on top of the 25K/6 mos.), I still don't know that it would be worth the high interest rate - would have to do a cost analysis.


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## stomachdoc@mac.com (May 11, 2008)

The fine print is that you only need to finance $15K or more in order to qualify; so you can pay the rest in cash and still collect the 500000 points over 10 years.


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## Beverley (May 11, 2008)

If you were to back out a yearly cost to purchase 50K MR points from the interest costs at 13.99% your effective interest would be in the neighborhood of 10 - 11% .... still high but not 13 - 14%.  It is on new purchases through the developer, including if you were to purchase and finance a "resale" via your salesman with Marriott.  Minimum financed amount is 15K, as was mentioned above.

Beverley


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## dioxide45 (May 11, 2008)

I could buy 1,000,000 points from Marriott (spouse and myself) for $12500 over 10 years. By getting only 500,000 points from Marriott over the same term I would be paying $12725.83 in interest based on a $15,000 loan at 13.9% using the finance incentive.
This obviously excludes any increase in what Marriott may charge per point to buy points or them even completely doing away with that option.
It is definitely a bad deal in my opinion.


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## Beverley (May 11, 2008)

dioxide45 said:


> I could buy 1,000,000 points from Marriott (spouse and myself) for $12500 over 10 years. By getting only 500,000 points from Marriott over the same term I would be paying $12725.83 in interest based on a $15,000 loan at 13.9% using the finance incentive.
> This obviously excludes any increase in what Marriott may charge per point to buy points or them even completely doing away with that option.
> It is definitely a bad deal in my opinion.



Did you back out their usual usury rate of 10.99% as the difference between their usual financing rate and the new financing rate with the points is the actual cost of the points ... not all the interest, since they do charge for the use of their money if you finance at all.  This is more of a deal for someone who would finance anyway not a cash buyer.  

Beverley


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## dioxide45 (May 11, 2008)

Beverley said:


> Did you back out their usual usury rate of 10.99% as the difference between their usual financing rate and the new financing rate with the points is the actual cost of the points ... not all the interest, since they do charge for the use of their money if you finance at all.  This is more of a deal for someone who would finance anyway not a cash buyer.
> 
> Beverley



Is 10.99% the actual rate they charge. Or a rate that someone came up with as the actual cost of the points due to the value of the points????? The cost of the points is the amount of interest being paid vs paing cash.


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## Beverley (May 11, 2008)

10.99% has been the rate for financing through Marriott since 2001.  Granted it is high but it has been their financing rate.  This rate has been in effect long before they came up with this latest idea of charging 3 % more and "giving" back a return in the form of points.  So the actual cost of the points affiliated with the financing is the extra 3%. 

Beverley


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## dioxide45 (May 11, 2008)

Beverley said:


> 10.99% has been the rate for financing through Marriott since 2001.  Granted it is high but it has been their financing rate.  This rate has been in effect long before they came up with this latest idea of charging 3 % more and "giving" back a return in the form of points.  So the actual cost of the points affiliated with the financing is the extra 3%.
> 
> Beverley



So if we look at 3% then the points would cost 2380.80 or about half a cent per point. Is the 10.99% rate still available if you don't take the financing incentive? If not, then it doesn't matter what the rate is, the full rate is what should be used to calculate the cost of the incentive.


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## Eric F (May 12, 2008)

*Income Tax Deduction on Interest Expense*

No one has mentioned the possible federal income tax deduction of the interest expense paid on the mortgage in addition to the value of the MR Points. A call to your tax accountant could confirm if you qualify for the tax write off that will significantly lower the "effective interest rate".

Eric


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## majb (May 13, 2008)

*Marriott Rewards Visa*

I am interested in knowing how I can make mortage payments with my Marriott Visa. I have a payment book , but it does not offer a credit card payment option.


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## Dave M (May 13, 2008)

There is a reason for that. 

If the mortgage company were to allow you to pay by credit card, it would have to pay the credit card company fee of 2+% of your payment, thus making its very carefully structured deal with you much less profitable. That's why mortgage lenders generally do not allow payment by credit card.

It's different for a timeshare purchase, such as with Marriott, where allowing you to make the timeshare mortgage payments with your credit card might generate a timeshare sale to you that Marriott might not otherwise be able to make.


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## majb (May 13, 2008)

luv2vacation said:


> This has been standard for a while now.  Like LAX mom said, their interest rates are very high, about 13-14%.  Although you can also put the monthly payments on your Marriott Rewards Visa (adding more points per dollar each month on top of the 25K/6 mos.), I still don't know that it would be worth the high interest rate - would have to do a cost analysis.



From this post it infers that you can pay Marriott financed timeshare mortgages on your Marriott Visa. I did not think this was an option with Marriott financing.


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## luv2vacation (May 13, 2008)

Yes, you *can* pay your Marriott-financed monthly mortgage TS payments on your Marriott Visa CC.  This is a BIG selling point now for them to get you to take their financing.  I'm not sure when it started, but I have had it offered to me for well over a year now (by many different salespeople at many presentations).

They stress the additional points/dollar that you receive for the monthly payment _in addition to_ the 25K you get for every 6 months that you keep the financing.


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## kjd (May 13, 2008)

*Financing any timeshare*

What is a "good deal" when financing a timeshare?  There probably isn't one.  Financing any depreciating asset is not a "good deal".  People who finance a depreciating asset have other motives when they finance.  They are probably buying something that they can't afford to pay with cash.

Just like financing an automobile, timeshare owners have the use of the asset during the useful life of the item they finance.  If someone cannot afford to pay cash now they probably won't be able to or, won't want to pay cash in the future.  Look at the number of people at age 65 who still finance the purchase of an automobile.  I don't think that paying 13.99% interest is a prudent use of your money.  However, some people have no other choices available to them.  

What does the lender have as collateral for the timeshare loan?  Not much, except that they can take it back and try to sell it again.  In some states they can also probably seek a deficiency judgement against the borrower.  Loans of this type often are the first to go into default in an economic downturn.  The attachment of 13.99% interest rate for these types of loans may be reasonable from the lenders point of view.

I will not criticize anyone for borrowing money to buy a timeshare.  Just like I would not criticize anyone for financing an automobile.  That is, provided they have the resources to pay the loan back.  It's a free country and if someone has the money and the desire to own a timeshare then they should do it.  Even if they choose to finance it.


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## sdtugger (May 13, 2008)

*Marriott financing is a financial bloodbath*

If you finance what is reported to be the minimum with Marriott ($15,000), you would pay $2100 in interest per year for 100,000 points.  But, you purchase 100,000 points each year directly from Marriott for $1250.  Financing to get the points would cost you almost $900.

I also agree that financing a timeshare if you do not have the money is a mistake (there may be times when you can play games with credit cards and home equity loans and make a "financed" timeshare pencil out, but those games can be played with or without a timeshare).  You can still take all of the same vacations that you would have taken if you had a timeshare if you RENT until you save up the money to purchase.


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## luvgoldns (May 15, 2008)

Not sure, but is this Marriott's "solution" to no longer allowing us to outright purchase a timeshare w/our Marriott credit cards?  

FWIW, I'm not sure whether or not that is an "official" Marriott rule.  When I was in Maui last year and mentioned this can't pay by cc rule, I was told that Marriott would not turn my money away if that was the "only way I would buy".

ilene


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## Jeffrey (May 15, 2008)

*not only Marriott`s CC*

Marriott`s Visa credit card (Chase) is not a requirement to get the 25,000 points per each 6 month financing.  You can use any credit card...  You just need to finanace over 15K$ and sign up for the ACC.  I am currently using my Amex.

By using the Marriott CC, you wil also receive points for the $s charged.


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## jimf41 (May 15, 2008)

Jeffrey said:


> Marriott`s Visa credit card (Chase) is not a requirement to get the 25,000 points per each 6 month financing.  You can use any credit card...  You just need to finanace over 15K$ and sign up for the ACC.  I am currently using my Amex.
> 
> By using the Marriott CC, you wil also receive points for the $s charged.



I'm not quite following you. Are you saying you can finance it any way you want and Marriott still gives you a financing incentive? Not sure what ACC is either.


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## Jeffrey (May 15, 2008)

ACH = automatic clearing house = automatic withdrawals from your account
ACC = automatic credit card payment

In any case, I was offered either ACH or ACC.  Of yourse they sent me the ACH form first and I had to specifically request the ACC (because it costs them extra money...).

They require that the financed amount is over 15K.  The form states thay you can use either MC, Visa or Amex.

I think that they also calculate with less hassle and less non-payments if they are able to charge it to a CC each month.


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## MULTIZ321 (May 15, 2008)

My wife and I are currently at Marriott Newport Coast Villas for one more day.

Earlier in the week we sat through a presentation to buy at NCV.

A 2 BR in platnium season was offered at $33,500 with an incentive of 250,000 points if we said yes today (we didn't).

The Marriott rep said that if we financed the sale with Marriott at 13.9% we would be able to take a yearly tax deduction on the interest portion of the loan since the timeshare purchase would qualify as a second home.  Is this true?
Would the interest portion really be tax deductable?

Thanks

Richard


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## Jeffrey (May 15, 2008)

*Terms & Conditions for ACC / Form mr.acc.all 05.15.07*

Here are the terms & condition as stated in my ACC registration form:

Participation on the Marriott Rewards ACC Incintive Program to receive MR points for making loan payments using your credit card is based on the following:

-eligible owners are those individuals who purchase a new time-share estate(s) or interest(s) and meet all of the following requirements:

--financed the purchase of the time-share estate(s) or interest(s) with a loan obtained from Marriott Ownership Resorts, Inc. d/b/a Marriott Vacation Club International (MVCI), or its affiliates,
--have a curretn principal loan balance owed of at least $15,000 at enrollment,
--have agreed to make all payments required by the Promissary Note via automatic credit card payment (ACC),
--have made a ten percent down payment on theri loan at the time of purchase.

-For every six full months of continuous participation in the Program, MVCI shall deposit 25,000 MR points into the MR account of the eligible owner.  MR points shall be deposited within 60 days of the end of each six month period.

-MVCI, in its sole discretion, may determine which resorts and time-share estate(s) or interest(s) are eligible for participation in the program.

-In order to receive MR points for participation in the Program, all monies due, including but not limited to, payment of maintenance fees, tayes, special assessments, loan payment, and all other charges, are paid wthin ten days of the due date.

-Participation in the Program, including the right to receive MR points, may be prohibited if an eligible owner makes any advance payment of any amount due pursuant to the Promissary Note.

-In the event that more than one borrower is identified on the Promisary Note, only one borrower may be identified as the eligible owner, and MR points awarded for participation in the Program will be deposited into only one MR account identified above.  The MR account identified above may not be changed.

-All MR points awarded are subject to the Rules & Regulations of the MR Program which were previously disctributed and are incorporated by reference as if fully set forth herein.

-An eligible owner may elect to cease participation in the Program at any time by verbally notifying MVCI by calling Financial Services at 800-845-4226 or 801-468-4089.


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## Dave M (May 15, 2008)

MULTIZ321 said:


> The Marriott rep said that if we financed the sale with Marriott at 13.9% we would be able to take a yearly tax deduction on the interest portion of the loan since the timeshare purchase would qualify as a second home.  Is this true? Would the interest portion really be tax deductable?


It's true. Marriott writes its loans as mortgages, not as consumer loans, which many timeshare developers do. Thus, that mortgage interest is eligible for treatment as an itemized deduction on your tax return. 

In addition to the mortgage interest on your home, you may deduct mortgage interest on only one other residence. The term "residence" includes timeshares. Thus, if you owned a home, a second home and a Marriott timeshare, with mortgage financing on all three, you could deduct your primary residence mortgage interest and could choose to deduct the interest on either of the other two properties. You can make a different choice each year.


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## thinze3 (May 15, 2008)

But don't forget that the amount of interest you can deduct gets phased out as your income rises. We refinanced our home several years ago at a very low rate to help offset this.


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## MULTIZ321 (May 15, 2008)

Thanks Dave.

We were tempted but decided not to do it at this time.


Richard


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## Dave M (May 15, 2008)

thinze3 said:


> But don't forget that the amount of interest you can deduct gets phased out as your income rises.


Fortunately, that phaseout has little or no effect on most people. For 2008, the phaseout of itemized deductions doesn't kick in unless (on a joint return) adjusted gross income exceeds $159,950. And even then, the loss of itemized deductions amounts to only 1% of the income in excess of $159,950. (There are some other special rules, including some itemized deductions that are exempt from the phaseout.)


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