timeshare news

In our last two blog posts (Part 1 and Part 2), The Timeshare Authority has looked at options for refinancing timeshare or selling timeshare on which you still owe debt. Here in Part 3 of the series, we’ll look at borrowing money against a timeshare you own.

Once upon a time (which is how so many fairy tales begin) timeshare owners with good credit could sometimes borrow money against their timeshare. Opportunities to do so were never abundant but there were a few specialized companies that offered loans under specific circumstances. Two such lenders, Tammac Financial and First Again, were mentioned in Part 1 of the series, but due to the current economic climate neither company is making this type of loan.

Although you will probably not be able to find any lender today who wants to loan money against your timeshare, that doesn’t mean that you are without opportunities to make your timeshare pay off. One option is to use your vacation ownership property as a timeshare rental.

The Value of Renting Timeshare

It always surprises me how many people miss this opportunity, but if you are not using your timeshare for your own vacations and travel, why not take advantage of it as a timeshare rental? Every year timeshare owners let their timeshare weeks or intervals go unused because of illness, schedule conflicts, or any number of other reasons. Yet, if you rent timeshare for an amount of money equal to your annual fees, then you have covered your expense for the year. And if you rent your timeshare for more than your annual fees, you have actually recouped money which you can use in any way you choose, including applying to your timeshare loan payment. To learn more about the possibility of turning your unused timeshare week into timeshare rental cash, visit the Sell My Timeshare NOW website or talk to the timeshare rental specialists by calling: (877) 815-4227.

While there presently may not be as many alternatives available in timeshare financing or timeshare refinancing as there have been in the past, you do still have options. And whether you have made good choices in the past about buying or selling timeshare, the important thing is that you make good choices now and in the future. There is no such thing as a one-size-fits all answer to your timeshare concerns, so take the time to ask questions, get information and find the solution that is right for you.

Parts 1 and 2 in this series:

• Can You Refinance Your Timeshare or Timeshare Resale? Part 1 of 3
• Can You Refinance Your Timeshare or Timeshare Resale? Part 2 of 3

With everyone looking to cut back on monthly bills, Sell My Timeshare NOW is often asked how timeshare owners can refinance timeshare on which they are still making payments. Timeshare owners also want to know whether they can sell timeshare they still owe money on, and whether they can borrow money against a timeshare they own in full.

These are all very important and timely questions and over the next three days, The Timeshare Authority will look at each of these issues, starting with if and how you as a timeshare owner can refinance a timeshare on which you are still making payments.

First let’s be candid and say that money is tight everywhere and credit is even tighter. But if you can lower your interest rate, you will lower the monthly payment you are making on your timeshare.

Suppose you owe $5,000 on a timeshare that is financed at 17 percent interest. If you take 5 years to pay off the debt, your monthly payment will be $124.26, for a total payout of $7455.60. If you can get the interest rate down to 11 percent, you only save $15.55 per month, which doesn’t seem like much, but over a five year period adds up to $933 saved. And who turns down $933?

Now let’s do the same comparison using a larger debt. $25,000 owed on a timeshare, financed at 17 percent means a monthly payment of $621.30 over a five-year period. At 11 percent, the monthly payment drops to $543.56. The final tally on the higher interest rate comes to $37,278, while at the 11 percent rate comes in at $32,613.60—a savings of just over $4,664 during the five-year payoff period.

For further comparison, let’s look at the $25,000 debt at both interest rates, only this time spreading them out over 10 years. At 17 percent, but a 10-year payoff, the monthly payment drops to $434.49, while at the 11 percent interest rate over this same period, the payment drops to $344.38.

Clearly, if you can refinance timeshare debt taking your monthly payment from $621.30 (the higher interest rate, shorter term) to $344.38 (the lower interest rate and the longer term), that’s enough reduction to provide relief in many household budgets. However, remember that as good as it sounds to save almost $277 monthly in your payment, in the option that calls for lower interest but also longer term; you are paying more money in the end—substantially more. That innocent sounding $344.38 turns into a whopping $41,325.60 when paid out over a ten-year period.

If you need the relief now, then it makes more sense to get into a payment plan you can afford than go with one that will result in late fees, negative items on your credit report, and ultimately higher interest rates on everything you buy. When current cash flow dictates that you must opt for paying off a debt more slowly in order to keep your monthly payments as low as possible, you can try to offset the long-term cost of the interest by paying extra payments whenever possible to ultimately shorten the period of your debt and lower the overall amount.

We used 17 percent as our higher interest rate because many timeshare companies that offer on-the-spot financing have historically done so at roughly this rate. For comparison, we used 11 percent, because consumers can often obtain credit cards with 11 percent interest rates, and transferring your timeshare debt from developer financing to a credit card may be an option for some timeshare owners. If you happen to have a credit card with a lower than 11 percent interest rate, then your savings will be even greater.

The Changing Financial Picture Limits Timeshare Refinance Options

Yet many consumers with excellent credit histories have been surprised to see their credit limits slashed at the same time their credit card company has increased their interest rates. With less open credit and a higher interest rate, refinancing timeshare to your credit card may not be your best option.

In 1996, Tammac Financial became one of the first lenders to offer timeshare refinancing, among its loan products. At this time however, Tammac Financial is not accepting timeshare financing applications, and explains it with this message that appears on its website, “Unfortunately, due to economic conditions beyond our control we are no longer accepting new loan applications.”

Another lender with a history in timeshare financing and timeshare refinance is First Again, however, currently, their website bears a similar message, “Unfortunately, due to economic forces beyond our control, First Again is presently unable to accept new loan applications; however, we are continuing to service our existing customers and recent loan applicants.”

If you belong to a credit union or have a good standing with your bank, you may be able to obtain a signature loan to refinance timeshare debt. These loans do not use the timeshare to collateralize the debt, which means there is no reason for add-on costs to the loans such as a timeshare appraisal. In fact, there are very few instances in buying or selling timeshare or financing timeshare (either new or as timeshare resales) in which you need a timeshare appraisal.

Before you make any decisions about refinancing a timeshare or transferring existing debt on your timeshare loan, look at the following:

1. Does your current loan have a prepayment penalty?
2. Does the new financing you are planning to obtain have such a penalty?
3. Are you currently able to claim your timeshare mortgage interest as a tax deduction?
4. Will you be able to claim your timeshare mortgage interest if you transfer the debt to a new loan or a credit card?
5. Are there origination fees or transfer costs for setting up the new debt?

Somewhere in your desk drawer, you have a calculator. Get it out and use it to fully analyze and compare your options. Run multiple scenarios, just as we have done in the comparisons above.

If you are uncertain about changing the way you finance your timeshare, talk with your financial advisor, bank representative, or someone you trust and who is well versed in personal finance. These days, we all need to think twice and act prudently when it comes to our dollars.

And check in with The Timeshare Authority for tomorrow’s timeshare blog; we’ll be looking at your options for selling timeshare on which you still owe money.

In a world where good customer service in any type of business just doesn’t happen as frequently as it should, this account of great service in timeshare exchange is welcomed news.

Timeshare owner, Rodney Van Housen wrote a Letter to the Editor that ran in the September/October edition of Timesharing Today. He chronicled the excellent customer service he received while trying to reserve a Branson timeshare, followed by a consecutive week in a Texas timeshare through the timeshare exchange company Interval International.

Mr. Van Housen had several specifications to address in arranging his timeshare exchange. His range for travel dates was narrow and he wasn’t sure if his timeshare points would cover both timeshare exchange weeks. But the representative at Interval International was undaunted by the challenge. So over the course of a three-hour international phone call, during which the representative and Van Housen were disconnected twice, plans were made, adjusted, and remade until finally the timeshare owner had just exactly the timeshare exchange he wanted.

Yes, You Can Exchange Timeshare

I’ve heard it before and so have you: the allegation that you can’t exchange timeshare. And timeshare owners who try to exchange timeshare but cannot be flexible about dates and resorts may have a harder time getting the timeshare exchange they want. But testimonies like this one from Timesharing Today are proof that the option to exchange timeshare really does increase its vacation value for the owner. And whether you want a Branson timeshare, a Texas timeshare, or a Manhattan timeshare condo, the combination of persistence and a dedicated timeshare exchange company are the ingredients that make the important difference.

Golf’s elite players and most ardent and well-heeled fans thought they were all set to become timeshare owners at St. Andrews. Four years ago, Wasserman Real Estate Capital secured the consent of planners to convert Hamilton Hall at St. Andrews into luxury timeshares.

The 114-year-old historic building, which sits adjacent to the Royal & Ancient (R&A) Golf Club of St Andrews, was once the famed Grand Hotel of Scotland where Edward VIII, George VI, and even Rudyard Kipling vacationed by the sea. In 1949, the building was converted into student housing for the University of St. Andrews and was used as such until it was sold in 2005 to Wasserman for approximately £20 million.

However, we all know what has happened to the real estate market since the celebratory day when Wasserman announced it had secured £84.3 million in project finance from Bank of Scotland. Instead of building 23 luxury golf timeshare apartments to be sold to 115 timeshare owners as “resident memberships” for between £750,000 and £1.9 million, (plus annual fee), Bank of Scotland found itself repossessing the property that Wasserman could no longer afford.

Now the Good News about Golf Timeshare at St. Andrews

Yet news last week says the golf timeshare project may be back on track. American businessman Herb Kohler, (a name you may recognize from the fixtures in your bathroom) already owns the luxury Old Course Hotel that sits at the other end of St. Andrews’ eighteen hole. And reports say Kohler is in the market to purchase the Hamilton Hall property for an estimated £14 million to £15 million.

Pending any unexpected problems or protests by Wasserman that believes it was unfairly evicted, Kohler may soon be the new owner of Hamilton Hall and golf timeshares on the eighteenth at St. Andrews may become a reality after all.