Saturday, October 6, 2007
With so much in the news about homeowners trying to refinance home mortgages, I thought it was a good time to also look at the question of how to refinance timeshare.
At Sell My Timeshare NOW, we are sometimes asked if an owner can sell timeshare when they still owe money on their timeshare mortgage or loan.
To sell timeshare that you do not own free and clear is just like selling a home on which you still owe money. Selling property requires that you be able to provide the buyer a clear deed or title to it, whether it is a single-family residence, condo, or timeshare. If you still owe the mortgage company for your timeshare, you must arrange to pay the mortgage or lien holder before you can provide the deed to the new owner.
For example, if you own a timeshare that you financed, and you still owe $3000 on the debt, you will want to try to resell that timeshare for $3000 or more. Any amount of money you receive in the sale that is above what you owe to the lender is yours. If you sell timeshare for $5000, and you must pay the lien holder $3000, the remaining $2000 is yours. This money is held in escrow during the transaction of the sale, until everything is completed.
But there are other approaches to sell timeshare on which you still carry a loan. You can borrow money from another source, such as a home equity line of credit or low-interest credit card and pay off your timeshare debt. Under these circumstances, the timeshare itself does not collateralize the debt. While you will now owe money to a new lender, you will own your timeshare in entirety, without mortgage debt on it.
This frees you up to enjoy the timeshare, which is now financed at a lower rate or better terms. It also means you can sell the timeshare, keeping all of what you make on it for yourself, or using those funds to pay off the new debt you took on in order to gain full title to the timeshare.
How Can Timeshare Owners Refinance Timeshare?
There are not as many options for refinancing timeshare as other types of property, but timeshare is legally considered real property and you do have some choices. One resource to investigate is Tammac Financial. Another possibility is any lender who will loan you money based on your good credit or other measure of creditworthiness.
As I always tell you, I am not a financial advisor. Paying off your timeshare mortgage can mean that you lose the option to deduct your mortgage interest from your state or federal income taxes, and the lower interest rate is not worth the amount you lose in mortgage interest deduction. It is always advisable to turn to a reputable tax or financial advisor to help you determine what is best for your individual circumstances.