Timeshare Condos - Financing Guide
Financing enables a consumer to purchase a larger timeshare condo in a more desirable resort or season than they would otherwise be able to afford. The only problem is that rates are generally quite high due to the fact that timeshares decrease in value over time. Developers selling new timeshare condos almost always provide financing but new timeshares are already priced at twice the cost of a resale. Add the notoriously high interest rates and it may not be worth the cost.
Getting a loan from a bank or mortgage company is another option but this can be difficult because of the risks and potential complications involved. Deeded timeshares are more secure than right-to-use or points-based timeshares because they represent a real property. This makes them easier to finance and so it would be worth looking for a deeded timeshare condo.
Financing a resale timeshare, on the other hand, is quite difficult. Very few companies offer this service. The best thing to do with a resale is to take over the existing owner's payments as this works out much cheaper than getting a new loan. You are also much more likely to get financing in this way as most banks and mortgage companies will not provide financing on resales. Even if you can get financing for a resale it may not be worth it. Maintenance fees, the interest costs and other timeshare related expenditures can add up to quite a lot. It may be worth exploring other options such as renting or auction sales.
Fractional timeshares (private residence clubs) are almost always deeded and are relatively easy to finance because they are exclusive, luxury vacation homes divided between far fewer owners than the average timeshare condo. Prices for these high-end luxury vacation homes can easily range from $100,000 to $1,000,000. As far as banks and mortgage companies are concerned it is worth risking a loan to customers owning a fractional timeshare as it is quite likely that they will be able to afford the repayments and the high interest rates.
The average timeshare condo normally costs under $50,000 but banks will generally only lend a maximum of $25,000. Typical interest rates for most timeshare loans will be between 12 and 18 percent.
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