Timeshares: Things You Should Know
Timeshares are, hmm, great if you are using it frequently and able to plan and stick to your vacation plans. The problem is, a timeshare requires planning and booking your fav resort anywhere from six to twelve months in advance. Many can do it and make it work, many think they can and find out, they thought wrong.
Timeshare property generally comes in two flavors - Deeded and Non-Deeded / Right-To-Use. Deeded properties are deeded in perpetuity and may be bequeathed to heirs. Right-To-Use ownership allows the owner usage of a unit or units over a lengthy period of time, typically 30-yrs or longer. A Timeshare is best considered an investment into your well-being and future vacations, not a financial investment! So, seriously think about this.
Usually, a Timeshare does not increase in value and if you later want to sell, it is done to break even or suffer a loss. If you stop paying on a timeshare loan, the resort will typically hand you over to a collections agency or begin the foreclosure process and eventually reclaim the deed. Just like a house. Your credit will suffer.
If you buy, get the lowest rate and insist. Usually rates are 10-15% for loan, which is insane. Once bought, you cannot refinance the loan (as a house) with a bank because banks do not refi timeshares--I repeat-- banks do not refi timeshares because there is nothing to repossess should you default. Your deed to the timeshare is "interest" only in the resort where you bought it. The bank cannot repossess the resort or building because the resort owns it, not you. You only have an "interest" in it.
The only way to refi your original loan rate is via a personal loan to you from a bank, use of a credit car or get a home equity loan and then payoff the timeshare balance.
Timeshares can be a godsend or horror story of dollars wasted and it all depends how often you use it. But think about this: if you end up paying $500 a month for a $30,000 interest in a Wyndham timeshare, you get two weeks a year at that resort or others. So for 10 months you pay $500. The timeshare provides you first class accomodations but that is it. You still have to get there, still have to eat, still have to rent things etc. So, for $5000 (10 x $500 mo), is this REALLY a good deal??? Maybe, maybe not.
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