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Newbie question: If you are purchasing a TS resale and the seller has a mortgage, are there any issues to look out for? Is it the same process as a normal house sale? Is there such thing as a TS mortgage? Or a loan which places a lien on a TS? Sorry for the numerous Q's and thanks.
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A timeshare with a loan balance just makes things more difficult and gives you one more thing to do due diligence on. If the loan is assumable- it could be assumed if not it will have to be paid off in the closing process. Usually these are not common as selling a timeshare with a loan outstanding usually ends up with the seller paying more to settle than they can get in the sales price.
It has always been one of my rules that if you can't pay for it in cash-don't buy the timeshare. -
Marriott writes deeds of trust or mortgages (depending on jurisdiction) for their timeshares. I agree with Tony on the economic wisdom and would never (again) finance such a purchase. My head was somewhere else than my usual logical self (having nothing to do with vacation euphoria) when we bought. Fortunately, at the time, the interest rate wasn't as usurous as some (under 11%) and the points incentives had significant value (for vacations). And, when we bought, early in resort development, was, other than pre-construction, the best time to make such a mistake, since intervals now sell for far more than we paid and resale is approaching our developer cap cost (irrespective of net interest after tax deductions).
All that said, I'll bet there are a fair amount of timeshare owners of high end units who use home equity to pay for them. Even rich people like to preserve capital
Edited to add that, regarding closing, it shouldn't be much of an issue, though a bit more time consuming. Any competent closing/escrow company can handle it. If a high-end unit, might be good to insure the title just to be safe.
PatComment
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Thank you! I will count on the escrow company to saty on top of it.Comment
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