Looking at the Numbers of Selling a Timeshare

Many people are looking to cut back on bills in the current economy and if you own vacation property you are probably looking to sell a timeshare. But that may not be your only option it is also possible to refinance. Lets take a closer look at refinancing and some other options that may give you a light at the end of the tunnel.

It is important to be totally honest with yourself in the first place. You must realize that money is tight just about everywhere right now. This is especially true for luxury purchases like timeshares. That being said if you already have a loan it is usually possible to get a lower interest rate.  After examining all of your options you still may finding that selling a timeshare is the right thing to do.

Timeshares are commonly financed at much higher rates of interest than traditional mortgages so there is often more wiggle room. Lets imaging that you owe $5,000 at 15% for a monthly payment of $119 for a total debt load of $7140, if you can reduce the interest to 10% you can reduce your payment to $106 per month for a total savings of $780. That may not seem significant but, the wealthy think in terms of overall savings.

Now consider that the numbers we are working with are much larger, well then that is when the wiggle room really gets important. You go from a little savings per month to a lot of savings per month that really makes a difference in the short term.

If the savings we are talking about is still not enough consider that we are talking about a 5 year pay off for this particular timeshare. Many banks will finance or modify payments into a 10 year loan. Sure this prolongs your being free and clear but it also spreads out the responsibility and makes it more manageable. Instead of selling many people are just looking for things to be a little more manageable.

Decreasing the interest rate and prolonging the payment period may make a monthly payment more manageable but it will also end up costing you more in the long run. Taking a hard look at all of your finances and realizing that it may be wiser to cut out other unnecessary expenses could give you the same monthly financial savings.

However many people in this recent economy need whatever help they can get. While they may realize that in the long run their earning power will return it is taking everything they have just to stay afloat. Whatever short term savings they can scrape together can help pay the mortgage and put food on the table. You may find that selling a timeshare is really your only option.

If you do find yourself in a position of refinancing for a longer period keep in mind that double debt payments can also significantly reduce your overall debt payment while still giving you the leeway to make smaller payments if your finances demand.

When purchasing a time share in the beginning many people are lured into the on the spot purchase and builder financing by the stellar deals and smooth sales tactics that time shares are famous for. To state it simply, builder financing is a rip off, you can do better putting the entire purchase on a credit card and making monthly payments.

This unfortunately is not always an option in the current economic environment. With banks lowering credit lines and increasing interest rates what options do you have?

Personal relationships come in handy during bad times and this is no exception. If you have a good relationship with a local credit union or bank this may be your best option. This relationship can allow you to be more than a number on a risk assessment report. Local banks still make loans based on personal relationships and reputations.

Before selling a timeshare or making any refinancing decisions you should consider the following:

• Does your current loan have an type or a prepayment penalty?
• Does the new financing you are planning to obtain have such a penalty?
• Is your timeshare mortgage a tax deduction?
• If you transfer the loan to a credit card will you retain the same level of taxable benefits?
• What will you closing cost be?

If you don’t know the answers to these questions talk to an accountant that can help you analyze the situation.

Making unwise financial decisions got this country and the rest of the world into heaps of trouble. Learn from the past mistakes of the whole and do not repeat the learning lessons. If you need to sell your time share, sell, if there are no refinancing options available to you, selling a timeshare might be your only option.