How to Get Out of a Timeshare That Has a Mortgage Attached

With the promise of a luxurious vacation every year in a place that you love, along with excellent marketing and skilled sales people, it can be easy to decide to purchase a timeshare. Over time, the desirability of your vacation mecca may fade, due to changing needs. Your family circumstances may have changed, or financially, you may not be able to afford the monthly payments and maintenance fees. If you still owe money on the timeshare mortgage, getting away from the timeshare can be a challenge for many reasons unless you have the cash to pay off any remaining mortgage balance.

Step 1

Determine if the mortgage on your timeshare is a mortgage loan secured by the property. Some timeshare loans are personal loans, and do not have to be paid off before you sell your timeshare. In this case, you can sell your timeshare, and apply the money received from the sale to the timeshare loan, and pay off any remaining balance according to the original terms of the loan.

Step 2

Contact the people who own the week before or after your allotted timeshare week to see if they are interested in purchasing your timeshare. This may be the easiest way for you to sell your timeshare, because the people with the weeks adjacent to yours may be interested in adding a week to their yearly vacation without adding travel expenses. This interest may also make them willing to pay a higher price, increasing the possibility that the selling price will clear the mortgage.

Step 3

Check to see if the lender will allow you to do a short-sale of the timeshare. The lender may recognize that they are securing a depreciating asset, and that the mortgage balance is greater than the value of the property. The lender still may require you to pay the remaining balance on the loan after the sale, converting the loan to an unsecured loan. But you will be free of the yearly maintenance fees.

Tip

  • If your timeshare has an unsecured loan or if the lender will allow you to sell and pay the balance of the loan as an unsecured loan, consider giving away your timeshare. While you may still own the balance on the loan and lose any money that you have already paid, you will save considerable money each year by eliminating the maintenance payments on the timeshare.

Warning

  • Walking away from a timeshare and letting the finance company foreclose on your timeshare may mean that you will pay collection fees and other costs. It will be less expensive to work with your lender to find a solution. A timeshare management company may require your maintenance fees be completely current before they allow you to transfer ownership of your timeshare.

About the Author

Craig Woodman began writing professionally in 2007. Woodman's articles have been published in "Professional Distributor" magazine and in various online publications. He has written extensively on automotive issues, business, personal finance and recreational vehicles. Woodman is pursuing a Bachelor of Science in finance through online education.

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