Took out a loan to pay off timeshare mortgage in order to offload - good idea?

Hi all,

My wife and I decided to take out a loan to pay off the remaining balance of the Mortgage on my Westgate timeshare. The plan was to pay it off and sell it for nothing so that we didn't have to continue to pay rising maintenance fees and no longer had the burden of it. The balance is just about $15k. I wanted to make sure this was the best move to make before pushing ahead? Are there other options?

arelg wrote:

My wife and I decided to take out a loan to pay off the remaining balance of the Mortgage on my Westgate timeshare. The plan was to pay it off and sell it for nothing so that we didn't have to continue to pay rising maintenance fees and no longer had the burden of it. The balance is just about $15k. I wanted to make sure this was the best move to make before pushing ahead? Are there other options?

Even if / once the loan is paid off, you would have a hard time giving a Westgate ownership away for free. This is because Westgate (deliberately) devalues "resale" ownerships by imposing very restrictive reservation conditions on resale owners. You would then have a paid off timeshare that no one wants and still be the owner of record responsible for maintenance fees.

To give the timeshare back to Westgate via their "Legacy" deedback program, the loan would first obviously have to be paid off in full. Westgate (believe it or not) will then still demand another $950.00 from you before they would accept a deedback. Your maintenance fee obligations will then end, but you will have given another $15k to Westgate --- and have borrowed $15k to do so.

I am NOT offering this as "advice", but you have specifically asked about "other options". One such "other option" is to just walk away from the loan right now and not pay another dime of the $15k still owed to Westgate, thereby defaulting on the loan and experiencing foreclosure. Understand clearly, however, that this particular "option" will have negative credit report ramifications lasting for the next seven years, during which time there is obvious impact with lenders on your loan eligibility anytime during that seven year time frame.

It's a difficult personal choice and decision whether or not you want to pony up $15,000 to pay off something that is, even right now, literally worthless in the resale market, while still having a different loan to pay off for that same amount of money (and maybe at a higher interest rate --- you haven't disclosed that relevant detail).

I don't envy your difficult situation. You are between a rock and a hard place. Good luck with your decision, whatever it may be.

Thanks for the feedback. The reasoning behind the loan is basically to shift where the payments go, away from paying Westgate monthly to paying my loan monthly. Also didnt mention that we plan to immediately balance transfer the loan to my Discover card which offers us 0% interest. In essence we can now hit the principal each payment rather than paying the 14% interest Westgate had us roped in. We dont have maintenance fees again until 2020 so we are hoping to pay off the mortgage and offload the timeshare before maintenance fees kick back in. The loan was approved on the spot and we have the cash in hand, just wanted to check if there was another route to take besides this...

Is your current home not yet paid off, but you still want to move? Then that is perfectly possible, even if you still have a loan. You can sell or rent out your home. These two solutions have different financial implications. You want to finance your new home with a mortgage loan. Then you can take out a new mortgage loan or opt for a bridging loan . Despite the advantages of a credit transfer, it can sometimes be cheaper to repay or buy off the loan on your former home in full and take out a new one for your new property. If you get some more info then view this thread: https://www.redweek.com/forums/loan/

That's an interesting comparison and analogy but here is where it's "apples to oranges". Arel G. owes more on his/her loan than what the property is worth. Also, Arel G. does not want to "move" (i.e. buy another/different timeshare). Arel just wants to get rid of it even though (s)he owes more on it than what it is worth.