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How to Get Home Equity Loans for Timeshares

The benefits of buying timeshares are easy to see, but getting the necessary finance can be difficult unless you consider home equity loans. A personal loan for buying timeshares is often a lesser option due to the lack of collateral. Another option is using a timeshare loan from a timeshare company, but these loans can be more expensive than your typical home equity loan. There are 3 factors which can help you use home equity loans to buy a timeshare. 


Before we examine the 3 factors in how you can obtain home equity loans for buying timeshares, you should understand what this loan is. A home equity loan uses the equity you have in your primary home as collateral to back another loan. This type of loan is a secondary mortgage. Equity is defined as the amount left from subtracting the value of your home from the primary mortgage. If your home is valued at $250,000 and you owe $100,000 on a mortgage the equity in your home is $150,000. This amount can be used to obtain a secondary loan in which the cash can then be used as you wish. 

Intention of Taking a Loan

This explanation leads us back to using home equity loans for buying timeshares. The bank is going to want to know how you will use the money you obtain in the home equity loan. The use you have for those funds speaks to the risk you pose to the bank. You never want to lie on an application, so it is wise to tell the bank you intend to use the home equity loan as a timeshare loan.


The second factor in gaining a home equity loan for a timeshare is related to what type of timeshare you are buying into. If you want a home equity loan for $150,000 for a timeshare, the bank expects this to be for a share in the title of that property. The risk is lowered in this type of situation because you actually own a piece of that property. In the event you default on the loan the timeshare could be sold before your primary home is repossessed. In this example you would actually have double collateral for the loan.


The third aspect which can determine your eligibility for a timeshare loan is if you are buying "time" rather than property. In this event the home equity loan may only be awarded if the amount is less than $10,000 for the timeshare loan. This lowers the risk and still provides your primary home as collateral. You should have a real estate agent when buying timeshares to help you find a bank willing to lend you home equity loans. With a real estate agent it can be easier to start enjoying the amenities and benefits of your timeshare by moving the sale of the timeshare along smoothly.