Bridget's Blog

head_left_image

Timeshare Default -Shows as a Foreclosure!

Timeshare Default -Shows as a Foreclosure!

 

A borrower recently contacted me about purchasing a home in Maryland.   After discussing her needs, I reviewed her credit.

 

She has a timeshare owned jointly with her ex that he has not made payments on it since about 4 months after they purchased it (almost 2 years ago).  She was very surprised to find that her credit report is showing the default as a "Foreclosure; Real Estate Mortgage".

 

 If it is coded on the credit report as a foreclosure, both Fannie Mae and Freddie Mac (conventional financing) view it as they would any other foreclosure.  A foreclosure means that it could be 7 years before being eligible for conventional financing.

 

Should I buy a timeshare?

 

 

Should I Buy A Timeshare?   You may have a place to stay for 2 weeks a year, but you may not be able to buy a home!  The monthly payment and maintenance fees are counted in your debt ratio.  Default (stop making the payments) and it could show as a foreclosure on your credit report, meaning potentially no loan, or a less desireable loan.

 

FHA to the Rescue!

As of this writing, this will not disqualify her for a new mortgage if she is using FHA financing.  The good news for this borrower is that FHA views this as unpaid consumer debt and not a foreclosure, no matter how it is coded on the credit report.

 

7 YEARS to wait to buy a first home because buying a timeshare vacation spot?  Is it worth it?   Think twice before buying that timeshare, and certainly before you choose to stop paying on it.  Get all the facts and be sure you make an informed decision. 

 

Timeshare Default -Shows as a Foreclosure!

Warm Regards,

Bridget McGee  Maryland Mortgage Mama  NMLS# 196068  Corridor Mortgage Group.   410-960-2061 EHO   bmcgee@corridormtg.com or marylandmortgagemama@gmail.com

 

If you are considering purchasing a home in Maryland and want to be sure you are mortgage ready, my brother Tony and I will be happy to help! We help to make the mortgage process a pleasure! 

If you already own your home, we are happy to provide a no-cost mortgage review to help you to determine if refinancing may be in your best interest.  Please contact me at 410-960-2061.

Comment balloon 2 commentsBridget "Mortgage Mama" McGee • August 11 2015 04:39PM
Timeshare Default -Shows as a Foreclosure!
share
Timeshare Default -Shows as a Foreclosure! A borrower recently contacted me about purchasing a home in Maryland. After discussing her needs, I reviewed her credit. She has a timeshare owned jointly with her ex that he has not made payments on… more
Where Do I Apply For A Passport In Maryland?
share
Where Do I Apply For A Passport In Maryland? My husband and I have been talking about getting passports for years. Since he was in the military, he never needed one, mine expired many years ago and since we haven't gone outside of the U. S., we… more