Posted on: 12th Mar, 2012 01:33 am
Hi there… need your suggestions!! I bought a timeshare back in beginning of 2007. It's on my credit report as an instalment loan and I guess it is same as a car loan right. But I still get 1098 Tax forms from the timeshare company declaring mortgage interest I paid. Why isn't this on my credit report as a mortgage? Obviously it's being reported to the IRS as a mortgage.
Hi Gisellee,
In my opinion, it will be a better option if you consult an attorney in this regard and clarify the matter. Apart from that, you can also have a word with the timeshare company and ask them to clarify the matter.
Thanks,
Jerry
In my opinion, it will be a better option if you consult an attorney in this regard and clarify the matter. Apart from that, you can also have a word with the timeshare company and ask them to clarify the matter.
Thanks,
Jerry
How a timeshare loan is reported to the credit bureaus does not determine how the IRS treats the interest paid.
The IRS treats the interest paid as mortgage interest, so, you get a 1098 and that is correct for you to receive.
Some lenders report the timeshare loan to the credit bureaus as an instalment loan and some report as a mortgage.
Some lenders when underwriting for mortgage loans treat the existing timeshare loans as a personal loan and some treat them as mortgages. FHA guidelines treat them as personal loans.
This is similar to Home Equity Lines of Credit. Lenders report HELOCs to the credit bureaus as revolving lines of credit. They are second mortgages. The IRS treats the interest paid as mortgage interest.
The IRS treats the interest paid as mortgage interest, so, you get a 1098 and that is correct for you to receive.
Some lenders report the timeshare loan to the credit bureaus as an instalment loan and some report as a mortgage.
Some lenders when underwriting for mortgage loans treat the existing timeshare loans as a personal loan and some treat them as mortgages. FHA guidelines treat them as personal loans.
This is similar to Home Equity Lines of Credit. Lenders report HELOCs to the credit bureaus as revolving lines of credit. They are second mortgages. The IRS treats the interest paid as mortgage interest.
Each situation and contract is different; however, if you do not make the payments, the timeshare developer will likely take you to collections after you miss your first payment. They may report you to the Internal Revenue Service (IRS) or Canada Revenue Agency. This can ultimately affect your credit score, making future financial investments very difficult. Here you will find more information about how timeshares can affect your credit score:
https://www.timesharescam.com/blog/76-collections-can-the-resort-affect-my-credit-score/
https://www.timesharescam.com/blog/76-collections-can-the-resort-affect-my-credit-score/