How are fractional vacation home co-ownerships financed?
Historically, vacation home co-ownership groups that needed bank financing had to obtain a mortgage as a group. Although this is still the most popular financing method for vacation fractional co-ownership arrangements, some lenders have recently begun offering fractional financing which allows each co-owner to obtain a separate loan secured only by his/her fractional ownership interest. Individual financing remains difficult to locate and significantly more expensive that group financing. If there will be a group mortgage, the group will need to calculate how to divide the mortgage payments. If the down payment is shared in the same proportion as the price, the mortgage will also be divided in proportion to price. So, for example, if five families each buy an equal share of a $500,000 home, and each put down $20,000, they will divide the mortgage payments equally. Where the mortgage will be divided in proportion to ownership, the mortgage payments can be lumped together with the opera
