You may not be happy at all with your current bank or mortgage. Or that you have found an entity offering better conditions, fewer commissions, or a lower interest rate. Alternatively, the mortgage market situation has improved since you signed your loan, and you can now access better interest rates. It may be time to change the bank mortgage, but remember that it is not the same to change the mortgage as a subrogation.
It may sound like bureaucratic hell, or you do not feel like going through a maze of paperwork again. You may not even know how to do it. Besides, it is not an easy decision because it affects family finances.
Do not worry. We share the easiest way to change your bank mortgage to save you worries and know your options. Remember that it is a legal operation regulated by Law 5/2019, March 15, to hold real estate credit agreements.
How to Subrogate Your Mortgage?
Surrogacy is to delegate or replace competencies to others. Attention, because it can be both the debtor and the creditor positions. For example, you can transfer your mortgage to another person if your bank authorizes it when you sell your house. You can also pass your mortgage from one bank to another. Let us see how to do it quickly.
3-Step Subrogation
The bureaucratic procedure to change my bank mortgage by subrogation follows the following steps:
- The new bank must put on the table an offer whose conditions will be binding if you sign. Then, notify your former bank of the intention of subrogation. In 7 days, your former entity must certify the amount to subrogate.
- Your previous bank has 15 days from the notification to present a counteroffer to a notary.
- The notary will proceed with the subrogation if you do not accept it.
Your new entity will pay the previous bank the outstanding amount of the mortgage plus a kind of bonus based on the interest charged and pending collection and a proportional part of the notary, registration, and agency expenses. And it will remain as a new creditor. The old entity will be responsible for the rest of the notary, registration, and agency costs.
Change Your Bank Mortgage by Canceling the Current One and Hiring a New One
Another option you are extremely interested in is hiring a mortgage in a new bank responsible for canceling your current one. It is a solution that can be faster and easier than subrogation because you have no waiting periods, and your current bank cannot refuse, but in some cases, it can be more expensive because it includes one more deed.
How Much Does it Cost to Change the Bank Mortgage?
It is common for you to wonder how much it costs to change a financial institution’s mortgage. The subrogation and the mortgage change have a series of expenses you must consider. Compare this cost with the savings you will get by improving the new bank’s conditions and deciding whether you are interested in the operation.
With the subrogation, you only pay the appraisal expense, as established in Article 14 of the mortgage law: it is the only expense corresponding to the borrower. The appraisal can be between $ 300 and $ 600, while financial institutions will pay expenses such as the notary, the registry, and the agency. Another thing is that your new bank decides to assume the appraisal as a business practice.
All in All
With the mortgage change, you will have to face the deed’s cancellation of your current mortgage, registration expenses, and the cancellation fees that your bank charges you. You may also have to make an appraisal. Loan giving and the banking industry will change with time. It means there is a long-term obligation as your lenders expect you to refinance. If you decide to switch your mortgage loan, you must avoid refinancing in the same bank. You will also have to implement the rules for shifting mortgage loan services.
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