When you have a mortgage loan on behalf of any bank, at any time that you require you can try to make a renegotiation to achieve more favorable conditions with the entity, through a process called modifying novation.
Also through another process you can choose to take your mortgage loan to another bank that you prefer, this process is called surrogacyThis can be done when the other bank offers you better interest and / or loan terms than the current bank where your mortgage is located. However, the original bank You can avoid surrogacy if you are match or better offer with that of the second entity in which you want to apply the change; this is called enervate surrogacy.
When starting the process of mortgage change The bank has a period of 15 days to enervate, starting from the notarial notification, and must appear before a notary stating its intention, in which it must endorse in ten business days by delivering to the alleged debtor through the written of a Binding offer in which the equalization or improvement of the mortgage conditions is expressed.
Afterwards, so that the effects of surrogacy it will be enough that the new bank pay to the previous one the outstanding amount of the loan, as well as all the accrued interest and also the commissions required, as well as formalize the subrogation by means of a public writing before a notary public.
It must be taken into account that, in both processes, novation and subrogation they have a cost, which is usually higher in surrogacy. These costs may entail notary and registration fees, some bank or tax commissions, and are limited by law.
Everything explained above is roughly the process of change of bank mortgage, along with some terminology that you may need to support you in the process. The mortgage exchange between banks It can be a time-consuming process and have some costs, however, it has many advantages that may seem beneficial to you. improve your mortgage contract, and save the greatest amount of money, in the short and medium term.
The main goal of changing banks is to get a contract that has better conditions, and thus pay a lower total amount for the mortgage, but for this we must find a bank that offers us a best binding offer. So before making the decision to change banks it is important to make a good bank search and conditions Within these. For this, online mortgage purchase sites such as HelpMyCash.com can be used since it allows us to search for information on all mortgages quickly and without leaving our home.
Before we go into other details about the mortgage change It is also important to review what the advantages are and when it is best for us to change the bank.
Advantages of changing the bank mortgage
Modify interests:
Some of the main reasons people decide to do the bank mortgage change process it is the fact of being able to change the interest rate, which entails considerable savings, by allowing modifications both in the difference, in the benchmarks, or in the bank's interest rate.
A help to negotiate:
Another way to use the mortgage subrogation it is as a technique for negotiating better conditions, using as a threat the intention to change the mortgage to another bank with better conditions. Faced with the possible loss of a client, the bank may want to match the conditions of another lender bank, however, it must be taken into account that the bank may not give in to give better conditions, and this process entails a series of considerable expenses, it is necessary to be very clear about the conditions to be negotiated, in addition to being clear about the possible consequences. And in the event that it seems that it is not convenient it is better to use some other type of process.
Eliminate abusive clauses:
When changing from one bank mortgage You have the opportunity to eliminate the abusive clauses which you do not benefit, such as the well-known floor clause, or the interests that are too high, such as the delay interest. This is one of the options that benefits clients who request the withdrawal of the floor clause, but their bank did not give in and refused to carry out a mortgage novation.
Extend the deadline:
Al change a bank mortgage You will have the opportunity to increase the term of the loan, up to the maximum that the new entity allows you. And in that way lower the monthly amount of your fee.
It is worth changing the bank mortgage
If you would like to subrogate your bank's mortgage You have to take into account that this is going to involve some expenses, starting with the commission for the subrogation, that in this subrogation you can only change the interest rate, and the term, or a combination of both. If what you have in mind is to change more things, this would no longer be a subrogation, but a novation or cancellation for a new formalization towards something considerably more expensive; So you have to focus on these changes that can be made, and put aside what is outside the scope of surrogacy, such as the expansion of the capital, that is far beyond this.
In the case of reaching an agreement in which the conditions improve considerably in the new bank to which it is planned to change the mortgage, the procedure for the subrogation will have a cost that is around 150 euros approximately. It was previously free, but that has now changed.
It must be taken into account that, propose a change of mortgage, If you paid the five-year insurance with a financed premium, the bank will not return the unconsumed premium of the remainder of the life of the insurance.
In addition to what the risk of mortgage change, and taking into account everything that is necessary to carry it out, this process is left to the decision of each person. If you get a good agreement with another bank and the improvement of the conditions you have in your current bank, and this means savings in the short and medium term for you, the change of bank mortgage can be completely worth it.
Steps to change the bank mortgage
Look for alternatives:
If the monthly installments of the first three years of the mortgage have been paid without problems, they will be in a position to apply a subrogation of our mortgage loan and change it to another bank. So the first step to carry out is to search for banks that offer better offers and compare them to assess whether they improve our current conditions, and that they accept us as clients. A method for quick and easy mortgage search, is to use a free online mortgage buyer platform, such as HelpMyCash.com
Wait for the binding offer:
By having already chosen the new bank we want subrogate our mortgage, we must submit a subrogation request. If the bank accepts this request, it has a period of 7 days to be able to present an offer that includes the new conditions to be discussed.
At the moment this offer reaches us, we will have a period of 10 days to decide if these new conditions interest us, or they have not finished convincing us.
Wait for the counter offer from our bank:
At this point in the process, our bank already knows that we have planned the change the mortgage to another bank, so it is time for you to enervate the subrogation and present us with a novation offer to prevent us from changing banks. If the novation offer offered by our current bank is better or equals the conditions of the new bank, our subrogation process will be paralyzed, and we will not be able to change the bank mortgage. But if the bank does not present a better offer, the subrogation will continue and the bank mortgage will be changed.
The process is actually much easier than it seems, as soon as you find another entity that makes you a better offer that improves your current conditions in your bank's mortgage, calculate how much the process will cost, and compare it with the savings that you will receive in the short, medium and long term, you will quickly be able to realize if it is convenient to make the change of mortgage to another bank. So you can be sure that this process is possible and depending on your case, it can mean a great saving of money; so don't be afraid to negotiate and look for better conditions for your mortgage.