It is a strategy that is being promoted with great force to improve the conditions of a mortgage through your surrogacy. Something as simple as modifying any part of the contract to benefit from the offers that are presented through this financial product. But not in all situations it is worth formalizing it. Due to a series of factors that will depend fundamentally on the spending that the new operation entails.
Subrogation can be carried out between individuals and the most common, between financial entities. Well, this second, which is called creditor subrogation, is presented under a more flexible format for encourage competition between banks. Because it consists of changing a mortgage from one financial institution to another that substantially improves the conditions of the contract.
With several advantages that it can provide that users contain their expenses. Because in effect, it avoids its cancellation and as a consequence of this action, the formalization of a new mortgage loan. The amount saved after formalizing this operation can reach up to 2% of the demanded capital, which is the amount derived from the exemption of its main commissions (cancellation, study or opening). In practice it will mean that for an average mortgage of 200.000 euros it will generate a saving close to 4.000 euros.
As a formula for investment
At this time, the brick has become a new instrument to channel investment by individuals. To the point that some of them opt for this unique strategy to make their savings profitable. There are two reasons for choosing this action and that makes it very satisfactory for your interests. On the one hand, the weak performance of fixed income derivatives (term deposits, bank promissory notes, public debt, etc.). Where you rarely get a return greater than 1%. On the other hand, the possibilities that the rises in the stock markets have been exhausted. Or even significant cuts may be generated from now on.
And on the other hand, the increase that is taking place in real estate operations. Where there are many users who choose this system to make your assets profitable. In this sense, the lowering of interest rates on mortgages marketed by financial institutions has a lot to do with it. In what is constituted as a claim to hire them with better contracting conditions. Through different strategies used in the formalization of this financial product.
Spreads below 1%
In this sense, the mortgage loans that you can find from now on present much more competitive conditions than before. It is not surprising that you can find yourself today with mortgages with spreads below 1%. In addition, a large part of the offer developed by banks is exempt from commissions and other expenses in its management. With the added incentive that you can change your mortgage to save very important money for your checking account balance.
Offers in this class of product are very common among banks. And in any case, they offer a softer interest rate than a couple of years ago. The only problem for its formalization is that the conditions for its approval have been raised notably. It is no longer enough to present a payroll, but the operation must be supported by a excellent banking history by the customer. It even offers the possibility of lowering the interest by means of a greater bond between the client and his bank. In this way, the interest rate can be lowered by a few tenths of a percentage. Although for this it will be necessary to contract other banking products. Among them, investment funds, pension plans, home insurance or time deposits among some of the most relevant.
Interest in buying a home
All these factors have had a decisive influence on the fact that the purchase of a home is a reality. And whose maximum exponent is represented by the subrogation of mortgages. It is another strategy designed to save a few euros in the formalization of this operation. Although it will be necessary to channel it in the most correct way. Because in effect, it cannot always be a beneficial move for your interests. Even you can lose money if you don't channel it properly. That is why it is so important that you know what this kind of unique operations consists of.
For this you will have a series of informative supports whose main objective will be that you know a little more about these characteristic mortgages. Because it can come in handy in any situation you may go through. Where it will be necessary for you to change your mortgage credit to improve your personal accounts from these precise moments. If you follow carefully how this process develops, you will have a little easier, not only investing in a home, but also to optimize operation. Because brick has once again become another of the most important sources for investment.
Mortgages with registry changes
However, the data for the month of June of this year, and released by the National Statistics Institute (INE) are not very optimistic with the acceptance of this banking operation by users. Because in effect, they show that the number of operations that changed entity (subrogations to the creditor) fell 37,4% compared to the same month last year. Not surprisingly, this operation is carried out when it is completely certain that the contracting conditions of this banking product will be improved. Something that does not always occur, as is going to be verified. And that makes many holders are reaction to this variation of the contract.
In any case, the decrease in the price of the Euribor (- 0,124% during the month of May) has caused banks to currently have mortgages with spreads below 1%. Factor that is causing some users to want to change their line of credit for the purchase of a home. On the other, much more advantageous for their interests and that generates more savings in their expenses. From levels starting from 2%, or even more expansive, in which they were hired several years ago. Well, in this scenario it is more beneficial to carry out this mortgage movement, and therefore it is completely logical that they consider this change in their financing strategy. But with a series of precautions so as not to derail your expectations to contain the expenses in your checking account.
Surrogacy with economic cost
However, it is necessary to know that this operation will not be free in any of the cases. To begin with, because it will have to be faced a series of disbursements for its formalization (Notary, registration, management and appraisal expenses). Although the part that takes more financial contributions resides in the commission that banks apply for this concept. Between 0,25% and 0,50% on the outstanding balance, and that in a mortgage of 100.000 euros it could approach up to 500 euros. This is a percentage that is valid for all operations carried out as of April 2003. In any case, there will be no choice but to analyze the clauses of the contract to verify its amount and if this penalty is included. Because not even all mortgage loans incorporate it. Your situation varies depending on the selected model.
The next step is to calculate if it will really be worth the formalization of the new mortgage. Because it may well happen that the difference between the amount saved and the expenses of this change are minimal. Or at best under insignificant differences that will cast doubt on the effectiveness of this measure. To the point that in many of these situations, the headlines are inclined to continue as before.
Advantages granted by banks
Not all banks offer their credits with this feature. To the point that it will be necessary to analyze the current offer to detect which are the mortgages that may be changed entity and under what conditions. One of these options comes from the ING Direct Orange Mortgage It is sold with total availability so that its clients can opt for another financing model that presents better conditions. Because it is made without any commission for its subrogation. The freedom to formalize surrogacy, therefore, is maximum.
Bankinter's Sin mortgage, for its part, generates a subrogation commission of 0,50% in the first 5 years and 0,25% for the rest of the contracted period. Other banks, on the other hand, base their commercial strategy on assuming the expenses of management, property registration and appraisal. As a commercial strategy to attract a greater number of customers.
Although generally the surrogacy is not a free operation. Rather, it requires some expenses originated by its formalization or by the penalty imposed from the financial institutions themselves. The key is that the resulting amount generates a series of savings with respect to the previous contracting model. Where probably only an excellent proposal is the trigger to change your mind.