What is mortgage subrogation

When do you talk about making a subrogation of a mortgage, We are talking about a modification that is made on some of the points or factors of a mortgage because we want to take another entity in which they charge us less interest or give us the possibility of paying it in much less time. These can be subrogation from the person who owes the money or from the creditor.

What happens when the subrogation is from the debtor party

When the subrogation occurs in the debtor or between individuals, what is done is change the mortgage holder. This is normal when buying a house that is currently mortgaged.

The bank is not obliged to accept the new debtor if it does not see fit

The bank where the mortgage is to be transferred may or may not accept the new debtor. Before giving an answer, the bank will have to make a risk assessment with this new person to be able to verify whether or not you can access. In case the new debtor is a risk customer for the entity, there is a high probability that the entity will not accept you as a customer, so you will have to look for an entity that offers you similar conditions.

This allows assume debt without having to make any extra payment for this purpose. However, if you are going to have to pay the surrogacy expenses. These expenses correspond to the notary, the agency, the records and also a subrogation commission that is given at the time the mortgage is going to start.

Then we have the creditor subrogation that can also occur between entities. In this case, what is done is change the mortgage from one bank to another.

Thanks to this, each of the clients who want to make a mortgage subrogation They will be able to improve the conditions of said loan without this implying that the credit has to be canceled or even without having to formalize a new contract. Surrogacy is one of the better options for people that they are going through economic problems, however, will depend a lot on the time that they pay it and their annual interest rate.

Tips for a successful mortgage subrogation

When a client is not satisfied with the conditions that his mortgage gives him, he usually begins to raise the possibility of making a mortgage subrogation. Which is based on putting the mortgage loan in another bank, which we have already seen that offers us better conditions.

However, finding a bank that gives us the best conditions is not so easy. These are the tips that you should never forget if you want to get everything to go well in your surrogacy.

You don't have to talk to your bank to be able to do a surrogacy

To be able to do a surrogacy, you don't have to ask the bank for permission with which you have the mortgage; Since in the contract that we sign with them, there is no clause that tells us that we have to stay with it X time or tell them that we want to change banks. What we must bear in mind is that if we want to move to another bank we must have at least 3 years of paid mortgage. The new entity will be in charge of contacting the previous entity to tell them that you want to change and cancel your debt with them in less than 7 days.

The bank may make us a counter offer

It is clear that what bank is not interested is losing customers. This can make your bank, when it finds out that you want to change entities and have a new mortgage with another bank, a new offer for you to stay with them. This counter offer may equal what we are going to have in the other entity, but some banks even improve it. The reasonable period that the entity has to give you a good offer is 15 days after you communicate your plans to go to another entity. The intention to improve the offer must always be made under a notary.

All subrogations have additional costs

In case we do not know how these procedures are carried out, we anticipate that you have a Surrogacy carries expenses that you must have planned so that in the end it will not be more expensive than you expect.

Between the surrogacy expenses are the expenses of notary's office, registration and management expenses. Also, you may have to pay a small commission.

You should also keep in mind that by paying less each ms, the time of the mortgage can increase.

When you don't want to change banks, you also have options

If you do not want to change banks, you can carry out a novation Through which you have the possibility of having better conditions but without having to change banks, which would save extra expenses.

There is also another option which is mortgage deficiency. Here, we could only pay the interest without contributing fees for a certain period of time.

Choose quantity and quality at all times

You don't want to just reduce the amount. Most people who seek this type of subrogation do so seeking to pay less each month, without realizing that many entities offer to pay the same but longer. We must not only look for the possibility of paying less, but of paying the full amount in fewer years. This is very simple, what we must do is find the entity that charges us the least interest.

What you should know if you want to change your mortgage or if it is convenient for you to change your mortgage

If you have a mortgage credit that is more than 5 years old, then it is a good time to switch to another entity, especially if the interest rate is higher than 12%

In case you have just asked for a loan or have an interest rate lower than 10%, what is recommended is not to make a subrogation even if you have more than 4 years.

Before choosing any entity, evaluate very well the insurance it offers you and what are the coverages that your mortgage credit.
If you have been paying your mortgage for more than 10 years, experts recommend that you no longer make any changes since in this period you have stopped paying interest and begin to pay principal.

What are the cases in which a mortgage loan can be subrogated

Remember that having a credit with an entity When it comes to a mortgage, it doesn't force you to stay there until the mortgage expires. If you find an entity that offers you better terms or much lower interest, do not miss the opportunity to change except in cases where the mortgage has been paid for more than 10 years, since in this type of case the interest is almost paid and changing us can symbolize paying again.

What are the steps before a surrogacy

If you as a customer, you have a mortgage but an entity offers you better conditionsThis must be done in writing with all the conditions that it offered you at first. This action is called a “binding offer”. It is the entity that makes you the new offer, the one in charge of communicating to the previous entity, your desire to make the change and they will tell the entity that within 7 days, deliver the amount owed on the mortgage. At this time and in order to save a client, your entity can give you a new offer.

If you decide to consider staying with your entity

In case you can consider enervating your surrogacy, that is to say that you accept the new conditions of your entity, you automatically stay in it and the offer disappears. There are also cases in which we are interested in a bank but after analyzing our case, the new bank to which we want to move rejects us for being a risk client.

You must be very careful with the links

When we change banks, something that we must bear in mind is that they will always offer us other types of products such as insurance that comes with the package and that in the long run can link us much more than we would not like with the entity. Many banks do not give you the possibility of making a surrogacy with them if you do not opt ​​for these products and some disguise them as a gift, but they are really already included in the price.

Surrogacy or novation, which option is best for you?

Both sound very tempting to many people and it is difficult to know which is the best decision for each case. To know which one suits us best, we must sit down and do an accounting of everything. You should ask for everything related to novation and visit many other entities for surrogacy.