How to transfer your mortgage to another bank

The procedures you need to follow to transfer your mortgage to a different bank
When you have a mortgage loan (mortgage) with a bank, it may be interesting to transfer the mortgage to another bank in order to obtain better terms and conditions on your loan, and without having to cancel it or write up a new mortgage contract. This operation is carried out by means of a subrogation of creditor or between banks. That is, the debtor decides to change banks to benefit from a change in the terms and conditions of the operation and/or in the repayment term.
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But how difficult is it to transfer a mortgage to another bank to get a better loan offer? The transfer of a mortgage to another bank is regulated by law and requires the new bank to study the operation, as well as the compliance with the requirements and fees associated to the subrogation.

Procedure for transferring a mortgage to another bank

During this process, the new bank will provide all necessary information to the user and will accompany him/her throughout the transfer process. Firstly, the new bank will study the operation and will check that the requirements for the granting of the mortgage loan are met. If the results of the study are favorable, the new bank will make a binding offer to the debtor, in which the new financial conditions of the new mortgage loan are set forth.

Once the offer has been accepted by the debtor, the new bank shall notify the current bank of its intention to subrogate the mortgage, and it will request the receipt of a certificate, within seven calendar days, stating the outstanding amount due of the mortgage loan.

Once the certificate has been provided, the current bank will have fifteen calendar days to render ineffective the subrogation, that is, arrange with the debtor a modification in the loan conditions to match or improve on the binding offer.

If after 15 days, the current bank does not state its intention to agree on a modification in the mortgage conditions with the debtor, the client may sign the deeds of the mortgage subrogation.

It must also be taken into account that a mortgage subrogation involves costs, including notary, management and registration fees, as well as a subrogation fee, as stipulated in the contract. Likewise, the debtor should obtain advice on any additional costs that may be included in the subrogation, such as cancellation or waiver fees, interest rate risk fees, fees for a new appraisal of the property and Stamp Duty.

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Summary

The transfer of a mortgage to another bank may represent an improvement in the conditions of the operation and/or the repayment term. The debtor must meet the requirements for the granting of the new loan in order for the new bank to present a binding offer to the debtor setting forth the new financial conditions of the mortgage. If the current bank does not match or improve the offer made by the new bank, the subrogation certificate will be signed setting forth the new loan conditions. Finally, the operation includes some fees that shall be paid by the debtor.
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