Mortgage subrogation? Mortgages are the order of the day, and it is not surprising that we find ourselves in the situation of finding, as buyers, a home for sale and that the seller himself offers us the option of mortgage subrogation.
Mortgage subrogation is an operation that has been carried out for a long time, since when a mortgage is granted, it is normally long-term and the life of the owner changes, so in the end, he decides to sell.
What is mortgage subrogation?
Mortgage subrogation in a sale and purchase transaction consists of changing the owner of the mortgage, that is, the seller who owns the mortgage in his or her name, transmits it to the home buyer.
As is logical, the bank or financial institution must carry out a study on the solvency of the new buyer, as is done when applying for a new mortgage to purchase a home. The bank will decide whether to approve the mortgage subrogation or not.
What expenses does the mortgage subrogation have?
The costs of mortgage subrogation prior to the new Mortgage Law, were considerably less high than the opening of a new mortgage. Since the entry into force of this law, banks no longer charge opening commissions (or they should not) if so, it will not be worth it so much to carry out a subrogation, unless we are very interested in the interest rate at which the mortgage is subject.
Bear in mind that there are very low interest rates which the bank calls “out of market” and does not allow mortgage subrogation because it does not suit them. It is more convenient to do a new calculation.
The normal thing is that the expenses of the subrogation of the mortgage are borne by the seller, since if the buyer obtains a mortgage without subrogating the seller, the seller will have to pay the mortgage cancellation costs as well.
Mortgage subrogation with extension?
Mortgage Subrogation with extension is practically the same for the buyer as the fact that his bank grants him a mortgage. Since in addition to taking the place of the seller of the property paying the fees, it will be extended in time and in debt, unless the amount of money that the homeowner has already paid is available.
The most convenient thing to do is to make an appointment with the bank where the mortgage on the home that interests us is located and that they carry out the study there to find out how it would turn out.
After having all the data on the table decide.