It is necessary to evaluate the costs of each mortgage debt transfer. So always, it is justified to renegotiate. It is likely that this is also your case.
Yesterday, I received a very curious query. One client asked if the transfer of a mortgage loan from one bank to another would be at some cost. I answered yes, the portfolio sale would generate charges and briefly explained. He thanked me, indicating that, in that case, he would not be interested and closed the chat. Too bad, I thought, if we had done the full accounts, it might have been possible to lower your monthly fee.
At night, still annoyed at not having done a full advice, I imagined that, perhaps, the Lord was already close to finishing the payment of the debt and, therefore, apparently, it was not attractive to add new expenses. Because, in any other circumstance, my advice would have been to assess the situation.
How does a mortgage debt transfer work?
To transfer a mortgage loan from one bank to another, is to ask a financial institution to buy the debt that a customer has with a bank, pay it and grant a new mortgage loan on the same property. This generates expenses, which, of course, the customer must cancel. In return, you will receive a benefit: improve credit conditions, ie, a better rate, a better term or a more comfortable monthly fee.
As usual in these cases, it is necessary to review all the factors very well. The first, the customer’s need and the second, the bank’s offer.
Normally, a client thinks about a mortgage debt transfer when there is a significant change in their life: a new job, a different income or a new need. The interest is to continue with the credit and the property, but under new conditions. A good advisor will design a strategy to achieve the goal. And not only that: he will check the accounts to verify that they are downgraded! Let’s see.
Study of credit and study of titles
Suppose you took a loan with the bank “A”. And, now, you could transfer it to bank “B”. The operation requires start from scratch in bank “B”.
That is, you must submit all documentation for the study of credit and property titles for the law firm. You will be asked for proof of payment of the fees, the business schedule with the bank, the deeds and the income support of the people who will take the new credit. You can find here the requirements for a mortgage loan transfer.
The monthly fee
The core business is the monthly fee. What will be the total total value of the mortgage loan expenses? You need to compare alternatives bank “A” and bank “B” with the same parameters: what rate and what term value of the monthly fee, including commissions and / or administrative costs and value of comprehensive insurance and insurance of relief (or of life). The result of this exercise should be a clear advantage of the transfer of mortgage debt to the “B” bank and the fulfillment of the client’s objective.
It is a mandatory process. The transfer of a mortgage debt implies the cancellation of the mortgage and the opening of a new one. I explain myself better: to a notary and before Sunarp, the end of the mortgage with the bank “A” must be notified, since the debt has already been canceled by the bank “B”; and, immediately, the bank “B” request the new mortgage of the good in its favor. The value of the deed procedures must be canceled before the notary, in each district it is different, and the registration of both news before the Sunarp.
Remember that the loan disbursement is affected by the Financial Transaction Tax (ITF), equivalent to 0.005% of the value of each transaction.
By knowing these four items, you can decide with certainty whether or not to transfer mortgage debt. For example, if the decrease is so low that the monthly fee savings do not compensate for legal expenses, it is preferable not to transfer the credit. But if, as in most cases, the amount of savings every month of the monthly fee exceeds legal fees, the study of credit and the ITF then call you and have to give and the good news.