Pravozhil.com > Mortgage > How can I transfer a mortgage to another bank?
A mortgage loan is a burden for any family. The main difficulty is interest rates, which are still higher than in other countries.
Sometimes the question arises of how to transfer a mortgage to another bank. For example, when a client took out a mortgage at one interest rate, but after some time another financial institution appeared that offers better conditions. We will tell you how to carry out the translation in the material.
The main reasons to transfer your mortgage to another bank
What might you need to transfer your mortgage to another bank?
Due to the fact that the loan market in our country is not stable, since the ruble exchange rate changes periodically, the economic well-being of citizens falls, so mortgage lending contains many financial risks.
For example, a year ago a family earned a decent amount of money, but a few months later, due to the decline of the economy, income dropped sharply. But this situation does not exempt her from paying mandatory payments. Besides this, there are other situations.
Therefore, before you begin the process of transferring a loan from one credit institution to another, you need to consider the main reasons why this happens.
- Difficult financial situation. Typically, people who have lost part of their income due to inflation or have lost their jobs tend to find a bank with a lower interest rate.
- Mortgage lending conditions. Despite the established business practices in mortgage lending, there are banks that distribute these loans under strict conditions. Such agreements may have hidden fees, commissions and other costs. Even for insurance. Therefore, citizens are trying to find banks with the best contractual conditions, and if they exist, they transfer their mortgage obligations to them.
These are the main reasons why people begin the legal process of transferring their mortgage obligations from one bank to another.
It is important to remember that some banking institutions try to explain to their clients that this process is impossible and they will not give their permission. But this is a hoax; financial institutions are simply trying to retain solvent clients.
What it is
What does it mean to re-register a mortgage on a house or apartment to another bank? A person receives a loan from another organization and, with the help of these funds, pays off the mortgage in the first one. As a result, he becomes a client of a new bank that offers more favorable conditions.
It is beneficial for the bank you want to switch to to get a new client. If the citizen meets the conditions, then refinancing the mortgage is not difficult. The company in which you are a borrower cannot interfere with this, which must be taken into account without fear of starting to cooperate with a new organization.
However, if the agreement states that you cannot repay the loan early, then switching to another bank is impossible. Many banks began to reinsure themselves and stipulate this in their contracts. If you pay off your mortgage early, the bank loses income because interest accrues every year. The sooner you pay off your mortgage, the less income the organization will receive.
You must be prepared for the fact that in the future this credit institution will not allow you to take out another loan - a car loan, a mortgage or a consumer loan. This is due to the fact that banks do not like early repayment of loans. It’s easier for them to play it safe and not cooperate with you again. If you decide to refinance the loan, you must be prepared for the fact that you will not remain friends with this bank. Consider whether it really pays to switch to a different mortgage lender.
Mortgage transfer procedure
How to refinance?
The procedure for transferring a mortgage begins when a bank is found that is ready to take over it. Only after this can the process begin.
It will happen as follows.
First, the borrower collects all the necessary documents (his solvency, documentation for the property), and goes with them to a banking institution that is ready to provide a new loan.
In addition, you need to remember to take a certificate from another bank confirming that there is no debt on all mandatory payments.
Refinancing and tax refund: life hack for borrowers
If you do not want to lose the opportunity to recover overpaid income taxes on mortgage payments, carefully read the refinancing agreement. The opportunity to receive a tax deduction remains if the purpose of lending remains to pay for the purchase of living space. This must be specified in the new loan agreement.
Sometimes the refinancing agreement stipulates that money is allocated to repay a previously taken loan obligation. Such expenditure of funds is not suitable for filing a tax deduction. Therefore, before submitting your application, read the text of the new mortgage agreement.
Typically, banks provide refinancing services to Russian citizens, but VTB, Raiffeisenbank, and Alfa-Bank allow citizens of any country to apply for a loan.
To receive a positive decision on your application, you must meet the following requirements:
- age at the time of application - from 21 years (at UBRD - from 23 years), and at the planned date of closing the loan - no more than 65 years (at Sberbank - 75 years, at UBRD - 70 years);
- availability of official employment and income that allows you to repay the loan on time;
- work experience at the current place - from six months (at UBRD - from 3 months);
- total experience - from one year.
We invite you to read: The court legalized annuity payments on mortgages
Is it possible to transfer a loan from one bank to another bank?
easy, this is now handled with mortgages, when one bank sells a mortgage to another
you can take out another loan and pay off the first one, so the loan will be transferred to another bank)) (or maybe something else is possible, I’m not a banker)
It's called refinancing. This is when you take out a loan from a bank and repay the loan in another bank with this money, the security for the loan is also transferred to another bank
Yes, it's really possible and it's really called refinancing. Let's say you want to transfer a loan from Bank1 to Bank2. You apply to Bank2 with a full package of documents, as if you were applying for a new loan (and you can ask for a larger loan amount than the balance of debt with Bank1, if the collateral allows it). You can also get a refinanced loan in a currency different from the currency in which you have the loan. In general, there are many options... From Bank1 you will definitely be asked to provide a certificate about the balance of debt and the status of debt servicing. If you have had numerous or long delays in repayment, then Bank2 will not refinance you. Let's say Bank2 is happy with everything and decides to refinance you. Then all transactions must occur on one day, in the following sequence: - Bank2 issues you a loan either in cash or by transferring funds to repay the loan to Bank1 - If in cash, then you take the money to Bank1 and repay the loan. If it is a transfer, they come and the loan is repaid. — Bank1 removes all arrests from the mortgaged property (If real estate is from the state register of mortgages, if movable property is from the state register of encumbrances of movable property). It is possible and most likely (especially in the case of real estate) to do this you will have to contact the notary who imposed the arrest. — As soon as the property becomes free from prohibitions, you draw up a pledge (or mortgage) agreement for it with the Bank2. — If you asked Bank2 for a loan amount greater than what is needed for repayment to Bank1, then only after registration of a collateral (mortgage) will Bank2 give you the remaining loan amount.
First option: You can take out a loan from another bank and repay the first one. The second option is when the Bank itself sells your loan to another bank (but as a rule, not only your loan is sold there, but an entire loan portfolio) and no one will ask for your consent
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A mortgage is not a death sentence: we learn how to reissue a mortgage correctly
Replacement of collateral on an existing mortgage loan. For example, a client wants to sell or donate his apartment, encumbered with a mortgage. If this borrower has another apartment that covers the existing loan according to the terms of the product, and this is on average 80-85% of the market value of the apartment, then the borrower can submit an application to the bank to change the collateral within the framework of the issued mortgage loan. The client must indicate the reason for replacing the collateral, and in most cases the bank will accommodate its borrowers halfway.
Processing multiple mortgage loans. Let's consider a real-life example: a borrower bought a 1-room apartment with a mortgage, but after a few years his financial condition improved, his family grew, and the need arose to buy a 2-room apartment, as well as the opportunity to increase the loan amount.
I always advise, especially young families, not to take out a mortgage for a 3-room apartment - as clients say, “for the rest of your life.” If a person cannot afford to pay the loan, then his life turns into a nightmare, and as a result, the borrower may lose his apartment altogether and remain on the street. It’s better to achieve your goal - to acquire your own living space, to go gradually, based on a comfortable loan payment. Thus, I advise you to first take out a mortgage for a 1-room apartment, then a 2-room apartment, etc.
The sale of apartments with a bank encumbrance is commonplace today; their market share is growing every day. What should the borrower do if such an apartment is sold?
1. First of all, you need to apply to the bank for a new loan. A number of banks allow you to take out up to 4 mortgages at the same time with the appropriate income, the exception is AHML, where only one mortgage is possible for a given borrower. If the client’s income does not allow him to take out a second mortgage, then it is necessary to submit an application with a suspensive condition, i.e. the loan will be available upon repayment of the first mortgage.
2. Only after a positive decision on a new loan can you start looking for a buyer for your 1-room apartment.
It is this sequence that is important. If the borrower has been in arrears on an existing mortgage loan or has taken out various consumer loans, he may be denied a new mortgage loan altogether.
Next comes the search for a buyer for his apartment: this can be a buyer with cash or a mortgage. The schemes for such transactions on the market have been worked out and polished over years of practice, and we have been working with them on the market for more than 6 years. If the buyer pays in cash, everything is simple and clear: the loan on our borrower’s apartment is fully repaid. Next, our client, having selected a new home, goes to the bank, where his loan application has already been reviewed, and takes out a new mortgage.
The situation is somewhat more complicated when the buyer has a mortgage. There can be two options: a mortgage is considered in another bank, and a mortgage is considered in the bank where this apartment is pledged. In the first case, the sale can only be carried out through full early repayment, i.e. The buyer's down payment must be no less than our borrower's available loan. In the second case, this is not necessary - our borrower’s loan is repaid by the buyer’s loan taken from the same bank.
I would like to note that if the client left with a suspensive condition, then he can take out a new loan after repaying the existing one. Loan issuance/loan repayment is carried out after registration of ownership after seven days. Thus, the client can take out a new mortgage loan only in a week. If the loan approval was without a condition precedent or the loan of the buyer of our borrower’s apartment was transferred to repay his loan according to Rosreest’s receipt, then the registration of a new mortgage loan and the purchase of a new apartment can be made simultaneously.
Refinancing is a transition from a high interest rate in one bank to a more favorable rate in another bank. Consider a situation where you took out a mortgage loan at a high interest rate from a certain bank, and after some time other banks on the market offered more interesting interest rates. Is it possible to re-issue a mortgage at a lower rate in another bank? A very relevant situation today.
We see that in today's crisis conditions, interest rates on mortgage loans are soaring, and real estate, especially in the secondary housing market, is falling in price. I always recommend not to be afraid to take out a mortgage at a high rate, because... Many banks have a product called refinancing, or, as it is also called, refinancing. Today there is no moratorium on any banking product - you can re-issue a mortgage at any time in another bank. Banks do not refinance their own portfolio, so this is only possible by moving to another bank.
I want to give advice that bankers, of course, will keep silent about. It is profitable to refinance in the first half of the loan term, when you pay almost only interest on the loan. In the second half of the payment period, it is not profitable to refinance, even at a very low interest rate. Because You have already paid off most of the interest and are actively moving towards paying off the loan balance. When you switch to another bank, you again begin payments with interest payments. If you get too carried away with this process, constantly looking for a lower mortgage interest rate, you can only pay interest to banks without ever getting to repay the loan itself.
It is best to contact specialists who will tell you whether it is profitable for you to refinance today or not. I can add that in a crisis this product does not work.
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how to transfer a mortgage from one bank to another
Sometimes there may be a need to transfer the issued mortgage to another bank. Before doing this, you need to carefully read all the advantages and disadvantages of this procedure.
What reasons could there be for transferring debt to another bank?
Most often, people think about refinancing when programs with more favorable conditions than under the current agreement appear on the market. Since a mortgage is a long-term loan, many attractive loans may appear over a long period of time. Banks are willing to lend to clients of other financial institutions, especially if they are confident in the consumer’s solvency.
Refinancing may also be necessary if the borrower’s financial situation worsens. By increasing the loan term, it is possible to reduce the payment amount. The current creditor does not always agree to restructuring, and therefore you can turn to another creditor. However, it is important to apply for and receive a loan before you become delinquent. Banks are not very willing to cooperate with clients who have poor CI.
Sometimes you can use refinancing (increasing the amount) to obtain additional loan funds for any needs.
In what cases is it beneficial to refinance?
It is worth transferring debt to another credit institution only if the rate under the new program is 2 percent or more less.
Be aware of the costs when refinancing a mortgage - appraiser fees, insurance payments, commissions and others. Therefore, future benefits must be weighed against costs. Perhaps it is better not to refinance.
Required documents
The procedure is exactly the same as getting a regular mortgage loan. They check the client again and demand the same documents.
Study the requirements for consumers and purchased housing in the new bank. They may differ from the previous ones. All documents must be collected again.
In what cases is translation possible?
Stages of registration
Mortgage note is a paper containing information about the loan and confirming the rights of the mortgagor. When refinancing, this document is transferred. An endorsement is placed on it, after which the money is transferred. The property pledged to the current lender is transferred as collateral to the new one.
Order
Submitting an application to the bank. The best offers are presented at this link.
You can calculate your loan here:
Today, the following banks are in greatest demand for refinancing: VTB 24, Rosselkhozbank, Rosbank, MDM Bank, Sberbank.
There is no need to ask permission from the current creditor to transfer the debt to another bank. You can only warn him of your intention, and in order not to lose a client, he can propose restructuring; we will tell you more about this procedure in this article.
- Collection of documents on the property.
- Conducting an apartment assessment.
- Signing a new loan agreement.
- Transfer money to the old bank.
- Removal of the encumbrance (collateral) from the previous creditor.
- Registration of collateral in a new financial institution.
It is worth clarifying in advance the amount of debt to be transferred.
If you want to know how to get a loan without refusal? Then follow this link. If you have a bad credit history and banks refuse you, then you definitely need to read this article. If you just want to get a loan on favorable terms, then click here. If you want to apply for a credit card, then follow this link. Find other posts on this topic here.
