Wednesday, October 28, 2020
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Differences between re-mortgage or expand housing

It is important to know the details of each of the methods before deciding to change banks with the mortgage. Of course, they can entail certain risks and additional costs in our mortgage that we must shuffle previously.

These methods are two: re-mortgage or expand housing. Both operations aim to change banks with the mortgage; but there are important differences between them.

Subrogation

Subrogation

In the first case, changing the bank with the mortgage with a subrogation refers to the transfer of our loan from one bank to another. Basically, this method pushes us to renegotiate our conditions with the other bank we are moving to. The subrogation includes certain expenses such as:

  • Subrogation Commission

  • Notary costs when changing banks

  • Registration and agency fees

  • Appraisal costs

Cancellation

Regarding the cancellation to change banks with the mortgage, it is the process of closing our current credit and opening a new one with the bank to which we migrate. This operation carries high costs such as:

  • Cancellation fee

  • Notary costs

  • Registration and agency fees

  • Appraisal

  • Tax of Documented Legal Acts that we must pay to the Treasury

When is it convenient to do one or the other?

When is it convenient to do one or the other?

It is clear that subrogation is a much cheaper action than the cancellation of the mortgage loan. The main difference is that when we subrogate our house we will not have to pay again the Tax of Documented Legal Acts that we pay when signing the first time our loan. It is a fact to consider when changing banks with mortgages and deciding on one method or another.

If you are looking for a modification in the contract of your home you can cancel the current one, assuming all its costs. But if what you want is to improve your conditions you can subrogate the home you already have, everything is to negotiate with the new bank.

Anyway, when hiring a loan to buy a house, it is important to negotiate good conditions with the bank; In this way we know all the details in case one day we decide to cancel or subrogate our mortgage.

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