How to transfer a mortgage to another apartment
You bought an apartment with a mortgage, and now you want to change it to a more spacious and comfortable one. But you do not know where to start and how to do it, because the loan has not yet been repaid. According to numerous requests from readers, the portal apartments will tell you how to transfer a mortgage from one apartment to another.
What the law says
the owner of mortgage housing can replace the original pledge at any time, but this will require the consent of the mortgagee. That is, the presence of debt to the bank does not deprive you of the opportunity to manipulate real estate, whether it is a sale or improvement of housing conditions. On how to sell mortgage housing, we have already written earlier. You also have the right to transfer the mortgage to another apartment. But there are certain nuances here.
The attitude of banks to the transfer of mortgages
Borrowing banks treat requests to transfer the loan to another object mainly negatively due to the long re-registration of documentation and the lack of financial benefits. Meanwhile, if a number of conditions are met, they still allow the client to transfer the mortgage to another apartment. Sometimes for an additional reward.
All costs associated with the re-registration of documentation are paid by the client. The amount of the new loan is negotiated individually and depends on the cost of square meters of housing that you want to purchase.
Under what conditions is it allowed to transfer the loan
What requirements the bank’s credit committee will put forward in each case depends on the institution and on the specifics of the transaction. However, there are the most common conditions, the fulfillment of which increases the chances of transferring the loan to a new facility.
It can be:
Repayment of most of the mortgage debt – from 50% to 75%.
Good credit history. The borrower made payments on time and in full.
Full collateral. The cost of new living space is higher than under the existing contract.
“Cleanliness” of housing. Absence of debts, initiated cases or disputes over housing.
Location. The new apartment is located in the same locality as the one currently on the mortgage.
The bank may refuse to transfer a mortgage loan if it considers the area of location of the property to be unfavorable or with insufficiently developed infrastructure.
Collection of documentation
To transfer a loan from one property to another, you will need to collect a package of documents:
Application with the obligatory indication of the address of the new housing.
Originals and photocopies of passport, work book, military ID (for men).
Certificate of income.
Appraiser’s opinion on 2 real estate objects.
Passport for a mortgage apartment or the original contract concluded with a financial institution when applying for an initial mortgage.
Consent of the guardianship authorities, if the borrowers have minor children.
Features of the transaction
After you have secured the approval of the borrower, you can proceed to the re-registration of the mortgage.
There are three possible ways to carry out the procedure:
Exchange agreement or additional lending. The simplest and most convenient option. A new contract is concluded with the client, in which the amount and the object of the pledge change. In parallel, a new schedule of loan repayments is being drawn up.
New loan. The client applies for a loan and repays the debt with it. After that, the bank concludes a new mortgage agreement with the borrower.
Sale of housing. In this case, 2 contracts of sale are concluded simultaneously, because new housing is purchased and the existing mortgage apartment is sold.
Usually, the exchange procedure is chosen by the bank, which notifies the borrower. The only exception may be the option of selling an apartment in a mortgage and the subsequent purchase of a new one. If there is already a buyer, the bank will easily go to the proposed option.
As you can see, it is possible to transfer a mortgage to another apartment, in principle. But for this, the loyalty of the bank to you as a client is extremely important. On the other hand, if the bank objects, but the change of housing is critically important, it is always possible on the way of sale and subsequent purchase of a new home. True, in this case you need to understand that the whole way of obtaining a loan, starting from collecting documents and obtaining the prior consent of the bank, will have to be re-entered.