What are the expenses of subrogating a mortgage loan?
In our country, subrogating a mortgage loan has a relatively low cost, when compared to the benefit obtained.
Are you determined to move your mortgage loan to another bank? Congratulations! I assume you already have the evaluation and you know how much money you will save monthly with the transfer. The last step will be to review the expenses of subrogating a mortgage loan.
Mortgage loan with a bank
If you have a mortgage loan with a bank, the procedure will be relatively simple and the costs will be low. By law, in Mexico, it is not necessary to make a new deed or a new mortgage when subrogating the creditor, that is, when changing the bank with which you took the credit. This already means significant savings. The transfer involves making an agreement that is ratified in a notary and legalized before the Public Property Registry. This document indicates the new bank, the rate and the term. This ensures that the mortgage business continues with a new creditor.
Some banks, within their marketing strategies, may be offering to bear that cost. A good credit and transfer broker will know. They know the products of each bank, its benefits and the fine print.
Before signing the new credit application, verify these values. In the cases I know, generally, the equation is in favor of the client. However, I always do the checkup:
= Total value to be saved with the transfer – Expenses to subrogate a mortgage loan
If the value is positive, my recommendation is to continue with the business. Continue with the subrogation request!
If the value is negative, it reflects that you will pay more money than what you will get for the transfer. In that case, don’t do it.
Expenses to subrogate the mortgage
The values that you should take into account are:
- Notary fees : The rights and legal expenses are different in each city. In a notary they will inform you the value to pay. Ask if the bank cancels this value, if it is possible to negotiate it. When it is a subrogation of creditor, the registry has a cost of one thousand pesos; Notary fees have a cost of 4% of the loan value (may change)
- Opening commission: some banks charge and others do not. Always ask about the fees the bank will charge.
- Appraisal: the bank will always charge you the study of the value of the real estate. It doesn’t matter if it’s new, used, or a beautiful colonial house. It is your duty to hire an expert, an impartial person, who values the property. This report is essential to determine the value of the credit and its viability. Each bank has stipulated its price, is between $ 3,500 and $ 4,500 approximately.
- Unemployment insurance : some financial institutions have chosen to apply for this insurance. If you run out of work, which will mean you stop paying your monthly credit fee, the insurance will cover you for a period of time.
As you can see, the cost of the subrogation of the creditor does not seem to be an obstacle to lower the monthly accounts of your mortgage loan. However, it is best to consult with a good advisor to be sure.