A mortgage is a long-term commitment that is arranged for 20 or 30 years in advance. It may well be that there comes a time when the mortgage needs to be transferred to someone else, or transferred to another property. In addition, you can also transfer your mortgage to another bank, perhaps because it offers you better terms.
Transferring a mortgage to another person
Probably the first thing that comes to mind when you hear mortgage transfer. Whether you’re in a difficult situation, or perhaps splitting up with your partner, transferring your mortgage to another person can be a solution to this awkward situation if for some reason you don’t want to sell the property.
If you decide to transfer your mortgage to someone else, you should know that you need the consent of the bank that granted you the loan and confirmation that whoever takes over the loan will be able to repay it properly. Even so, the bank may not approve the transfer.
Transferring a mortgage to another property
The bank may not approve this option either. The transfer of a mortgage to another property is most often done when you want to vacate the existing property and replace it with another. For example, if you are planning to buy a new home, or if you are getting divorced and are worried that no one will buy the apartment or house mortgaged.
It’s good to know that you don’t have to guarantee only your property, but your parents’ or friends’ home. But they must agree to it.
Did you know that the estimated cost of the new mortgage must be higher than the remaining value of the mortgage and that if the bank approves your application, you will face a new round of paperwork around the mortgage loan?
Transferring your mortgage to another bank
We refer to the last option of mortgage transfer as mortgage refinancing. The right time to do this is when another bank offers you better terms, such as a lower interest rate.