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.
Common reasons for refusal to re-register a Sberbank mortgage
In fact, the process of such re-registration is not at all complicated.
The new owner takes out a mortgage loan, and using these “loan funds” the former debtor closes the mortgage. If you wish, you can even transfer the mortgage to yourself in this way, receiving better interest rates, or for convenience, change the bank. In principle, the result of re-issuing a mortgage to another person does not bring any losses for the bank. But there will be no additional profit for the organization either. Therefore, without serious justification, many organizations do not want to engage in re-registration, because the process itself takes the time of bank employees, and the documents need to be verified.
Of course, it is more profitable to deal with new loans than to re-issue contracts without any additional profit. But if you can justify the need to reissue the mortgage, the bank will most likely make concessions. Especially if the borrower’s financial situation has changed or the “housing issue” is resolved during a divorce.
Today, without any problems, you can re-issue a mortgage to another person in many large banks. For example, Sberbank has recently been very happy with new clients who would like to re-issue a mortgage under new conditions without changing the person in charge. This service is in demand among those who want to transfer all their loans to one organization for ease of payments.
The relationship between the lender and the borrower is regulated by two main legislative acts: the Civil Code of the Russian Federation FZ-102 “On Mortgage”. According to them, replacement of the borrower is permitted if the bank agrees.
The re-registration procedure will not bring benefits to the creditor, but he can accommodate the client halfway if no obstacles arise, and this is the only way to protect the contract from default.
Situations may be different. Mortgage re-registration most often occurs if:
- Divorce.
In the event of a divorce, one of the spouses advocates maintaining the mortgage with the intention of continuing to service the debt. This situation is quite common, and banks, as practice shows, make a positive decision regarding such requests.
- Loss of ability to work.
There may also be a need to continue paying off the mortgage loan if, for example, the main borrower becomes disabled. Relatives of the patient can contact the bank to transfer the loan to another person.
- Moving.
If the client has changed his place of residence, but does not want to sell his home or give it to the bank, and at the same time is unable to properly repay the debt, then he can apply to change the person responsible under the contract.
- Dismissal and loss of solvency.
If the client’s financial situation has sharply worsened and there are no prospects for resolving the situation, in order to preserve property and one’s credit history, the loan can be rewritten, for example, to his spouse.
The person to whom the mortgage will be transferred must meet all the lender's requirements regarding income, employment, financial reputation and completeness of the necessary documents. Only if it passes all checks will the bank agree to such a loan replacement.
The loan can only be transferred to another person with the consent of the mortgagee, i.e. the bank that issued the loan. To approve the transaction, it is necessary to submit an application indicating the objective reasons for the re-registration.
After the lender evaluates all the circumstances, a decision will be made on the application. If a positive verdict is made, the mortgage re-registration procedure begins.
Due to high competition, credit institutions attract existing borrowers from other banks with favorable refinancing conditions.
Today, Sberbank offers the lowest interest rates on lending and refinancing, so the transition procedure is unjustified.
In case of divorce, the re-registration procedure is relevant when the property remains with one spouse, and the other pays the mortgage.
If the applicant provides a divorce certificate and a 2-NDFL certificate, the bank will approve the application.
Each borrower has the opportunity to replace debtors, unless otherwise specified in the mortgage agreement. Re-registration is possible while maintaining the loan term.
The owner of the apartment can reissue the mortgage to a co-borrower. In most cases, they are the spouse of the person taking out the home loan. It is important that the future payer meets the bank’s requirements:
- age – from 21 years;
- work experience – from 6 months, total work experience – over 1 year;
- official income meets the bank's conditions and is confirmed.
There are no special profitable lending programs; the transition is carried out on general terms.
It is also possible to re-issue a mortgage for a husband and wife, but provided there is no prenuptial agreement. In some cases, one of the spouses buys out the debt of the other and registers the property in their name.
Renewal of a mortgage loan for a child is possible only if he has reached 18 years of age, meets the age limit and has an officially confirmed income level with the required work experience.
The law does not prohibit re-issuing a housing loan to third parties, the main thing is that they meet the requirements of the credit institution.
To transfer a mortgage to another person, you must go through all the stages, from submitting an application to transferring ownership of the apartment.
You can fill out an application to re-issue a mortgage to another person only at the bank branch where the loan was issued. When drawing up an appeal, special attention should be paid to the reasons for the transfer of debt obligations and rights to real estate.
After completing the application, the lender must provide the following documents to the future borrower:
- Passport.
- INN, SNILS, military ID, international passport.
- A copy of the work book.
- Certificate in the form of a bank or 2-NDFL (for 6 months).
- Certificates of marriage/divorce and birth of children.
When contacting the bank, the current owner of the property needs to have with him a passport, an application for renewal and a mortgage contract.
After submitting all the necessary documents, the application is submitted to the assessment department for consideration. The organization carefully studies the specified data, comparing them with the requirements of the bank.
In addition to the general criteria, the applicant requires: a good credit history without arrears, high income and Russian citizenship.
The consent of the creditor bank can be obtained only if all established requirements are met.
Application processing time is 1-5 days. The bank can delay making a decision only if false information is provided, income is overstated, or the borrower is blacklisted.
After approval, the date for signing the document is agreed upon with the borrower and the new payer. The previous owner of the apartment fills out an application for full early repayment using the funds received, and the new borrower applies for a loan.
Then a purchase and sale agreement is concluded with the registration of a mortgage, and ownership rights are re-registered at the Registration Chamber.
Re-registration is the right of Sberbank, therefore no one can oblige the creditor to change the terms of the agreement by transferring the debt to another person.
We invite you to read: How, where and to whom to complain about the bank?
Restrictions on re-registration:
- If the mortgage was issued under the Young Family preferential program, then the new borrower must meet all its requirements.
- It will not be possible to re-issue a loan if there is arrears on utility bills.
- If during the procedure the debtor stops paying according to schedule, the bank reserves the right to refuse re-registration.
The main reasons for refusal to re-register:
- Having a criminal record and administrative offenses.
- Credit history does not meet bank requirements.
- High financial burden associated with a large number of open loans.
- Questionable information about the future borrower (compromising photos on social networks, bad reviews from the employer, etc.)
- Lack of documents confirming the applicant’s income and employment.
- Inappropriate behavior when filing an application.
- The income indicated in the certificate is not confirmed.
- The future payer is a defendant in the FSSP case.
- The company for which the applicant works has a dubious reputation.
- The relatives of the future borrower have open debts on credit loans.
The bank reserves the legal right to refuse to reissue a mortgage loan; in this case, the future borrower can contact another credit institution and apply for a consumer loan.
If the decision is positive, the funds are transferred to the account of the apartment owner to pay off the debt and remove the encumbrance.
Sometimes a situation arises that the borrower has decided to improve his living conditions and purchase a larger property, or donate or sell an apartment that is under encumbrance. At the same time, he has other real estate that can become a new subject of mortgage; he can try this option, such as re-registering the mortgage with a new collateral, in this case:
- the borrower initiates an appraisal of the new mortgaged property. The cost of the new property must exceed 80-85% of the existing mortgage;
- a set of documents on the new pledge is submitted to the bank for consideration;
- if the credit institution agrees to transfer the encumbrance from one property to another, a new loan agreement is concluded for the remaining amount of the mortgage;
- the encumbrance on the first property is removed and “transferred” to the second property;
- old real estate can be realized - sold or donated.
Is it possible to re-issue a mortgage at Sberbank to another person?
A mortgage of arbitrary content is transferred to a third party. According to the mortgage, a third party has the right to the living space. This phenomenon is not very common, since in this case it is necessary to completely re-register the mortgage to another person. Banks approve such a procedure with great reluctance. A mortgage can be sold to a third party under the following circumstances:
- the borrower becomes disabled for various reasons, including medical ones;
- the borrower changes his place of residence for good reasons;
- the borrower filed for divorce.
As practice shows, loans are sold mainly when the borrower inherits an apartment. In any case, in order to reissue a loan, you must contact the services of a qualified lawyer.
