What is the mortgage subrogation
Is your mortgage payment too high? Are you looking for a solution that allows you to save money without taking risks? Then find out about the opportunities offered by the mortgage lender. Here is what it is and what are the best proposals.
By subrogation we mean a contract that allows you to transfer your mortgage, or to be more precise the residual debt, to a new bank. The previously activated mortgage is replaced with a new one, which has more convenient repayment terms.
And everything is accomplished without the borrower having to go at any cost. Not only. The starting bank is not called to provide any consent, it only has to accept the subrogation from the destination bank (the new credit institution).
Mortgage loan subrogation: residual debt
But what are the operations that allow the mortgage loan substitute to become operational? The subrogation allows you to transfer your mortgage without having to cancel the previous mortgage.
In the face of numerous advantages, the subrogation also has a non-secondary limit: the entity of the subrogation cannot exceed the residual debt threshold. The other essential aspects of the loan can be modified, from the duration to the rate (both in terms of type and value).
The subrogation is an opportunity that affects both first and second home products. It is necessary to clarify that there are two types of mortgage loan subrogation : bilateral and trilateral.
Bilateral subrogation: what it is
In the first case, the new credit institution, also called surrogate, and the customer (borrower) intervene first. To this is added a subsequent unilateral deed of receipt. From a practical point of view, the subrogation contract is first concluded and then the deed of receipt. This consists of a declaration by the starting bank, which certifies the repayment of the mortgage thanks to the subrogation.
Trilateral subrogation: what it is
With the trilateral subrogation, on the other hand, an act is defined which provides for the participation of three subjects: starting bank, otherwise called surrogate, the new provider (surrogant) and the customer.
The trilateral subrogation takes place thanks to a single notarial deed which includes: the new contract and the receipt relating to the extinction of the starting loan.