All the questions you should ask yourself before moving a mortgage loan
Seriously, have you ever wondered if it is possible to pay less money for your mortgage loan? I congratulate you. Many people do not. It is as if they believed that, once the mortgage loan was signed, the business could not be modified.
My recommendation is simple: From time to time, it is important to analyze whether or not to request a transfer of the mortgage loan. I have a simple guide that can help you, I detail it below:
Write a reminder on your calendar
Does it sound silly? No, it is not. Carlos, a client, scheduled his agenda so that every June 15 until 2027 he reminded him of this task: “Compare the conditions of the mortgage loan and verify if I am doing a good business”. It is likely that for a couple of years my recommendation is that your loan is in good shape.
And, it is likely that at some point I will inform you that the scenario has new perspectives and it is worth reviewing the figures. Let’s keep going.
What has changed in the country, in the city?
The economic conditions of the country, of the place where you have your home bought with the credit, are affecting your business.
It is true. It is not necessary to be an expert economist, but it is necessary to listen. The law of supply and demand may be causing interesting changes in the financial sector, which you could take advantage of.
What has changed in your life?
Quickly, we evaluate your conditions. Change of work, salary, marital status. Have your income improved? I ask because maybe your risk profile is better now and you could get another rating at the bank. That could affect the rate. Let’s keep going.
What is your rate?
I am always aware of the news that affects interest rates. Perhaps, the Central Bank lowered rates to incentivize loans and higher consumption. It would be a good time to study a transfer! We are probably talking about a lot of money. Of course, this is only the yellow, alarm signal, which asks to continue investigating further.
What does a transfer imply?
Good question. A mortgage transfer also involves paperwork and expenses. Many clients resent presenting the documentation requested by the bank. It seems to me that, for a good opportunity, it is worth gathering the papers and spending the necessary time.
The crucial issue is the value of the expenses of the transfer . Suppose, in effect, there is a bank that offers a better rate. The bank is willing to pay the other bank the total amount you owe and start a new business. That is, it is necessary to cancel that mortgage and open a new one. This legal process has an important cost that you need to know before signing the new business.
How much do you earn if you transfer the loan to another bank?
Before accepting, let’s review the credit conditions they offer you. Keep the focus on this: the idea is to earn money, saving on monthly fees.
Let’s compare the rates. They must have the same conditions. What expenses and commissions do both banks include in their rates – specifically in the Annual Effective Cost Rate, TCEA-? Are all risks and deductions insurance included? Remember that you will always have to take out both insurances and you can do it with the bank or on your own. Are you clear about the value of insurance? Click here to read a brief explanation of credit rates: the TEA and the TCEA.
Look at other conditions It is very important to verify that the amount approved by the bank that accepts the transfer is equal to what you owe; that the agreed date for the payment of the installments is the one that suits you and that the new bank authorizes, without any cost, to make additional payments (amortizations). And finally, be sure that the bank is presenting all, all, the expenses.
How much will you earn?
We are ready to do the accounts. Add the expenses of the transfer: how much you will have to pay for notarial and registration expenses, how much for the bank transaction tax and bank expenses. Suppose this value is X.
Now, determine the savings you would achieve with a better rate . If at the end of the loan, this savings is greater than X, good news! You will earn money with the loan transfer.