Mortgage refinancing: how does it work?

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A mortgage refinancing means changing the conditions of a loan by canceling and contracting a new mortgage , making a subrogation or a novation. But, it is not as simple as wanting it, you will have to submit the application to the bank and negotiate. Today we will give you the keys to successfully refinance your mortgage.


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Mortgage refinancing: how do I get it?
There are three ways to refinance your mortgage and improve the Chinese Overseas America Number Data conditions: novation, mortgage subrogation and taking out a new mortgage. Each of them has its risks and advantages. But before we get into that, let's see what points of your contract you can change:

Capital increase. Refinancing to increase capital is a fairly frequent request to be able to carry out comprehensive renovations of the property, new investments, pay off debts, etc. But the risks are high and your fee and interest will increase. In addition, entities are quite reluctant to accept this type of agreement, since the risk of non-payment is high, especially if it is to settle debts.
Increase the amortization period. It is also common to request an increase in the repayment period; this is done to achieve a lower monthly payment, although in the end you will pay more interest by extending the debt.
Reduce the amortization period. You may also be interested in reducing the term, you may now be able to pay more per month and you prefer to pay off the debt sooner or, well, you want to pay part of the debt and prefer to reduce the years.
Type of interest. You can also refinance to change the interest rate. Currently, variable mortgages are booming due to the historic lows of the Euribor, and many people have been interested in switching from a fixed interest rate to a variable one.
Contract clauses: linked products, cancellation clauses, etc.
Change of owner: You can request a change of the owner of the mortgage contract.



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Refinance with a subrogation
A subrogation is a change in the conditions of the mortgage and the financial institution. The steps to follow are the following:

Search and compare. The first thing of all will be to know which bank you want to switch to, to do this it is best to inform yourself and compare products.
Get an offer. Once you know where you want to have a new mortgage, you will have to present the documentation for a feasibility study to be done. When you get an offer that interests you, you can move on to the next phase of the process.
Offer and counteroffer. Once you have a binding offer, you will have to present it to your current entity. Your current bank will have seven days to send you a certificate of outstanding debt and, from that day, you will have 15 calendar days to make a counteroffer. In the event that they do not send it or the conditions of your loan do not improve, you can now accept the new offer with the bank.
Sign the new mortgage. In the event that your current bank makes you an offer, you will have to choose between staying and making a novation or continuing with the subrogation procedures.
In the process of changing your mortgage bank , you will have to pay the subrogation costs corresponding to the new entity and, possibly, the cancellation fee of your current bank, which can be up to 2% of your outstanding debt. The commission is not mandatory, but it is frequent, so it is important to read all the clauses of the contract to avoid surprises.

Mortgage refinancing through a mortgage novation
A novation consists of improving the conditions of your mortgage without changing banks. This is the most economical option, since it does not require as many expenses by staying in the same entity, but it is more complicated for your bank to simply accept better conditions.

The expenses of a mortgage novation are as follows:

Novation commission. You may have this clause in the contract, but the fee should not be more than 0.3% of your outstanding debt.
Notary fees. You will have to pay half of the expenses, the other is covered by the entity.
Management. Around €100-€150.
Appraisal . It is usually around €250-€300.