The first home loan subrogation is your chance to change your mind. That is, switch to another bank that offers you terms of mortgage subrogation at no extra cost and better terms.
If you already know what the subrogation is, you’ve probably already read something about it.
However, there are risk factors that you need to consider, and that I want to tell you based on my experience.
A premise on the subrogation of the loan
Many people find themselves transferring their mortgage by subrogation, because they are affected by the proposals of banks that offer a lower TAN. Unfortunately, they underestimate the impact commissions can have. Being convinced by the new proposal, even if the installment is higher, can happen to everyone.
After a few years, it is easy to realize that, until that time, you only repaid part of the interest on the new mortgage.
Do you find yourself, by chance, in this situation?
What you will learn in this post will let you know how to move with the banks immediately, to get the subrogation and save time and money.
Are you ready for this journey together? It begins!
First house mortgage loan: what are the 3 most important risk factors
Start from the awareness that extending the duration of the loan allows you to obtain installments with lower amounts. Similarly, if you reduce the duration of the loan, you can save on the interest rate. So, you need to be able to:
- accurately verify the conditions and costs of the loan (rate, expenses, installments, residual duration and capital) and think about what benefits you prefer to obtain. Lower rates? Savings on interest? Repayment flexibility? Additional liquidity? Etc.;
- compare a good number of alternative mortgage offers from other banks, in order to identify those that can offer better conditions;
- if possible, take advantage of the assistance and advice of an independent professional operator , to investigate the various aspects of the proposals.
Risk 1: do not verify, before the subrogation, the current conditions of the loan
All previous and new conditions must be evaluated to achieve an effective cost saving.
In summary, the parameters to consider are:
- the type of rate (if you keep the same type, change it from fixed to variable and vice versa);
- the rate measure also called TAN stands for nominal annual rate and indicates only the amount of interest due on a loan, without considering the expenses that can be many and different;
- you need to look at the cd more. TAEG (Annual Effective Rate) able to indicate the total cost of the loan, including all the expenses incurred;
- the duration of the loan (deciding to extend it so as to reduce the weight of the installment or shorten it in order to reduce the repayment plan and the cost of interest);
- the spread applied (today lower than that of previous mortgages);
- the only limit of the subrogation (if granted to new and more advantageous conditions), is not being able to modify the borrowed sum, if one wants to operate, with additional financing.
If you need additional liquidity, the solution is that of a replacement loan. Or, you can add a second loan to the subrogation.
Risk 2: subrogation of the loan by asking only a bank
Compared to years ago, the degree of information and awareness of people has increased. Thanks to new information systems, such as the Internet, finding information and clarifying initial doubts is immediate and positive.
Also remember that:
- all the major banks have a website where they advertise their products and their conditions;
- any bank is obliged to provide all general information on its website.
Risk 3: do not contact an independent professional operator
The mortgage is like a tailored suit, it must be managed and tailored to the needs of each person.
All the changes to be made to the previous situation must be verified in relation to each specific case. It is not to be taken for granted that, considering pros and cons, it is better to go ahead with the old mortgage.
Precisely for these reasons:
- One cannot ignore going to the branch in person, to expose one’s own needs.
- It is advisable, after having learned the various information of the case, to contact your trusted advisor and always ask for a second opinion from another consultant.
- Consider that the banks will always offer you favorable conditions, first of all, to themselves.
The subrogation of the first home loan is a useful tool that you should take advantage
Never take anything for granted, carefully evaluate what the banks are proposing to you. Contact me if you are considering subrogating your mortgage , we can talk about it together, consider all risk factors and make the right decision for you.