How to assign a mortgage loan?

When it comes to financing our dreams and hopes of owning a home, many Colombians turn to mortgage loans: An alternative that helps us meet that goal of having our own home, this loan is, in a few words, a long-term loan in which you pay monthly installations and the property remains as collateral.

However, did you know that you can assign this type of credit? What are the possibilities or options you have for it? In Saber Más, Ser Más, we tell you everything you need to consider about the assignment of mortgage loans.

The ABC of mortgage loans

Before getting into the matter, you should know that mortgage loans are loans backed or based on a mortgage guarantee; This means that if the debtor could not pay the installments, the creditor could end up keeping the mortgaged asset – which is usually home. 

The preceding then represents that the credit is directed to the acquisition of housing; Learn More, Be More reminds you that the maximum limit that you as a consumer can access (if you take out a mortgage loan) will be the total value of the property. 

No financial or banking entity can grant you a credit for an amount more significant than the property you want to acquire. For example, if the home is valued at 150 minimum wages, the credit may not exceed that amount, but less.

So let’s review what you can do when you acquire a mortgage loan:

  •      You can expand or remodel by getting the money you need to bring the project you have in mind with your current home. According to the cadastral appraisal, some banks can lend or grant loans of about 50% of the value of the property.
  •      You can earn liquidity because you get cash. With the capital, you can make a significant or essential expense. Of course, always keep in mind to evaluate this option well before doing it, because, after all, the house is a guarantee.
  •      You can buy a home, this is the best-known alternative, and it helps you to acquire a home, whether new or used, in which the property is put as collateral and the installments are paid to the bank until the moment it is entirely owned by the person who pays these fees. To access a new home, consider the subsidy programs offered by the government through compensation funds.

How to assign a mortgage loan?

With the above information, you must now be wondering: Is it possible to assign a mortgage loan? Well, the assignment of a mortgage loan can be done through a process known as subrogation from individual to individual, where ownership is transferred from one debtor to another without the obligation that was initially acquired being modified or extinguished. Completely. 

Keep in mind that, to carry out this process, prior authorization is required from the financial or banking institution, this may be subject to the following conditions:

  • That a study is made of the new debtor’s ability to pay to ensure that it can meet the obligation and thus mitigate the credit risk.
  • The debt documents or promissory notes are signed, and the mortgage is constituted.

And although, although the transfer figure exists, it is more usual for the bank to process a new credit instead of replacing the debtor. So, what happens in the scenario in which a new credit is processed? In this case, the debtor’s financial obligation: Is extinguished with the resources disbursed as a product of the new mortgage. Likewise, the new loan may have different terms, amounts, and interest rates. The same payment capacity and approval studies must be completed as a direct mortgage loan for its origin.