Mortgage loan assignment – How to transfer a mortgage to another person?
Assignment of a mortgage is nothing else than rewriting the mortgage to another person. By entering into a mortgage contract with your spouse or partner or partner, you join the debt together.
This means that no matter what relationship you have in the future, this commitment must be repaid by all people who joined the loan.
When granting a loan on these specific terms, the bank took into account your joint financial standing and credit history. This means that if you took this loan alone, you would probably get different, perhaps worse, conditions.
When is it possible to transfer the mortgage to another person?
The transfer of the mortgage to another person usually takes place in the event of borrowers’ breakup. It is irrelevant for the bank whether you are divorced and thus your property community has ceased or you have just ended a partnership. Regardless of the situation, you are obliged to pay back the loan on time and the joint debts are not broken down.
In a situation where it is not possible to repay the loan jointly (e.g. when one of the parties moved out of the joint apartment and the other retained the property), then an assignment may be made. However, for this operation to be feasible, both borrowers must agree to it, and the person to whom the mortgage will be assigned must have adequate creditworthiness.
Before agreeing to make an assignment, the bank thoroughly examines the ability and history of the person who will be in debt, as is the case when entering into a new contract.
In what situations is it worth to assign a mortgage?
Assignment of a mortgage contract is undoubtedly a good solution in the event of a divorce, when the spouses have children together and do not want to sell their apartment.
Then, if you want to give children peace and not expose them to unnecessary changes in the environment, you can make it seem that the situation will not change.
In addition, the assignment gives former partners a lot of freedom, because a person who has left the joint property can take a new mortgage and start living elsewhere.
How to transfer a mortgage to another person?
You will probably learn about how to transfer a mortgage to another person on the website of the bank that granted you the loan or by contacting a service representative by phone.
Nevertheless, regardless of what rules your lender has adopted, the procedure will be very similar in each case.
Step 1. Borrowers’ mutual consent
In order to start the loan assignment procedure, the bank needs the consent of all borrowers. In practice, this means that if one of the parties does not agree to the assignment, the bank will not rewrite the loan.
Step 2. Bank approval
After receiving the application, the bank must agree to make any assignment.
Step 3 Creditworthiness test
If the bank responds positively to the assignment, the creditworthiness of the person to whom the loan is to be assigned will be examined again.
Good to know
If you want to increase your creditworthiness, you should think about overpaying your mortgage or joining a new co-borrower (e.g. one parent or someone from a sibling).
Step 4. Signing the annex
After positive verification, the annex is signed and the entire debt transferred to one of the parties. From now on the other party no longer has an obligation under this title.
What documents are required to assign a mortgage?
The list of specific documents largely depends on the requirements of the bank where the mortgage was granted. The assignment procedure is usually considered individually, which is why banks often ask for other certificates.
Assignment of a housing loan – the most frequently needed documents:
- co-borrowers’ identity cards,
- Credit Agreement,
- documents necessary to verify creditworthiness (income certificate, bank statement influenced by remuneration, employment contract, PIT for the last 2 years, etc.),
- real estate documents (notarial deed, development contract, an excerpt from the land and mortgage register, building permit, etc.)
Assignment of franc mortgage
Ex-spouses who have a loan in francs have a bigger problem than those who pay their mortgage in USD. The reason is simple – a loan in this currency is one of the most expensive mortgages.
Assigning a franc mortgage in this situation is therefore unprofitable. Therefore, for many people, the most advantageous solution will be renting an apartment and repaying the loan from funds that come from the lease.
What are the costs of assigning a mortgage?
The assignment of a mortgage to another person in most cases is associated with additional costs. In the document, which is the Table of Fees and Commissions, you can find a detailed list of services for which the bank charges fees.
Unfortunately, when browsing the document yourself, it’s difficult to choose the cost that will be incurred in our case. Below are the ones that appeared most often.
Assignment of a mortgage cost – examples:
- Preparation of an annex to the contract – USD 100
- Release of the Borrower / Borrower from debt – USD 300
- Fee for examining an application for changing the subject of loan collateral or changing the Borrower – USD 100
Rules for the assignment of a mortgage in Good Finance
It is practically impossible to transfer a mortgage to another Good Finance person. The bank provides only the option of joining or withdrawing from debt.
In the second case, the bank checks the possibility of paying off the liabilities of those borrowers (or one borrower) who remain in the loan. Each of the similar situations is analyzed individually, and the final decision is made after a thorough analysis of the documentation provided.
Rules for the assignment of a mortgage at mBank
The assignment of mBank’s mortgage involves the write-off of a co-borrower’s debt. To do this, you must apply for debt relief and, if the reason for the assignment is divorce, divorce.
In addition, borrowers should submit a statement explaining the ownership of the collateral or another document confirming the change in ownership of the property (e.g. a document confirming the division of property, a notarial deed of sale agreement or real estate donation).
The bank considers each situation individually, which is why customers are often asked to provide additional documents, which will be notified in writing or by email.
Rules for the assignment of a mortgage at Good Finance
Some banks are not eager to share news on how to change the terms of the loan agreement. The assignment of a Good Finance mortgage is a great secret, and the bank itself is reluctant to provide such information on its website.
Unfortunately, you can also not find any message about possible costs and the form of the loan assignment form. If you have a mortgage with a Good Finance bank, contact the helpline, which is available 24 hours a day. A bank employee will inform you what the debt ceding procedure looks like in your case.