- December 1, 2008 at 7:54 pm #54533
It seems that it is possible to buy a house and take over the sellers mortgage. What are the benefits & pitfalls of doing this?
- December 1, 2008 at 8:38 pm #88322
It’s known as subrogacion.
Benefit is you save on some costs such as valuation fee, opening commission, notary, tax & registration fee.
Downside is you normally pay 1% as a subrogacion fee and of course you take on the seller’s mortgage which may or may not be as competitive or the terms you want etc.
Make sure you obtain a copy of the mortgage deed and read it carefully or get yourself a solicitor etc
- December 1, 2008 at 10:56 pm #88325
Subrogation fee can be negotiated and can be as low as 0.5% which in any case is equal or less to the opening commission if you take a usual mortgage. One advantage is the length of term may be less than if you take out a new mortgage.
You need to fit the banks criteria. Some banks are even negotiating terms on subrogation if you are a good risk and put a sizeable amount down as deposit.
- December 2, 2008 at 2:21 am #88326
So, it sounds like it can be a real benefit if the circumstances are right. Thanks, for the info 🙂
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