What is the mortgage transfer? – My credit redemption.

What is mortgage?

What is mortgage?

It is important from the outset to define what a mortgage is, before addressing the notion of mortgage transfer. Defined as being the real right that a person has over the buildings registered in the performance of an obligation, the mortgage is materialized by an act carried out by the care of a notary, and is manifested by the taking of an inscription. on the property (s) concerned. Once realized, this notarial act must be registered with the services of the land advertisement.

Mortgage transfer is a legal process that actually leads to two outcomes. Initially, a new guarantee is created on a building to be encumbered, while a second release is given of an initial mortgage, established upstream. This means that the first guarantee still exists, and is just simultaneously replaced by a second.

More specifically, the mortgage transfer is often implemented when the acquisition of real estate through the income from the sale of another property that is already available. It may happen that the sum is still not enough. It is in this case that the transfer of mortgage occurs, which allows to consider reviewing the terms of credit by going to his bank with an offer of mortgage transfer. A new security interest is then created on the immovable that was intended to be encumbered, and a release is also concomitantly effected on the security relating to the building to be discharged.

When transferring the mortgage,

When transferring the mortgage,

It is recommended that the parties link the two transactions, via two consecutive acts, or through a single act including both transactions. It is important to highlight two key nuances to the mortgage transfer mechanism:

  • The new mortgage exists only if the release was actually carried out on the previous one.
  • The release of the future security is acquired only if the new mortgage has been completed.

Realizing the transfer mechanism via a single act is more advisable, not only to benefit from the reduction of notarial fees, which are actually borne by the debtor, but also to increase the chances of completion of the operation in its entirety. Of course, the bank reserves the right to refuse this transfer offer and to demand repayment of the initial credit with the sale of first property.

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