The mortgage loan novation is the modification of any of the clauses or aspects of the mortgage loan. These changes must always be preceded by a signature. However, even if the customer presents a novation, the bank is not obliged to accept it. There are several aspects by which a novation can occur:
The amount: it is about increasing or decreasing the total amount of the mortgage loan and with it the refinancing of it.
The deadline: this contractual novation, is one of the most requested among customers who have contracted a mortgage loan. Its purpose is to extend the payment term of the mortgage loan so that the monthly payment is reduced.
Currency exchange: the logical thing in Spain, is that the mortgage loan is agreed through payment in euros. However, we can exchange it for another currency.
The type: the novation type consists of changing the interest of the mortgage loan from fixed to variable or vice versa. Each time it is used less frequently. This is due to little competition that there is currently among banking entities.
The liquidation of the loan: normally the loans use the French system to proceed with its liquidation. However, customers are not required to use this.
Cancel exorbitant clauses: if our mortgage loan contains a ground clause or other type of excessive clauses, you can request a novation of those clauses to cancel them.
HOW MUCH DOES A mortgage loan NOVATION COST?
If you have ever asked if this procedure is free, the answer is no. When talking about the expenses involved in a mortgage loan novation, we must clarify that they are less than those of a subrogation or those that have already been paid to sign the mortgage loan loan. In general terms, to change the conditions of a mortgage loan, the following expenses must be taken into account:
Notary : around 0.2% and 0.5% of the capital.
Agency: the procedure to formalize a novation mortgage loan is 250 euros.
Commission: any change in the terms contracted in a mortgage loan, entails a commission. This interest is specified in the contract. This commission is usually between 0.1% and 1% depending on the amount applied by each bank.
Valuation: if we increase the capital of the home, it has to be assessed again. This entails a payment that ranges between 100 and 300 euros, depending on the value of the property.
Property registration: the cost of registering the property is half the cost of notary.
Therefore, making a novation of the mortgage loan includes some costs that may be higher or lower depending on the contract of our mortgage loan.