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Can a mortgaged property be transferred?

Know the steps to transfer a mortgaged house so you know if it suits you or not and what could be some of the alternatives in case you decide not to transfer the property 

“Can a mortgaged property be transferred ?” and “What are the requirements to transfer a house?” Transferring a home means transferring its rights to another person and, where appropriate, the maintenance obligations and pending debts, including the mortgage loan. The transfer also implies a negotiation since the first owner will seek in return a monetary amount that compensates for the investment made so far. 

There are multiple factors why people choose to carry out this type of transaction. Either because they are unable to continue paying the creditor because they simply want to get rid of the property based on other criteria, such as a change of residence or real estate investments.

The transfer of a home is a completely legal procedure in Mexico. However, it should be taken into account that each financial institution or entity carries out a different process.

Can an Infonavit mortgaged property be transferred?

In the case of Infonavit, for example, although it allows the debt to be transferred, the institute does not formally recognize the change of ownership until payment is completed and the deeds are modified. Therefore, even if another person takes over the mortgage loan, this institution recognizes the original beneficiary as the legitimate owner of the property.

Similarly, if for any reason the new owner stops paying, it is up to the previous beneficiary to pay off the entire debt on the home.

Now, if you are already convinced, the requirements to transfer a house and the steps that must be carried out in most financial entities are very easy to follow and are listed below:

Steps to transfer a house

  • Choose a debtor
  • Wait for a response from the institution that granted the credit
  • Go to the bank to make the change 
  • Find a notary public to legalize the transaction
  • Deliver the home to the new debtor

Choose a debtor

The first step in transferring home is to choose a person with a good credit history. Choosing a debtor who is responsible is of great importance, so it is important that you investigate a said person and his behavior regarding his debts to avoid any type of real estate fraud.

Likewise, it is important that you make sure that you are not in the credit bureau and that you have all the requirements of the financial institution so that the mortgage loan is approved. Otherwise, you will have to choose another debtor.

Wait for the response from the institution that granted the credit.

After choosing the person to whom the home will be transferred, the next thing is to go to the institution that granted the credit to notify them that a transfer is desired.

Then, before carrying out any type of procedure, you must wait for the entity’s response to this transaction to, now, show all the required documentation and look for a notary public to regulate the entire procedure.

Likewise, the institution will proceed to investigate the debtor, to verify that he meets the minimum requirements so that a mortgaged property can be transferred to him, together with the rights and the debt.

Go to the bank to make the change.

Another of the steps to transfer a house is that, once this transaction is authorized, both the original beneficiary and the new debtor appear at the bank’s facilities to show the required documentation. 

Within the documentation, the request for substitution of the debtor must be presented, as well as current and official identifications, birth certificates, all documents that have to do with the mortgage loan, and proof that both parties are beneficiaries.

Find a notary public to legalize the transaction.

A mortgaged property can be transferred as long as the process is done legally, with a notary public following up on the process. It is important to emphasize that consultations with notaries are made free of charge, and they only charge at the time the exclusive contract with them is made.

A notary public will be in charge of avoiding fraud, carrying out all the legal procedures, and attesting that the transfer is made under all the terms of the law in Mexico. Also, you can go to him at any time if any situation arises, even years after the transfer.

Deliver the home to the new debtor

Once the steps have been followed, and the property is ready to be transferred, both the original owner and the new owner will be awarded the housing price.

In this way, the new creditor will be responsible for paying off the mortgage, along with an extra amount, if the house had some kind of capital gain, which is usually very frequent.

Requirements to transfer a house with mortgage credit.

  • Meet the requirements of the mortgage loan
  • Be current with all payments
  • Check the debtor’s credit history

Meet the requirements of the mortgage loan

Both the original debtor and the new debtor must meet the requirements to apply for a loan stipulated by the banking institution, whether private or through entities such as Infonavit or Fovissste. 

In the case of Infonavit, the requirements are to prove that you have a stable and continuous job, have a minimum of 116 points, and be entitled to the Mexican Institute of Social Security.

For the Fovissste, you need to be an active State worker, be over 25 and under 70 years old, have a minimum of 18 months contributing to the Fovissste, and request a credit application at the banks that have agreements or through SOFOMES or SOFOLES

Be current with all payments.

This is one of the main requirements to transfer a house. The first point that the financial institution will rectify will be that the former beneficiary has made all the mortgage payments in a timely manner, in addition to the service payments being up to date.

Otherwise, the beneficiary will be asked to cover all debts so that the property can be transferred. We recommend that even if you plan to transfer, you stay current with your mortgage payments. 

Check the debtor’s credit history.

Another requirement to transfer a house is that the debtor has an excellent credit history. If you do not have one, you need to have a savings account or something similar, to verify whether or not you will be responsible for the debt.

Likewise, when appearing before a notary public, an act will be signed with all the responsibilities and obligations of both the original owner and the debtor to avoid real estate fraud.

Alternatives to consider before transferring a property

  • Choose a program offered by the institution to change housing
  • sell the property
  • return the property

Choose a program offered by the institution to change housing.

Now, carrying out a mortgage transfer is always a risky process. If you want to opt for another option, many institutions offer programs that can help you not to transfer the house.

sell the property

Another viable option is to sell the property since it turns out to be a transaction that Infonavit approves, as long as all monthly payments are covered, and there is no type of debt with services.

return the property

Another alternative for those who are unable to continue paying the mortgage loan is to return the property. However, it is one of the least liked alternatives since, with a mortgage cancellation, all the money invested in monthly payments will not be returned.

These alternatives can help you in case you do not want to risk transferring a house. Some institutions do not recognize this procedure, and it could be complicated in situations such as the death of the original owner since the rights to the home could be transferred to their spouse or children.

You already know how a mortgaged property can be transferred, so if it is the type of procedure you want to carry out, take into account all the alternatives and take care of both your pocket and your assets. 

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