Can I Take over Someone Else’s Mortgage?

If you are thinking of buying a home that already has a mortgage attached, you may have asked yourself the question: can I take over someone else’s mortgage? The answer is yes, and this process is known as mortgage subrogation. It is a legal and regulated operation that allows you to assume the conditions of an existing mortgage, usually to facilitate the purchase of a property without having to sign a new loan from scratch.

In this post we explain what it is to take over a mortgage, how it works between individuals, what advantages and risks it has, and how to do it with guarantees.

What is Mortgage Subrogation?

Understanding what mortgage subrogation is is essential before making any decision. Mortgage subrogation is the process by which a new person becomes the holder of an existing mortgage, either because they buy a home with a mortgage or to improve the conditions of the current loan (changing, for example, the bank).

There are two main types of subrogation:

• Debtor subrogation: when the new owner assumes the original mortgage.
• Creditor subrogation: when the financial institution that grants the mortgage is changed.

The most common between individuals is debtor subrogation, and it is usually used in second-hand home purchase transactions.

What Does Mortgage Subrogation between Individuals Consist of?

Mortgage subrogation between individuals is an agreement by which the buyer of a home takes over the mortgage that still weighs on the property. That is, the previous loan is not canceled, but is assumed as is, with the same conditions.

This type of subrogated mortgage can be very interesting if the original mortgage has more advantageous conditions than the current market conditions. For example, lower interest rates or reduced commissions.

However, the subrogation of a mortgage is not automatic. Authorization from the bank is necessary, which will assess whether the new debtor meets the required financial requirements.

Advantages and Disadvantages of Having a Subrogated Mortgage

Before making a decision, it is important to assess the pros and cons of the subrogated mortgage:

Advantages of a Subrogated Mortgage:

• Saving time and expenses by not having to formalize a new loan.
• Possibility of maintaining better mortgage conditions.
• Lower notary and registration costs compared to a new mortgage.

Disadvantages of a Subrogated Mortgage:

• The bank may refuse the subrogation if it does not accept the new owner.
• Existing conditions may be worse than current offers.
• It is necessary to check if there are clauses or commissions that make the process more expensive.

How to Do a Mortgage Subrogation Step by Step?

If you are clear that you want to take over a mortgage, we recommend following these steps:

If you are clear that you want to take over a mortgage, we recommend following these steps:

• Negotiation with the seller: agree that you will assume their mortgage.
• Contact the bank: request approval of the subrogation.
• Financial study: the bank will analyze your economic capacity.
• Signature before a notary: the change of ownership is formalized.
• Registration in the registry: the new ownership of the mortgage and the home is registered.

Trust Espígul to Manage the Subrogation of your Mortgage

At Espígul we accompany you throughout the process of buying, selling or subrogating a home. If you ask yourself “¿Can I take over someone else’s mortgage?”, or you want to know exactly what a mortgage subrogation is, count on our team to advise you with total transparency and professionalism.

We help you analyze if the subrogation of a mortgage between individuals is the best option for you and we take care of all the procedures with banks and notaries. At Espígul, we work to make your path to a new home agile, safe and without surprises.

Likewise, you might be interested in our previous post about how to sell a flat with a mortgage.