Do you have a current mortgage , taken out with your bank, and wish to open a new account at another banking establishment? You have the right. Here’s what you can do concretely.
Is it possible to open a new bank account, with a loan outstanding in its original bank?
The answer to this question is yes. Having a current mortgage in your current bank should not prevent you from changing your banking establishment , if that is your choice, or simply from opening a new account at this establishment.
Indeed, since the beginning of February 2017, the Congilaw allows everyone to be able to change banks easily.
You can thus have a new account in another bank , and make a request for redemption of your current mortgage , with the new banking establishment. You can also decide to leave your loan in the original bank, and open a new bank account elsewhere.
The procedure is relatively simple for the person interested in a change of bank. Indeed, it will suffice to provide a mandate and to its future bank.
At his level, that’s all he will have to do, then the new bank will take care of all the necessary formalities.
Why is this procedure possible?
The original bank, although you are a client, is in no way committed to you, since there is no written agreement between the two parties (nor an oral agreement).
You are therefore within your rights, and free to leave your bank, even if you have taken out a mortgage with it . The bank is not entitled to compel you to remain its client.
So that the procedure can succeed, it will be necessary, however that you have regular income, and that you are not subject to a bank ban either.
Indeed, if the loan is not bought back by the new bank, you still have the obligation to repay it in your original bank, this does not change. You will therefore have to continue to receive regular income in order to repay the loan .
Obviously, if you were prohibited from banking, the new chosen bank will not be able to accept you as a new customer, you could not change banks.
Keep your loan in your bank, and open a bank account elsewhere
Keep your loan, but open an account in another bank, you are entirely entitled to do so. On the change side, the domiciliation of accounts will be done in the new bank.
Then the repayment of the mortgage, taken out in the original bank, will be made by means of a permanent transfer each month.
This automatic procedure of course requires regular income to be paid into the new bank account, that goes without saying.
This solution allows you to have accounts in two different banks. As for the current mortgage, to be repaid, this “simplifies” things. On the other hand, as a customer, you must be fully aware of the bank charges that each of the two banks will charge on your accounts! This can generate significant costs.
Have your home loan bought back by the new banking establishment
Do you want to close all of your accounts in your original bank, for your own reasons? Have you taken out a mortgage in this bank?
If you want to close your accounts in your home bank, and have your current loan transferred to your new bank , you will have to request a redemption from your new bank .
The new bank will carefully review your file. But beware, because this one, after study, is not under the obligation to accept you as a new client, nor to buy back your mortgage. It is a risk to take for you. You will therefore have to be careful, and not close your other accounts too quickly.
On the other hand, if your file interests this bank, it will do everything necessary so that you quickly become part of its clientele. For this, she may consent to a commercial, even financial, gesture towards you. This could be a discount, reduced bank charges, advantages … Each banking establishment has its methods to attract a potential customer.
Indeed, if a profile has a “good” financial profile, attractive, inspiring confidence; it will always be interesting for a bank. She will therefore do everything necessary so that he does not go to another establishment than his own.
Negotiating a mortgage loan: what are the advantages for you?
The negotiation of the repurchase of your mortgage is important for you because you it is the opportunity to put into play the conditions relating to your loan .
In this crucial step, you will talk with the bank that interests you about the duration of the loan, the interest rate, and also the repayment deadlines . Every important point for you should be addressed there.
By negotiating skillfully with a bank, you can obtain very attractive rates. You will also be able to benefit from lower insurance costs than from the competition.
Also be aware that you can get reduced monthly payments.
By having yourself seconded by a real estate broker, you will be sure to have a strong ally with you.
You will have someone by your side who fully understands your expectations. Indeed, you will have previously discussed with him all the points to be negotiated. This real estate broker will be able to support you effectively in your negotiation, so that you obtain maximum success.
As you can see, a successful negotiation will bring you significant advantages.
Changing banks when you have a mortgage in progress is entirely possible . Here you have the choice between keeping your current mortgage in your original bank, or requesting the repurchase of this loan by your new bank.
Before you decide, carefully consider the pros and cons of each solution.
If you hesitate between these two choices, it will be best for you to take advice from a real estate broker, who will provide you with all the information you need.