This is how you can change the owner of a mortgage: it is only allowed in these cases

When a mortgage is signed, there may be the possibility that, by doing so, we appear as co-owners with another person. It is something relatively frequent, especially in the case of couples who have decided to buy a home and resort to this method of financing. But what if in the future the couple breaks up? What’s going on?

The Bank of Spain that it is possible, on these occasions, to change the ownership of a mortgage, although it is a process that is not always possible. For these circumstances there is the novation, which according to the entity consists of “changing any of the conditions of the mortgage loan at a time after its contracting.”

It establishes that one of the reasons that allow the modification of mortgage loans is the change in personal guarantees, that is, the change in the ownership of a loan. Of course, this must have the approval of the entity.

This acceptance by the bank does not always occur. In practice, it all depends on your policy regarding changes: if these changes entail a violation of your business policy or, in your opinion, greater risks (one less person means less payment guarantees than initially foreseen), you could refuse To do it.

If, on the contrary, the entity accepts the modification of the ownership, the first thing that the interested party should know is that for this they will have to carry out a public deed in which the changes are formalized. In addition, the client may have to bear a series of expenses:

-A commission for novation if it is stipulated in the contract and that can be a certain percentage of the debt that has not yet been paid.

-The payment of a new appraisal to know the updated value of the home that has been financed with the mortgage.

The Bank of Spain explains that if the novation finally goes ahead (that is, if the bank accepts and the client is responsible for these possible expenses), the European Standardized Information Sheet must be delivered to said client (with pre-contractual information), the Standardized Warning Sheet and the rest of the previous documentation at least 10 days before the novation is certified with the signature of the employees.