When you stand and have to buy a house, you will usually have the opportunity to take over the existing seller’s loan. Taking over the seller’s loan can in many cases save you a lot of money, but there will also be cases where it can’t pay off.
Consider the possibility
You can always see information about the type of loan the seller has in the sales listing if the property is translated through a real estate agent. If this is not the case, you can look up the address in the land register to see what loans are listed on the property
If it appears that the existing loans in the property are a type of loan that suits your finances and risk appetite, you should consider the possibility of taking over the existing mortgage.
In order for this to be possible, you should approach a specific mortgage institution and inquire about the costs and possibilities of taking over the existing mortgage. If you then choose to proceed with the process, it will of course also require them to be approved by the mortgage institution.
It is important that you investigate as early as possible whether or not it is appropriate for you to take over the seller’s loan, because the process for the mortgage institution to approve you can be lengthy.
Therefore, it is cheaper
If you take over the old mortgage, it is typically not associated with the same high costs as if you were to have a change of ownership loan (new mortgage). A new ownership change loan must be registered with 1.45% of the principal plus court fee of USD 1,640.
If you can take over the old loan, just make a debt repayment statement which typically costs a few hundred dollar.
It may therefore be a good idea to take over the existing mortgage – even if the net payment is a few hundred dollars more expensive. The total repayment will in many cases be cheaper – and a better financial choice in the long run.
You can take out loans even if that is not enough
Maybe the seller has already paid off so much on the loan that you need to borrow more. This can easily be done, so it is simply a supplementary loan.
If so, you will save money on the state registration fee to the state, which is payable each time you take out a loan and which is calculated based on a percentage of the loan size. This is because the registration fee is only payable by the new supplementary loan.