Second-hand transactions have been quiet recently, but many owners are making frequent moves. What are they doing? It's a remortgage. The incident occurred after Financial Secretary Paul Chan Mo-po relaxed the mortgage loan ratio in July, attracting many property owners who purchased properties with high loan ratios to switch to mortgage insurance, that is, to avoid mortgage insurance.
Under the current system, property owners are required to purchase mortgage insurance when taking out high-percentage mortgages. Assuming a NT$10 million property is purchased with a 90% mortgage, and the premium is paid in one lump sum, the cost will be NT$225,000, which is not a small sum. If the owner surrenders the policy in the first year, he can get back the 40% premium, which is 90,000 yuan; if he surrenders the policy in the second year, he can get a quarter of it, which is 56,260 yuan; if he surrenders the policy in the third year, he can get 15% back, which is 33,750 yuan. However, since bank mortgages generally have a penalty period, few owners will surrender the policy in the first two years. Normally, they will do so in the third year. Why would relaxing mortgage ratios attract homeowners to surrender their insurance policies? The reason is that after the mortgage ratios were relaxed, owners made early payments. The threshold for reducing the mortgage ratio to 70% has been lowered. Assuming that the owner borrows 80% when buying the property and makes up 10% of the capital two years later, he can reduce the mortgage ratio to 70%, apply for surrender and get back the 15% mortgage premium.
The method to apply for surrender is very simple. The owner can apply to the original bank or choose to remortgage.
Remortgage and earn cash rebates
One of the key reasons why homeowners choose to remortgage their insurance instead of using the original bank is that they can earn cash rebates by remortgaging. When an owner applies for a mortgage to buy a property for the first time, he or she can normally get a cash rebate, and he can also get a cash rebate when he remortgages. Coupled with the incentives provided by the mortgage referral company, it is equivalent to receiving two "full" rebates, which is very attractive to property owners. One thing that property owners need to pay attention to is that the current mortgage loan-to-value limit is 70%, which means that if you surrender the insurance by remortgaging, you can only get a mortgage of 70% at most. The 70% prerequisite is that the property needs to be used for self-occupation; if the property is used for rent, the mortgage can only be 50% at most.
Therefore, if you intend to rent out the property you hold after the guarantee is waived, you must prepare more funds and lower the mortgage ratio to 50%.
Each property can only be surrendered once
On the other hand, the author also shares some cases where insurance cannot be surrendered. First of all, each property can only be surrendered once. For example, Mr. Chen (pseudonym) bought a property with a 90% mortgage, and then successfully surrendered the property by remortgaging. Later, he remortgaged the property and made an 80% mortgage. The mortgage of this time The premium cannot be refunded. In addition, if the mortgage is over three years old, the premium cannot be refunded. Owners should also be careful not to make late payments, because the relevant records may also affect the refund fee. Some readers may ask, since the surrender charge can only be refunded once, if you only take out a 70% mortgage when you first purchase a property and do not buy a mortgage premium, and later remortgage to a high-percentage mortgage, you must purchase mortgage insurance. Can I apply for surrender within three years? The answer is yes.
Since it is the first time for this property to have mortgage insurance, the owner can then apply to the original mortgage bank or remortgage to get out of the insurance and get the premium refunded.