Changing a mortgage loan from a cooperative to a bank to lower the rate and save money may be possible. Each case deserves its study.
Do you have a mortgage loan with a cashier or a cooperative and did you realize that the interest rate is high?
Most likely, you want to improve your credit business by looking to lower the rate to save a lot of money. That is, of course, an appropriate way to see the business of buying your credit: be aware of changes in interest rates to see the possibility of making a transfer or purchase of the mortgage debt.
But it is not the only way to understand a good business. Let’s see.
The savings banks, cooperatives and financial
The Colombian financial sector is made up of public and private entities that carry out activities related to the management, use and investment of the country’s collection resources.
There are 4 types of entities like this:
Obtain in public currency resources from the public in demand or term deposits, to place them through loans for housing, construction or for free consumption, discounts, advances or other credit operations.
- Commercial and mortgage banking establishments
- Financial corporations
- Savings and housing corporations
- Commercial financing companies (finance trade)
- Cooperative organizations of a higher degree and of a financial nature (the client becomes a saver and partner)
Savings Financial Institutions:
They stimulate saving by the constitution of money capitals in exchange for single or periodic disbursements, with the possibility of early reimbursements by means of raffles.
- Financial leases: Leasing (leasing of machinery or real estate in which the first purchase option is obtained by the client. Ex: West leasing)
- Factoring (they buy customer portfolio and charge them)
- General Warehouses of deposits (they conserve, handle, distribute and guard the merchandise and the purchase – sale of their clients)
Financial Services Companies:
They do not massively collect public money, work with their own capital and manage the money they receive from their clients.
- Trustees (Manage assets and investments, can receive letters, exchanges or money orders)
Insurance entities and insurance intermediaries: Assume losses that are covered as a risk, by virtue of an insurance contract to cover the eventual claims suffered by their clients.
- Insurance companies and reinsurance companies or cooperatives
- Insurance Agencies
Do all entities report their operations to the Bank of the Republic? – Lace Law
Bank reserve is that percentage of resources that financial intermediaries who receive funds from the public must keep frozen. They can keep these reserves either in cash in their boxes, or in their accounts.
Now, not all operations are taken into account to calculate the reserve requirement. There are some that should not be reported. According to their nature as a financial entity, that is, if they are banks, cooperatives or savings banks, for example, or the type of business they carry out, they will be subject or not to a reserve obligation. And this is where the mortgage loans granted by banks and those granted by entities that do not report to the Bank of the Republic are differentiated
How does this affect you?
It affects you. It’s that simple. It is likely that your credit is not reported to the Bank of the City, which is legal. Maybe the box or cooperative that lent you is not required to report some of the operations it performs. The problem is that banks, which have stricter policies than savings banks and cooperatives, expect that a current credit will be reported.
Why? A credit granted by another entity with less rigor in the study for approval involves a high risk.
The risk that banks assume
Banks take great care of the level of risk in their businesses. They are required by law to do so. Your credit could fall into a high risk category.
In that order of ideas, is there a possibility that a bank will accept a transfer of your mortgage loan from a cooperative, cash or financial institution ? Honestly, not many.
What can you do? Ask a bank for a home equity loan, which has a lower rate than what you currently pay.