Changing debt to loan

Mortgage refinancing is executed as regular mortgages. If the application is approved, the bank transfers the entire amount of the debt into the account of the previous credit institution, the borrower takes his mortgage from one bank and prepares a deposit at another bank. For the term of removal of encumbrances and registration of new mortgage, the new loan rate is usually higher by 1-2 percent. 

Aleksey Prokhorov, senior lawyer of tax and customs practice of YUST Law Firm, told “Rossiyskaya gazeta” how not to lose your right to property tax deduction on the loan costs: “As in the case of the conclusion of the original credit agreement for financing the purchase of residential property, from the text of the loan agreement concluded in order to refinance, it must follow that the loan is granted for a specific purpose”.

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