VICONDITIONS, PROCEDURES FOR BANK LOANS TO RED BOOK MORTGAGE
Red book mortgage loan at banks is a popular form of loan when borrowers need money to buy a house, car, business, etc. capital in this form?
What is Red Book Mortgage?
Red book mortgage is a form of mortgage of real estate by using the red book in its own name or owned by a third party who commits to use that property as collateral before the bank to receive large loans such as buying a house, buying a car, starting a business, etc.
According to the provisions of the Civil Code 2015, mortgage of property is when one party (the mortgagor) uses the property under his/her ownership to secure the performance of an obligation and does not hand over the property to the other party (the mortgagee).
Therefore, the mortgagor has the right to exploit the utility, enjoy the yields and profits from the mortgaged property, except for the cases where the yields and interests are also collateral under the agreement and invest to increase the value of the mortgaged property. of mortgaged property.
Mortgage transactions take effect from the time of notarization or authentication, especially the mortgage of land use rights, forest use rights, ownership rights to planted production forests, aircraft and ships takes effect from the date of notarization or authentication. from the time of mortgage registration.
In fact, this loan is usually worth less than the collateral. However, there are some exceptions, the loan value may be greater than or equal to the value of the collateral.
When applying for a red book mortgage, customers will enjoy many benefits such as being able to borrow up to 70% of the value of the collateral, quick loan procedures, many incentives on interest rates, ...
Conditions and procedures when applying for a red book mortgage
Mortgage of land use rights is a basic right of land users prescribed by the Land Law. Accordingly, the type of land to be mortgaged includes:
- Agricultural land allocated by the State within the limit;
- Land allocated by the State with land use levy;
- Land is leased with one-off payment for the entire lease period;
- Land recognized by the State with land use rights;
- Land can be converted, transferred, donated or inherited.
Land users may mortgage land use rights when the following conditions are met:
- Having a certificate of land use rights, ownership of houses and properties attached to land;
- In case of conversion of agricultural land use rights, the land users may mortgage after the decision on land allocation or land lease is issued; in case that inherits the land use right may mortgage the land use right when having the land use right certificate bearing the name of the heir;
- Land users who are late to fulfill their financial obligations or have their financial obligations debited must fulfill their financial obligations before mortgaging land use rights.
Note: The mortgage of land use rights must be registered at the land registry office and takes effect from the time of registration in the cadastral book.
Red book mortgage loan process
Step 1: Submit a loan application at the bank
Step 2: The Bank checks the Certificate or other legal documents to determine the authenticity of the Certificate of Land Use Right, the land use term, and financial obligations related to the land use right;
Step 3: Appraisal and inspection division Field inspection, survey, measurement and valuation of property; Check information about property, family, job, source of income, loan purpose... After the mortgage or pledge property is valued, the bank will decide how much you can borrow up to. based on the value of this property.
Step 4: Approve the loan, sign the mortgage contract between the bank and the mortgagor (the person with the land use right), notarize the mortgage contract at a notary practice organization and the bank conducts the settlement. echo.
Note when applying for a red book mortgage
According to the provisions of the Civil Code 2015, in case of mortgage of land use rights without mortgage of land-attached assets and the land user is concurrently the owner of the property on land, the property shall be including property attached to land, unless otherwise agreed.
In case the land user is not concurrently the owner of land-attached assets, when handling land use rights, the owner of land-attached assets may continue to use the land within the scope of his/her rights and obligations. mine; The rights and obligations of the mortgagor in relation to the owner of the property on land shall be transferred to the transferee of the land use right, unless otherwise agreed.
Assets attached to land can be perennial trees, construction works... these assets are owned by the mortgagor. Where the parties agree to mortgage land use rights without mortgage of land-attached assets, if the mortgaged property is land use right, it shall not be handled as collateral.
As for the case of mortgage of land-attached assets without mortgage of land use rights, if the owner of the property on land is also a land user, the property shall be handled including the right to use the land. land use, unless otherwise agreed.
If the owner of land-attached assets is not concurrently a land user, when handling land-attached assets, the transferee of ownership of land-attached assets may continue to use the land within the scope of land-attached assets. rights and obligations of owners of property on the transferred land, unless otherwise agreed.
Note that when signing a mortgage contract, it is necessary to check the scope of the mortgage to the correct subject of the mortgage. The law is intended to protect the rights and interests of the buyer of the property attached to the land, and to create favorable conditions for the handling of the secured property.
For the case of guarantee through a mortgage contract with a third partys property, many disputes arise when the third party does not clearly explain his rights and obligations when using his or her property as security. for the borrowers loan, the security by this property has the case that the Court declares invalid for the transaction.
In order to ensure safety when dealing with mortgaged properties, for the mortgagor who is not sure about the legal provisions when taking out a mortgage loan, it is advisable to have a lawyer knowledgeable about mortgage regulations check and review. contract and clearly explain the rights and obligations to avoid disputes when the bank recovers the collateral later.
Source: Duc An Law
