Increase property value when mortgaging bank loans

Banks value assets low, customers request high value - that is the issue that many people are concerned about when mortgaging assets to borrow money from banks. Many commercial banks have hired consultants to value assets as a basis for lending to ensure the interests of both customers and banks. However, many customers still request that commercial banks need to increase the value of assets for customers when mortgaging for loans.

Banking business is a risky business. In addition to the business lines stipulated in the charter permitted by law, the main business of banks is capital mobilization and lending. Lending activities always have potential risks, customers who borrow capital for many reasons cannot repay their debts (including principal and interest), leading to banks having to "struggle" to both compensate for the loans that customers cannot repay according to the signed credit contract, and pay interest on money mobilized from organizations and people, leading to serious impacts on the bank's operations. To minimize bad debt, during the loan procedures, many commercial banks always evaluate customers' collateral assets for loans much lower than the market price. Many customers believe that this will lead to difficulties in accessing capital sources.

Ms. Nguyen Thi Ha, in Group 1, Hai Ba Trung Ward (Phu Ly City) said: In early 2024, my family applied for a bank loan of 2 billion VND to do business and used as collateral a 3-storey house in the center of Phu Ly City, with a land area of ​​64 m2. If calculated according to market price, the house is worth about 4.2 - 4.5 billion VND. However, after applying for a bank loan, the credit officer came to appraise the property and only valued the house at about 2 billion VND. If the house is mortgaged to borrow capital, my family can only borrow a maximum of about 1.4 billion VND (equivalent to 70% of the property value). We recommend that commercial banks need to evaluate assets close to market price to create favorable conditions for people to borrow capital.

Customers transact at Agribank Duy Tien Branch.

According to the analysis of commercial banks, when the real estate market is bustling, prices increase dramatically, so the assessment of customers' collateral assets when mortgaging real estate for loans is also calculated very carefully by banks. If banks value collateral assets according to the land location price regulated by the State, the loan value will be very small, and if they value assets according to market prices, if they are not careful, banks will keep "virtual collateral assets". To ensure capital safety, many banks have improved their ability to assess asset values ​​by annually hiring consultants to value land in the area. On that basis, consultants will base on the land price regulated by the State and the market price to give the most suitable price to ensure the interests of both customers and banks.

Mr. Tran Hong Viet, Director of Agribank Kim Bang Branch, said: To overcome difficulties when using collateral to borrow capital from banks, every year, the branch bases on both the value prescribed by the State and the market price. Based on that, Agribank Kim Bang Branch will evaluate the customer's collateral to disburse capital appropriately at each time. In fact, using collateral will ensure legal procedures when lending capital and most importantly, increase the customer's responsibility when using capital. The unit's viewpoint is to only calculate the land value and lend at 70% of the value, while the property on the land is not counted; if the property on the land is counted, when the customer demolishes it to rebuild or dismantles the property to sell, the bank will lose the value of the collateral.

In order to reform the administration for customers mortgaging assets when borrowing capital, the State Bank of Ha Nam Branch has strengthened coordination with the Department of Natural Resources and Environment in exchanging and providing information on the notice of revocation and cancellation of Land Use Right Certificates related to banking activities in Ha Nam province, and registering collateral at the Land Use Right Registration Offices. The two units have developed a Regulation on coordination in exchanging and providing information, contributing to creating a legal corridor for credit institutions to use as a basis for lending capital and handling risks during the disbursement process. This approach will help commercial banks limit risks when holding collateral and improve the efficiency of capital disbursement activities. For qualified collateral, the Land Use Right Registration Offices in districts, towns and cities will promptly confirm to customers so that banks are eligible to carry out procedures for disbursing loans.

According to the assessment of commercial banks, the provision of information between the Department of Natural Resources and Environment and the local banking sector will actively support credit institutions in disbursing loans quickly, doing a good job of management and prevention, and limiting risks when lending to customers.

Tran Thoan

Source: https://baohanam.com.vn/kinh-te/tai-chinh-ngan-hang/nang-cao-gia-tri-tai-san-khi-the-chap-vay-von-ngan-hang-135773.html