Is it possible to get a mortgage on the land you intend to buy?

Is it possible to use the land you intend to buy as collateral?

According to Point g, Clause 1, Article 179 of the 2013 Land Law, households and individuals using land belonging to one of the following types of land are entitled to mortgage land use rights at banks, other economic organizations or individuals, including:

- Agricultural land allocated by the State within the limit;

- Land allocated by the State with payment of land use fees;

- Land is leased with a one-time payment for the entire lease period;

- Land for which the State has recognized the right to use the land;

- Land to be converted,

- Land received by transfer (purchase), gift, inheritance.

Based on the above regulations, the land to be purchased can still be borrowed from the bank through the signed real estate purchase contract. The bank will appraise the value of the land and the borrower's income to review the application. Normally, the bank will lend with a limit of 70 - 90% of the house value, with a loan term of 15 - 35 years.

Conditions for mortgage loan for land to be purchased

Since the house to be purchased has not been granted a certificate of ownership, the bank will be more cautious when deciding whether to mortgage the customer or not. That decision is based on the following conditions:

- Customers must be Vietnamese citizens aged between 22 and 65 (for men) and up to 60 (for women).

- People who want to mortgage the house they are about to buy must have a temporary residence registration book and proof of temporary residence with a certificate of temporary residence in the area where the bank's headquarters or branch is located.

- Mortgage applicants must have full legal capacity and no prior history of bad debt or involvement in illicit financial activities.

- Customers have a stable minimum income, meeting the bank's regulations

- The mortgaged property must be owned by the customer, the loan contract represents the customer himself.

- The area of the house and land must be remeasured to ensure it complies with the bank's regulations.

Procedures for obtaining a mortgage loan on land you intend to purchase.

Before the bank appraises the application, the customer needs to prepare relevant documents such as: identification papers, marriage certificate (if married), celibacy certificate (if single), real estate sale contract signed by both parties and witnessed by a third party, documents related to the land to be mortgaged and monthly income declaration in accordance with the requirements of that bank.

The bank will then review the application and notify the customer whether the application is approved or not. If the application is approved, the customer will come to the bank at the scheduled time to proceed with the disbursement procedure.

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