Can I get a mortgage on the land I intend to buy?

Can I mortgage the land I intend to buy?

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 land use fees collected;

- Land is leased with one-time land rent payment for the entire lease term;

- Land has land use rights recognized by the State;

- 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 and between the ages of 22 and 65 (for men) and 60 (for women).

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

- Mortgage customers must have full civil capacity, never had bad debt or been involved in black finance.

- 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 house and land area must be re-measured to ensure compliance with bank regulations.

Procedures for mortgage loan for land purchase

Before the bank appraises the application, the customer needs to prepare relevant documents such as: identification papers, marriage certificate (if married), certificate of celibacy (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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