A mortgage loan is also known as a “mortgage loan”. Refers to a form of lending used by some national banks. The borrower is required to provide certain collateral as a guarantee for the loan to guarantee the repayment of the loan when it is due. Collateral is generally easy to preserve, not easy to wear, and easy to sell, such as securities, bills, stocks, real estate, etc. After the loan expires, if the borrower does not repay the loan on time, the bank has the right to auction the collateral and use the auction proceeds to repay the loan. The balance of the auction proceeds to repay the loan will be returned to the borrower. If the auction proceeds are insufficient to repay the loan, the borrower will continue to repay.
The mortgage stipulated in the Urban Real Estate Management Law and the Guarantee Law is different from the mortgage in Hong Kong, that is, the definition of a mortgage in these two laws is conditional on the non-transfer of possession.
Mortgage means that the mortgagor (the buyer) obtains the ownership of the purchased commercial house by installment. It has two meanings for house buyers: first, the house payment can be paid in installments within a specified period; second, in the stage of installment payment, the ownership of the house is “pressed”, and it cannot be “revealed” until it is fully paid ( take) to get it. In addition, the mortgage sale involves a three-party debt relationship—that is, the mortgagor (the buyer), the developer (the seller), and the mortgagee (usually the relevant bank). Its procedure is that the mortgagor (buyer) first signs a house purchase contract with the developer and prepays part of the purchase price; The bank pays off the remaining purchase price to the developer, and the buyer makes regular payments to the mortgage bank until the “mortgage payment” is paid off according to regulations, and the mortgage process ends.
A mortgage is a way for a home buyer (mortgagor) to borrow money from a bank (mortgagor). That is, the buyer uses the purchased property as collateral, signs a mortgage contract with the bank, and guarantees that the loan will be repaid to the bank on schedule by not transferring ownership. This loan is subject to interest. After the buyer (mortgagor) repays the principal and interest to the bank as agreed in the contract, he can recover the collateral—“House Ownership Certificate” and “Land Use Certificate”. This means that the buyer doesn’t own the property they’re buying until the loan is paid off. If the loan is not repaid on time due to default, the bank can deal with it by the law.
A mortgage is a common method of real estate sales in the world. Although it is different from a mortgage, it has the same goal in “holding down the ownership of the house” to ensure the performance of debts (installation and scheduled repayment).
Measures for the Administration of Mortgage Loans
To better support the development of “agriculture, rural areas, and farmers” and build a new socialist countryside, we increased the types of loans and ensured loan security. To safeguard the legitimate rights and interests of both borrowers and lenders, these Measures are formulated by relevant state regulations.
Article 1 Mortgage loan is a form of loan in which the borrower is willing to use his own or a third party’s property as a guarantee when he borrows money from the company. When the borrower cannot repay the principal and interest of the loan due to maturity, the company has the right to dispose of its collateral as repayment of the principal and interest of the loan and related expenses.
Article 2 The mortgage loan shall be handled by the relevant state regulations, and the mortgage loan contract shall be signed based on equality and consultation.
Article 3 Scope of collateral: fixed assets with value and use-value by the law (such as houses and other above-ground buildings, means of transportation, machinery, and equipment); materials or properties that can be circulated and transferred.
If the house purchased with the preferential policies of the state is mortgaged, the mortgage amount shall be limited to the share of the mortgagor’s disposal and income; the enterprise legal person with a business period shall not exceed the business period of its house mortgage;
If a house with a land-use period is used as a mortgage, the mortgage period shall not exceed the remaining period after the period of use specified in the land use right assignment contract minus the period of use. If the house is mortgaged, the right to use the state-owned same time.
Article 4 Information to be provided by the mortgagor:
1. The mortgagor’s written application for agreeing to the mortgage and relevant certificates;
2. Qualifications of the mortgagor;
3. Proof of ownership (or right to dispose of) the collateral ;
4. The basic condition of the collateral;
5. other relevant information.
Article 5 Mortgage rate: according to the present value of the mortgage, the maximum value shall not exceed 70%.
Article 6 The mortgaged property shall be registered with its relevant departments according to law:
If the house is used as a mortgage, it must be registered with the real estate management department;
Those who use vehicles as collateral must go to the public security vehicle management department for registration;
Those who use machinery, equipment, and other materials as collateral must go to the industry and commerce administrative department for registration;
Mortgage items that are not registered by the above-mentioned registration department must go to the notary department to go through the notarization procedures.
When the above mortgages are registered with the relevant departments, in principle, asset evaluation and certification procedures must be issued, to facilitate the reasonable and legal processing of mortgage loans.
Article 7 Safekeeping of collateral: in principle, the collateral shall be properly kept and maintained by the mortgagor promptly, kept intact, and subject to inspection by the company at any time, and all expenses shall be borne by the borrower. During the mortgage period, the mortgagor shall not demolish, lease, transfer, or re-mortgage.
Article 8 Insurance of collateral:
The mortgage is used as the loan guarantee, and the borrower is required to apply for mortgage insurance in principle.
Article 9 After the borrower repays the principal and interest of the loan, it shall go through the formalities for the cancellation of the registration of the mortgaged property, and the mortgage loan contract shall be terminated.
Article 10 In the event of any of the following circumstances, the company has the right to deal with the collateral:
1. When the loan contract expires, the borrower maliciously evades the debt;
2. When the loan contract expires, the borrower is unable to repay the loan principal and interest;
3. If the borrower dies or disappears, and his legal heir refuses to repay the principal and interest of the loan.
Article 11 For the proceeds from the disposal of the collateral, the principal and interest of the loan shall be repaid after payment of relevant expenses. If the proceeds are insufficient, the company has the right to recourse until it is fully collected.
Article 180: The following properties that the debtor or a third party has the right to dispose of may be mortgaged:
(1) Buildings and other land attachments ;
(2) the right to use construction land ;
(3) The contractual management rights of wasteland and another land.;
(4) Production equipment, raw materials, semi-finished products, and products;
(5) Buildings, ships, and aircraft under construction;
(6) means of transportation.
(7) Other properties that are not prohibited by laws and administrative regulations from being mortgaged.
The mortgagor may mortgage the properties listed in the preceding paragraph together.
The property that can be mortgaged belongs to real estate. For movable property, the method of pledge and security is generally set, and the Property Law provides otherwise.
According to the scope of collateral, it can be roughly divided into six categories:
(1) Inventory mortgage, also known as commodity mortgage, refers to the use of various goods in the hands of industry and commerce, including commodities, raw materials, work-in-progress and finished products, to apply for loans from banks.
(2) Mortgage of customer accounts, which means that customers obtain short-term ;
(3) Securities mortgage, using various securities such as stocks, bills of exchange, promissory notes, certificates of deposit, bonds, etc. as collateral to obtain short-term loans;
(4) Mortgage of equipment, obtaining fixed-term ;
(5) Real estate mortgage, that is, the borrower provides real estate mortgages such as land, houses, etc. to obtain a loan;
(6) Mortgage of life insurance policy refers to the establishment of a mortgage right on the right to claim insurance money. It takes the surrender money of the life insurance contract as the limit and uses the insurance policy as the mortgage to issue loans to the insured.
Home Mortgage Loans vs Home Mortgage Loans
1. Different costs: mainly in terms of interest rates. For mortgage loans, commercial loans are also called personal housing loans. A mortgage loan refers to the loan obtained by the borrower from the bank with certain collateral as the guarantee. Interest rates are based on the benchmark interest rates stipulated by the People’s Bank of China. In the past, there were discounts on the mortgage loan interest rate for buying a house. Due to the tight policies and small quotas, the interest rate did not fall but rose. But the escalation of the mortgage is lower than the escalation of the mortgage.
2. The subjects of the legal relationship are different: in the mortgage relationship, if the debtor is the mortgagor, there are only two subjects of the legal relationship, the mortgagee and the mortgagor. In the mortgage relationship, there should be at least three legal relationship subjects, namely the mortgagor (the bank), the mortgagor (the buyer), and the third party (the original owner of the house).
3. The preconditions are different: the borrower needs to apply for a house mortgage loan from the bank, and the loan obtained from the bank is guaranteed by certain collateral as an item. The mortgage loan can be used for the purchase of a house or other purposes. A mortgage loan is a personal housing loan business in which buyers use the purchased house as a mortgage and the real estate company that purchases the house provides periodic guarantees, but it can only be used for house purchases.
Secured vs Unsecured
1. In terms of the nature of loans, unsecured loans are credit loans, and secured loans are guaranteed (or guaranteed) loans;
Second, in terms of loan interest rates, the interest rate of unsecured loans will be much higher than the interest rate of mortgage loans. The general interest rate will be 2-3 times the mortgage loan.
3. In terms of the loan term, the term of an unsecured loan is relatively short, generally no more than 3 years. Mortgage terms can be long or short, one year or as long as 20 years. Repayment pressure is low.
Fourth, in terms of the loan amount: The amount of unsecured loans is generally relatively small, and it is judged according to the lender’s salary, running water, liabilities, etc. This determines the loan amount.
Mortgage loans are mainly based on the value of the collateral to determine the loan amount. If the loan amount is relatively large, the repayment ability of the lender should also be considered.
5. In terms of the time of loan issuance, the approval time for unsecured loans is relatively short, generally 3-5 days to get the loan; for mortgage loans, it takes 2-3 weeks from approval-mortgage registration-disbursement. time.
Mortgage and Pledge
The same points of mortgage and pledge:
1. Mortgage loans and pledge loans refer to the loan obtained by the borrower from the bank with certain items as a guarantee. Both are the common lending forms of banks.
2. Mortgage and pledge are all guarantees. Guarantee refers to a system in which the law urges the debtor to perform the debt with the credit of the debtor or a third party or specific property to ensure the realization of the creditor’s rights by a specific creditor.
The difference between pledge and mortgage
(1) The guarantee items provided are different. The collateral for the mortgage is usually real estate (such as land, house), special movable property (cars, boats, etc.);
(2) The shape of the occupation tube is different. The mortgage does not transfer the possession of the collateral, and the mortgagor is still responsible for the custody of the collateral; the pledge changes the form of possession of the pledge, and the pledgee is responsible for the custody of the pledge. Example: I mortgaged my property, but the property remains in my possession and custody. If I pledge a deposit slip, the deposit slip is in the possession and custody of the creditor.
(3) Mortgage only has the effect of pure guarantee, and in the pledge, the pledgee not only controls the pledged property but also reflects the effect of lien.
(4) Disposal rights are different. If the debtor fails to repay the debt on time, the creditor does not have the right to directly dispose of the mortgaged property, and needs to negotiate with the mortgagor or pass an appeal to the court to complete the disposal of the mortgaged property; and the disposal of the mortgaged property does not require consultation or court judgment. The creditor can dispose of it at the time specified in the contract.