When applying for a loan, which properties cannot be mortgaged? Many consumers are familiar with the situation of tight funds. With the gradual popularization of bank personal consumption loans among the public, using loans to meet urgent financing needs has become one of the necessary means for many consumers to realize their consumption. However, when it comes to larger loan amounts (generally above 150,000 yuan), property or other collateral is often required to increase the feasibility of the loan. For common property mortgage loans, not all properties can be smoothly mortgaged. This issue has attracted much attention from many borrowers. Here, we will detail which properties do not have the qualifications for property mortgage loans.
The first category: Properties with outstanding loans cannot be re-mortgaged for another loan application. It should be noted that if the property is still under mortgage, then the mortgage right of this property actually belongs to the bank, which is equivalent to temporarily transferring the ownership. Although the borrower has the right to use it, they do not have full ownership and therefore do not have the authority to mortgage the property, making it impossible to apply for another loan with it.
The second category: Second-hand properties with too old age and too small unit size often lack the qualifications for mortgage loans. Most banks have strict requirements for the specifications of mortgaged properties. In general, properties with an area of 50 square meters and over 20 years old are considered difficult to liquidate by banks, thus making it hard to secure a mortgage loan. Of course, if the property is located in a major urban functional area, some exceptions may apply for loan approval.
The third category: Economically affordable housing that has not reached the five-year period lacks the qualification for mortgage loans. According to the regulations for economically affordable housing, the competent authority clearly states that only after five years does economically affordable housing (or price-limited housing) obtain the qualification for market transactions and complete the transfer of ownership. If the owner of an economically affordable house sells the property within five years, it will violate relevant regulations, making it impossible to achieve ownership transfer, let alone mortgage loan qualifications.
The fourth category: Small-property houses do not have the right to conduct property mortgage loan transactions. Named as small-property (or rural-property), but in reality, no property rights exist, this is the awkward situation of such properties. Without proof of ownership, these properties only have a sales contract from the seller and are not recognized by the housing management department. Such houses face significant risks if there are policy-related land planning situations. Therefore, financial institutions do not provide mortgage loans for such properties.
The fifth category: Some purchased public housing also cannot be mortgaged. Although most purchased public housing has been transferred to individual independent ownership, a few remain special cases. For example, some properties cannot provide purchase contracts or agreements; and central government-owned housing that cannot provide relevant certificates for listing on the market. Due to unclear ownership status, considering credit risk and liquidity, it is impossible to apply for a loan by mortgaging such properties.
If borrowers encounter large loans and need to provide property as collateral, they must verify their property type before applying for a loan from the bank to ensure it does not fall into any of the above five categories that cannot be mortgaged. If the property meets the mortgage qualifications and the borrower has good credit records and stable repayment ability, then applying for a property mortgage loan will become relatively easy and convenient. Clarifying the conditions of the collateral is a prerequisite for successful loan acquisition.
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