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Can rural land be used for mortgages?

Time: 2015-04-08         Source: Rong 360         Author: Li Zhijie

People often think of loans when they are in a hurry, and loans generally have no mortgages or mortgages. Generally speaking, mortgage loans are easier to lend because of collateral, and unsecured loans are subject to strict approval by personal credit. Therefore, people like to apply for mortgage loans when they borrow. So the question is, can rural land be used to apply for a mortgage?

A mortgage is a loan that the borrower guarantees to the bank with a certain amount of collateral as an item. It is a form of lending by banks, and collateral usually includes securities, national bonds, various stocks, real estate, and bills of lading, stacks, or other documents that prove ownership of the goods. When the loan expires, the borrower must return it in full, otherwise the bank has the right to deal with the collateral as a kind of compensation.

A collateral is a collateral that the debtor (the mortgagor) transfers to the creditor (the mortgagee) in order to guarantee the performance of an obligation. It can be tangible property or registered intangible property such as land rights, government bonds, life insurance, etc. In some countries it is divided into movable property collateral and real estate collateral. The former is movable, including negotiable instruments and title documents. The latter are like land and buildings. China does not distinguish between mortgage rights and pledges. According to the provisions of the General Principles of the Civil Law, where property is provided as security, whether it is real property, movable property or securities, whether or not it is transferred, the property is called collateral.

Unsecured property includes:

(1) Land ownership:

(2) Collectively owned land use rights such as cultivated land, house sites, self-retained land, and self-retained mountains, except as provided in Article 34 (5) and Article 36, paragraph 3 of this Law;

(3) Educational facilities, medical and health facilities and other social welfare facilities of public institutions, kindergartens, hospitals, etc. for public welfare purposes;

(4) Property that has unknown ownership or use rights or is controversial;

(5) Property that has been seized, detained or supervised according to law;

(6) Other property that cannot be mortgaged according to law.

China's current law stipulates that the right to use land can be mortgaged. According to the laws of China, the transfer of land use rights is the responsibility of the municipal and county people's governments. The land use right mortgage loan is one of the main ways for real estate companies to obtain loans. After the developer obtains the right to use the developed land through its own funds, it can mortgage the land use right to the bank, obtain the loan funds, and then use the funds. Investing in development and construction, returning funds through pre-sale of commercial housing and returning loans. Therefore, it is not feasible if the farmers want to mortgage their land.

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