How much money can you borrow with a red book mortgage? Conditions, limits and notes

Among the forms of loans, red book mortgage is always considered a safe and effective solution thanks to the valuable collateral. So how much money can I borrow with a red book mortgage? What are the conditions and incentives? Let's find the answer with SeABank through this article.

1. Maximum red book mortgage loan limit 70 - 80% collateral value

Currently, credit institutions lend red book mortgages with a maximum amount of money from 70% - 80%. The value of the collateral is assessed. Some banks support customers to borrow up to 100% of the property value. If the lender is an individual, the maximum loan amount will depend on the agreement between the parties.

The term of a red book mortgage loan can be extended up to 10 - 20 years. The longer the loan term, the more interest you have to pay, but the monthly repayment burden will be lighter. Conversely, if you choose a shorter loan term, you will pay off the debt faster, but the monthly repayment burden will be greater.

However, the limit is also determined by the following factors:

• Loan usage plan
• Credit history
• Loan products of each bank

For example: A person mortgaged a piece of land with a red book at bank A with a need to borrow about 300 million in 5 years. After appraisal, the land was valued at 600 million VND and bank A lent a maximum of 70% of the property value, equivalent to 420 million VND. Depending on the loan product, the borrower will have to pay about 7.5 million VND/month.

2. Conditions for red book mortgage loan

Each bank has different conditions for red book mortgage loans. Some basic conditions include:

• Vietnamese citizens or foreigners living in Vietnam.
• From 18 years of age or older, some banks stipulate the maximum age is from 60 - 75 years old at the time of loan or the end of the loan credit term.
• Good credit history, ability to repay debt.
• Have registered permanent or temporary residence address or regular work address at the location of the bank's transaction office/branch.
• Legal red book, full legal value.

If you need capital for business, home purchase or consumption, choose to mortgage your red book at SeABank. With simple conditions, competitive interest rates, a limit of up to 90% of the property value and a maximum loan term of 20 years, SeABank is a reliable address chosen by many customers when they need to borrow capital. Contact SeABank now for advice and quick disbursement!

3. Red book mortgage loan process

3.1. Prepare documents

To mortgage a red book, customers need to fully prepare the following documents:

• Personal documents
  • Valid ID card/CCCD or passport.
  • Household registration book/temporary residence certificate (KT3).
  • Marriage certificate or certificate of celibacy (if any).
• Documents related to collateral
  • Original red book (Certificate of land use rights).
  • Documents proving that the property is not in dispute and not subject to seizure.
    Consent document of co-owners (if the red book is in the name of many people).
• Other documents depending on the purpose and loan product
  • Proof of income: employment contract, pay statement, financial statement or business contract.
  • Documents related to loan purposes: home purchase contract, capital use plan, related invoices and documents.

3.2. Loan processing

Mortgage borrowers can carry out simple loan procedures at the bank or online:

• Direct loans: Customers come directly to the bank to get advice, receive application forms and instructions on how to prepare documents. After submitting all required documents, the bank will evaluate the documents and make a decision to approve or reject.
• Online loans: Customers access the bank's website or application and register for an account. Then, customers fill in all the information and upload the required documents and files according to the system's requirements. The bank will conduct an online application review and respond with the results via email or SMS.

4. How to calculate mortgage interest on red book

Red book mortgage interest rates range from 6% - 12%/year and will change depending on the following factors:

• Customer's financial situation: Income, credit history, ability to repay debt.
• Bank policy: Each bank applies different incentives and interest rates.
• Regulations of the State Bank: Interest rate ceiling for each period.
• Loan application: Purpose of loan, type of loan product, value of collateral.

Currently, the method of calculating interest based on the decreasing balance is applied by many banks. Accordingly, the interest rate is calculated based on remaining principal balance after each payment period, instead of the entire initial loan. This calculation helps to gradually reduce the amount of interest payable over time, reducing financial pressure for customers.

Formula for calculating interest on decreasing balance:

For example: Customer A borrows 90,000,000 VND, with a term of 18 months and an interest rate of 10%/year

• Monthly principal payment = 90,000,000 / 18 = 5,000,000 VND
• First month's interest = (90,000,000 x 10%) / 18 = 500,000 VND
• Second month interest = (90,000,000 - 5,000,000) x 10% / 18 = 470,000 VND
• Interest for the third month = (90,000,000 - 5,000,000 - 5,000,000) x 10% / 18 = 444,444 VND

The following months are calculated similarly to the above bank loan interest calculation until the debt is paid off.

5. Notes when borrowing with red book mortgage

When taking out a loan using a red book as collateral, customers need to pay special attention to the following points to avoid risks:

• Ensure the red book is fully legal and has no disputes: The red book must be original, valid, not seized, mortgaged or have land use rights disputed. This is a prerequisite for loan application to be approved.
• Choose the appropriate loan term and loan amount: Consider your actual needs and repayment ability to choose a reasonable loan term. Borrowing too much money or for too long can cause financial pressure.
• Guarantee of payment capacity: Monthly income must be stable and sufficient to pay principal and interest. Banks often recommend that the debt repayment ratio should account for a maximum of 40% - 50% of the customer's income.
• Carefully review the contract, interest rates and prepayment penalties: Carefully check the terms of fixed/flexible interest rates, management fees, as well as early termination penalties to have a suitable financial plan.
• Choose a reputable bank: You should choose a bank with a strong brand, transparent policies, good customer support and competitive interest rates to ensure long-term benefits.

One of the ideal suggestions when you need a mortgage loan is SeABank. This is a reliable address that many customers trust and choose when they need a loan.

Special offers for customers when mortgaging red books at SeABank:

• Maximum loan limit is up to 85 - 90% of mortgage value, helping customers access large loan sources.
• Competitive interest rates help customers save on interest costs.
• Loan term is flexible according to customer's payment ability, up to 20 years.
• Simple loan application procedure, quick approval and disbursement process.
• Get support and advice from dedicated staff.

Above is the information to answer the question How much money can I borrow with a red book mortgage? In general, if you have legal assets, suitable needs and repayment ability, mortgage loans will be the ideal loan channel thanks to simple procedures, attractive interest rates and long loan terms.

If you want to learn more about SeABank's loan packages, you can contact the nearest transaction point or call Hotline 1900 555 587 or visit the website www.seabank.com.vn for more details.