For borrowers who have reached the maturity date of their loan, mortgage release is a crucial process. Many people are unfamiliar with the mortgage release procedure for red books. Today, we will provide a detailed guide on the latest red book mortgage release process.
1 What is a Mortgage Release? What is the Procedure for Releasing a Red Book Mortgage?
Mortgage release refers to the removal of a mortgage on a property held by a bank once the loan obligations secured by that property have been fulfilled. It is mandatory to undergo the mortgage release process once the loan principal has been fully repaid to the bank.
Red Book Mortgage Release Procedure
The red book mortgage release procedure, also known as red book mortgage removal, involves lifting the mortgage on the land-use right and any assets attached to the land once the secured debt obligations have been fulfilled. Additionally, certain procedures must be carried out with the relevant authorities to remove the mortgage information recorded in the red book.
2 When is the Red Book Mortgage Release Procedure Necessary?
Instances Requiring Red Book Mortgage Release
According to Clause 1, Article 21 of Decree 102/2017/ND-CP dated September 1, 2017, the following cases are eligible for mortgage release:
- When an individual wants to remove the mortgage and has fully repaid the principal and interest to the bank.
- When an individual wishes to replace the current mortgaged asset with another asset of equivalent value.
- When an individual intends to borrow capital from another bank.
- When an individual wants to retrieve the red book to sell or transfer ownership.
Note: Real estate investors must release the mortgage on a condo before selling it to another party if the condo was previously mortgaged to a bank. Therefore, prospective condo buyers should carefully investigate whether the project was previously mortgaged to avoid losing money without acquiring the property.
3 Red Book Mortgage Release Documents
Land-Use Right Certificate
The preparation of documents for the red book mortgage release is governed by Article 47 of Decree 102/2017/ND-CP and Article 26 of Inter-ministerial Circular No. 09/2016/TTLT-BTP-BTNMT. The required documents include:
- Original request for cancellation of mortgage registration.
- Original land-use right certificate and ownership of houses and other assets attached to the land.
- Identity card or citizen identification of the mortgagor.
- Agreement to cancel the land mortgage or confirmation of mortgage release from the mortgagee if the request for cancellation of registration is signed only by the mortgagor.
- Documents proving exemption from land mortgage registration fees, if applicable. In case of authorization, a power of attorney must be provided.
4 Detailed Guide to Red Book Mortgage Release Procedure at the Bank
Land Registration Office
The steps to follow for the red book mortgage release procedure at the bank are as follows:
Note: During the processing of the procedure, individuals may be required to pay certain fees, such as notarization fees and administrative fees.
We hope that through this article, you now have a better understanding of the red book mortgage release procedure.
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