land expropriation

**Ms. Chen recently called our law firm. A few years ago, Ms. Chen took a loan of 400,000 yuan from the bank to buy a house. Now the loan has only been changed a few years ago, but the house is about to be demolished. Ms. Chen’s confusion is that the house is about to be demolished before the mortgage loan is repaid. Do she still need to pay back the mortgage? If the community is demolished, will the house I buy be my first home? When it comes to mortgage issues, the situations in which owners choose "monetary compensation" and "property rights replacement" are different.

1. A house purchased with a mortgage is equivalent to a mortgage to a bank. The bank is the mortgagee. If the mortgage disappears because the house is demolished, then the bank's mortgage will also disappear. However, the mortgagee's bank has priority in repaying the proceeds from the mortgage. In other words, after the owner receives the demolition compensation, he must first repay the bank loan.

Because the demolition party can only obtain the right to demolish the house after signing a demolition and resettlement compensation agreement with the owner, the demolition party will take the initiative to help the owner repay the bank loan for the owner who chooses monetary compensation, and then deduct it from the resettlement compensation. 2. For the owner who chooses property rights replacement, the demolition party should assist them in converting the house originally mortgaged to the bank into a resettlement house, and then sign a new loan agreement.

Questions about which house to buy? In this regard, we learned from many banks that if owners who have received house demolition compensation want to purchase a new commercial house, the bank will process the loan as a second home loan because the credit information system of the People's Bank of China will show that the owner has applied for a first home loan and will not disappear with the demolition.

From the above analysis, it can be seen that if the house with unpaid loan is demolished, the owner does not need to worry too much. Generally speaking, the demolisher will help the owner deal with the debt problem with the bank. However, if the owner wants to buy another house, it will be regarded as a second house by the bank, and he will need to bear more in terms of loan interest rate and down payment ratio.

The legal knowledge in this article does not represent legal advice. If you encounter similar problems, you should analyze them in detail. If you want to know more about this, you can consult a lawyer on this site for one-on-one online consultation.