BBL Offering Condo Mortgages To Foreigners

[george]

BBL offering condo mortgages to foreigners

BANGKOK: -- Foreigners will find it easier to buy condominiums in Thailand under a new service offered by Bangkok Bank.

The bank's Singapore branch has begun offering offshore financing for foreigners seeking to purchase condominiums in Thailand.

Torphong Charungcharoenvijj, general manager for the Singapore branch, said loans of up to 70% of a condominium's value were available to foreigners both in Thailand and other countries who want to buy this type of property.

Applicants can e-mail their details or send them by DHL to the bank's Singapore branch, he said.

The applicant's earning ability determines how much he or she can borrow. For example a person seeking a loan to buy a condominium worth 20 million baht should be earning around 300,000 baht a month, Mr Torphong said.

While foreign nationals are allowed to purchase condominiums in Thailand, financing has often been problematic, with local financial institutions reluctant to offer loans due to uncertainties regarding credit risk.

The Bangkok Bank service is just what Phuket needs, according to Stephen O'Brien, managing director of the real estate agency Knight Frank Phuket

''Well over half of the inquiries we receive ask for lending or mortgagee finance and up until now there wasn't anything available, except a number of private firms offshore offering lines of credit or personal loan financing,'' he said.

''I am sure buyers will feel much more relaxed dealing with such a credible name as the Bangkok Bank, than an Isle of Man-registered company offering unattractive financing terms.''

Bearing in mind that the bank's terms apply to freehold condominium title, Mr O'Brien said he expected the takeup rate would be significant.

Under Thai Law, foreigners can own freehold title up to 49% of a condominium project. Generally speaking, when a condo project is launched, sales are always brisk, because foreigners want to hold their units as freehold. If the unit is in the remaining 51% allocation, foreign buyers can either lease or set up a Thai firm and hold freehold through that company, a rather cumbersome structure.

Mr O'Brien is confident that this is the start of more widely available mortgage financing for foreigners in Thailand.

''I suspect that other Thai banks will shortly start offering similar terms and conditions. All of this of course will result in a competitive environment bettering the consumer, whereby the banks will try to outdo one another with more favourable terms, similar to Australia and the UK.''

He said Thai property market had a good future because investors viewed the rental yields of 5-6% as attractive.

''Singaporeans are interested in Thai property because it is three times cheaper than what is available in their own country,'' he said.

--Bangkok Post 2005-06-22

[capt_canada42]

Most foreigners don't want Condo's in Phuket as most foreigners like to live with foreigners not live in something that is 51% owned by Thai's and is 51% occupied by Thai's, thus Apartments are the Hot Deal in Phuket.

[capt_canada42]

Many foreigners want mortgages to buy land or a house but so far we arn't allowed to be anything but 49% of a Condo project, we are 2nd class citizens in respect to owning anything. Yet Thai's are allowed to go to many of our countries and buy land, when is the public going to wake up and realize no one wants to take their country from them.

[jonny_large]

Totally agree with last post why we cannot own property ????

In England 30% of the residents are farang perhaps more where i used to live in Richmond London its full of Thais as is putney London, after the sars, chicken flu, collapse of s.e asian economy and finally tsunami when is Taksin gonna wake up to the fact that the world has changed and if Thailand dosen't sort us out finally we will go elsewhere, personally i don't lke to complain as Thailand is the most beautiful place i have seen (and i have seen the world..........jing jing) and i want to stay forever, i think that this or next year maybe we will have better status........due to relief etc etc.....slowly as before LOS has changed considerably from my first visit in 1990...for the better so fingers crossed it will change again, hopefully better for us.......i wish you all that stay here the best..Chokdee Krap

[khall64au]

Many foreigners want mortgages to buy land or a house but so far we arn't allowed to be anything but 49% of a Condo project, we are 2nd class citizens in respect to owning anything. Yet Thai's are allowed to go to many of our countries and buy land, when is the public going to wake up and realize no one wants to take their country from them.

<{POST_SNAPBACK}>

EARNING 300 000 BAHT A MONTH???? Not in this in this lifetime unless you're a property developer??!

[Rinrada]

The applicant's earning ability determines how much he or she can borrow. For example a person seeking a loan to buy a condominium worth 20 [/b]million baht should be earning around 300,000 baht a month, Mr Torphong said.

--Bangkok Post 2005-06-22

<{POST_SNAPBACK}>

So by the same defination anyone seeking to buy a condo for bt.2 m needs to be earning...bt.30 k a month.

[khall64au]

The applicant's earning ability determines how much he or she can borrow. For example a person seeking a loan to buy a condominium worth 20 [/b]million baht should be earning around 300,000 baht a month, Mr Torphong said.

--Bangkok Post 2005-06-22

<{POST_SNAPBACK}>

So by the same defination anyone seeking to buy a condo for bt.2 m needs to be earning...bt.30 k a month.

<{POST_SNAPBACK}>

[Khun Bob]

What are the benefits of borrowing from a Thai bank ?

Do they have really low interest rates ?

As i understand it - and i might be wrong - the thai authorities just want you to bring money in from outside of thailand. Of course if you borrow in currency other than baht there are currency changes (bvut this could work to your favour - currency that devalues to the currency you have/receive cash in). Also you may be lower interest rates and more flexibilty outside of thailand.

Or have i missed the point and this is firmly aimed at buy-to-let - so the thai's will have a property bubble just like in uk and us ?

[dazdaz]

I would guess that was a mistake and 30,000 was meant, perhaps George could clarify if this was a mistake ?

Anyway, sounds quite interesting. Although again it'd be nice to see a comparison with other countries in Asia, what their regulations are for foreigners buying property and the amount of hassles involved.

Is it me, or is there more of a united Asia in the last few years due to globalisation ?

I can see the Thai market becoming a very hot topic over the next few, this is just the beginning.

[Foggy Bottom]

BBL offering condo mortgages to foreigners

Torphong Charungcharoenvijj, general manager for the Singapore branch, said loans of up to 70% of a condominium's value were available to foreigners both in Thailand and other countries who want to buy this type of property.

The applicant's earning ability determines how much he or she can borrow. For example a person seeking a loan to buy a condominium worth 20 million baht should be earning around 300,000 baht a month, Mr Torphong said.

So applying the standard formulae for a 25 year mortgage ....

capital borrowed X interest rate/12 = gross monthly payment for interest

20,000,000 X (e.g.) 10%/12 = monthly repayment of 166,666.66 (interest)

capital borrowed / 600 (months in 25 years) = 33,333.33 capital repayment monthly

= total monthly payment tp mortgagee of 199,999.99 (call it 200K a month in repayments)

Drop that to 20K a month if only borrowing 2 million instead of 20 million

BUT - don't forget to factor in Life Assurance & Property Insurance which will be compulsory in the terms of borrowing - you could get rates for those off the internet somewhere.

Also remember they're only lending 70% so on a 2 million mortgage you'll be buying a property of 2,857,142 and will have to find the 857,142 in cash, plus legal fees and stamp duty etc etc etc. - budget on a million minimum in cash plus the mortgaged amount.

While foreign nationals are allowed to purchase condominiums in Thailand,.....

Bearing in mind that the bank's terms apply to freehold condominium title, Mr O'Brien said he expected the takeup rate would be significant.

Under Thai Law, foreigners can own freehold title up to 49% of a condominium project. Generally speaking, when a condo project is launched, sales are always brisk, because foreigners want to hold their units as freehold. If the unit is in the remaining 51% allocation, foreign buyers can either lease or set up a Thai firm and hold freehold through that company, a rather cumbersome structure.

But they cannot own any of the ground floor of the property - so no pool-side condos in farang hands unless it's in a roof above the ground floor.

''I suspect that other Thai banks will shortly start offering similar terms and conditions. All of this of course will result in a competitive environment bettering the consumer, whereby the banks will try to outdo one another with more favourable terms, similar to Australia and the UK.''

He said Thai property market had a good future because investors viewed the rental yields of 5-6% as attractive.

''Singaporeans are interested in Thai property because it is three times cheaper than what is available in their own country,'' he said.

--Bangkok Post 2005-06-22

<{POST_SNAPBACK}>

So - let's see - only available through the Singapore branch - Singaporean property is 3 times the price of Bangkok property - all documents must go to Singapore ........ I think I'm getting the picture here ...... Singaporeans are not that physically different to Thais and so will be more accepted as the absentee landlords charging rack-rental agreements to stupid caucasians?

[kidtongue]

BBL offering condo mortgages to foreigners

BANGKOK: -- Foreigners will find it easier to buy condominiums in Thailand under a new service offered by Bangkok Bank.

The bank's Singapore branch has begun offering offshore financing for foreigners seeking to purchase condominiums in Thailand.

Torphong Charungcharoenvijj, general manager for the Singapore branch, said loans of up to 70% of a condominium's value were available to foreigners both in Thailand and other countries who want to buy this type of property.

Applicants can e-mail their details or send them by DHL to the bank's Singapore branch, he said.

--Bangkok Post 2005-06-22

<{POST_SNAPBACK}>

Why does no one even question why BBL is lending off-shore? Could it be because BoT regulations won't let them do it in-country? Oh no, tell me it ain't so Dorothy. As HSBC said"We're more than pleased to make a mortgage for you and will do so as soon as you establish an account at this branch with a deposit equivalent to the purchase price."

After all, property prices *never* fall in Thailand, right? Hmmm, just wondering if sending the money out of the country to Singapore to buy the condo is going to trigger the money laundering folks and resultant forfeiture...nah,never happen, right?

[expatinasia]

"Singaporeans are not that physically different to Thais"

You don't even try to hide the fact that you're a racist. PLEASE, go home.

[jbsears]

There is no need to call anyone a racist. He made an obvious observation. Singaporeans and Thais look alike. Where is the racism there? He may have made a generalization about nationalities, but hey, let it slide. Don't know if your American, but it seems like Americans are so politically correct these days that they can't just take an opinion as an opinion. Relax, it's all good.

Have a good day both of yall and don't want to make either of yall made. Just had to throw in my own two cents.

[subbuteo]

There is no need to call anyone a racist. He made an obvious observation. Singaporeans and Thais look alike. Where is the racism there? He may have made a generalization about nationalities, but hey, let it slide. Don't know if your American, but it seems like Americans are so politically correct these days that they can't just take an opinion as an opinion. Relax, it's all good.

Have a good day both of yall and don't want to make either of yall made. Just had to throw in my own two cents.

<{POST_SNAPBACK}>

many europeans/US expats living long term (decades) in Singapore actually become citizens because their taxes back home are high and they feel comfortable there. Some of them are British pilots who never went home after the war. So they don't look anything like thai.

Edited June 23, 2005 by subbuteo

[TokyoT]

BBL offering condo mortgages to foreigners

BANGKOK: -- Foreigners will find it easier to buy condominiums in Thailand under a new service offered by Bangkok Bank.

The bank's Singapore branch has begun offering offshore financing for foreigners seeking to purchase condominiums in Thailand.

Torphong Charungcharoenvijj, general manager for the Singapore branch, said loans of up to 70% of a condominium's value were available to foreigners both in Thailand and other countries who want to buy this type of property.

Applicants can e-mail their details or send them by DHL to the bank's Singapore branch, he said.

--Bangkok Post 2005-06-22

<{POST_SNAPBACK}>

Why does no one even question why BBL is lending off-shore? Could it be because BoT regulations won't let them do it in-country? Oh no, tell me it ain't so Dorothy. As HSBC said"We're more than pleased to make a mortgage for you and will do so as soon as you establish an account at this branch with a deposit equivalent to the purchase price."

After all, property prices *never* fall in Thailand, right? Hmmm, just wondering if sending the money out of the country to Singapore to buy the condo is going to trigger the money laundering folks and resultant forfeiture...nah,never happen, right?

<{POST_SNAPBACK}>

I share in the confusion.

Why does Bangkok Bank want/need to use its branches in Singapore to make loans to farang for condos in Thailand? Does anyone know if there is some BOT regulation that would prevent a bank in Thailand to provide this type of service?

I mean wouldn’t a Thai bank have a higher level of protection by keeping all legal aspects of the situation in Thailand. Seems to be it would be more difficult and more expensive to “foreclose” or attempt alternative actions on a bad load based in Singapore for a condo that is in Thailand.

[hutspot]

Basically a foreigner can get a loan/mortgage for any property BUT he cannot own it unless for 49% and 51% to his partner, you have a substantial income and onlyu upto 70-75-80% depending on the Bank.

In the condo case you can own it 100% and you can get a mortgage to purchase it all be-it upto 80% of the value

A this moment the rate is 6% (including pay-back of the loan)

For example a 2MIO thb condo, you can only borrow 80% = 1.6 mio thb * 6% =

96.000 thb per year= 8.000 thb per month. There is also a 35.000 tax dedecution possible so you would net pay 5084 thb per month from you 30.000 thb income.

I still think that is a a nice sum, and you absolutely cannot rent anything of that value at that price.

[trajan]

Basically a foreigner can get a loan/mortgage for any property BUT he cannot own it unless for 49% and 51% to his partner, you have a substantial income and onlyu upto 70-75-80% depending on the Bank.

In the condo case you can own it 100% and you can get a mortgage to purchase it all be-it upto 80% of the value

A this moment the rate is 6% (including pay-back of the loan)

For example a 2MIO thb condo, you can only borrow 80% = 1.6 mio thb * 6% =

96.000 thb per year= 8.000 thb per month. There is also a 35.000 tax dedecution possible so you would net pay 5084 thb per month from you 30.000 thb income.

I still think that is a a nice sum, and you absolutely cannot rent anything of that value at that price.

<{POST_SNAPBACK}>

For such low monthly payments, I think you are assuming a 20 yr (or so) mortgage term right?? I was only able to get a 10 yr mortgage term from HSBC cause Im a foreigner. Do you get longer terms from Bangkok Bank or others?

[trajan]

many europeans/US expats living long term (decades) in Singapore actually become citizens  because their taxes back home are high and they feel comfortable there. Some of them are British pilots who never went home after the war. So they don't look anything like thai.

<{POST_SNAPBACK}>

US expats are taxed in the US on their worldwide income so it doesnt make a difference if the income tax rate is lower in Singapore (but there's a US$80,000 foreign income tax exclusion and also foreign tax credits which help ease the pain)

Edited June 23, 2005 by trajan

[johnh101]

Lets not get too excited about this. The maximum mortgage is 70% and the minimum amount they will lend is $100,000. And the maximum period is only 10 years.

So unless you are looking at property over 6 million Baht it is of no use to you.

See Below

FINANCING CONDOMINIUM PROPERTY

TERMS FOR FINANCING OF RESIDENTIAL PROPERTY IN THAILAND

Purpose

To finance the purchase of freehold condominium property in Thailand.

Loan Quantum- Up to 70% of the purchase price

Maximum loan amount - S$1,000,000 or equivalent amount

Minimum loan amount - S$100,000 or equivalent amount

Note : Drawdown quantum shall be the lowest of

a) amount as per approved limit

b. Up to 70% of purchase price of property, when converted at our exchange rate prevailing upon drawdown

c) 90 % of the appraised value upon completion by our appointed valuer

Security : Legal mortgage of property to be financed

Loan Tenure : Max 10 years

Currency : The loan shall be denominated in SGD, USD or any other currency acceptable to the bank

Interest Rate (Subject to changes at Bank’s discretion)

Loan in SGD – Bangkok Bank’s Prime Lending Rate per annum(currently 6% )

Loan in USD – US Prime + 0.5% per annum(currently 6%+0.5% =6.5%)

Loan in other currency – To be advised

Repayment : Repayment of principal and interest is by monthly installment and to commence one month

from date of disbursement of loan.

Drawdown

Loan shall be drawdown only upon payment by the borrower of the difference between the purchase price and the loan amount, subject to completion of loan documents and fulfillment of the conditions precedent.

Prepayment

Prepayment of loan allowed subject to payment of 1.5% flat on the loan amount to be prepaid.

Processing Fee

Processing fee of S$5,000 or equivalent amount is payable upon acceptance of our letter of offer and S$2,000 or equivalent amount shall be refunded upon drawdown of the loan.

Expenses

All expense such as legal/mortgage costs , valuation fee and fire insurance premium etc shall be payable by borrower.

Documents Required

i) Completed Loan Application Form

ii) Copy of identification card(front and back)/passport

iii) Last two years’ income tax return

iv) Last two years’ Balance Sheet & Profit &Loss Statements(For self-employed borrower)

v) Option to purchase or Sales & Purchase Agreement

vi) Employer’s letter addressed to Bangkok Bank Public Co Ltd (Singapore) confirming position, years of service and remuneration

vii) Bank’s Reference letter addressed to Bangkok Bank Public Co Ltd (Singapore) confirming banking relationship, conduct/type of account and size of loan/deposit with the bank.

viii) Last 6 months bank statements

ix) Others upon request

Note : Approval of loan subject to evaluation of applicant’s financials standing and repayment ability

For enquiries : [email protected] Tel : 65-6410 0400

For more information contact : Narumon Chartvivatpornchai [[email protected]]

Edited June 23, 2005 by johnh101

[Rinrada]

100,000 Singapore Dollar = 32,845.4 British Pound

[brubo1]

more importantly: 100000 Singapore dollars = 2'456'000 Thai Baht

[johnh101]

Sh1t........sorry ! !

I didn't notice it was Sing Sing Dollars

But you are still looking at properties in excess of 3.5 million baht

Edited June 23, 2005 by johnh101

[satu]

if you own a condominium, worthy 20 mio baht, you will get a resident visa? or you have to do a visa trip every month?

[EmptyMind]

many europeans/US expats living long term (decades) in Singapore actually become citizens  because their taxes back home are high and they feel comfortable there. Some of them are British pilots who never went home after the war. So they don't look anything like thai.

<{POST_SNAPBACK}>

US expats are taxed in the US on their worldwide income so it doesnt make a difference if the income tax rate is lower in Singapore (but there's a US$80,000 foreign income tax exclusion and also foreign tax credits which help ease the pain)

<{POST_SNAPBACK}>

Thats because America want's to rule to world and they need to pocket all of the cash they can even if you leave the country to fund this. Thank the lord I was not born in that place.

Why did pple vote for Bush LOL ? Should have called him Hitler.

[toni157]

Isn't it obvious why BAngkok Bank is trying to prop up the hugely oversaturated condo market in Thailand? The real question is why they are offering SGD loans through an offshore branch of the leading commercial bank, anyone remember pre 97 when they were desperate to offer USD and GBP linked loans?

Get ready for a "controlled" THB devaluation and watc out for a significant readjustment of the property market.

[MaiChai]

20M baht for a condo? Thats one heck of a condo! Considering you can build a house up country for 300,000 baht upwards. This is just silly pie in the sky talk. Anyone who takes this as a serious financial deal needs there head examining.

Edited June 23, 2005 by MaiChai

[toni157]

Well, the Thai property mar right market is a bubble market right now, I know plenty of people laying down between 10 -30million baht in Bangkok right now

[wilkie]

BBL offering condo mortgages to foreigners

BANGKOK: -- Foreigners will find it easier to buy condominiums in Thailand under a new service offered by Bangkok Bank.

The bank's Singapore branch has begun offering offshore financing for foreigners seeking to purchase condominiums in Thailand.

Torphong Charungcharoenvijj, general manager for the Singapore branch, said loans of up to 70% of a condominium's value were available to foreigners both in Thailand and other countries who want to buy this type of property.

Applicants can e-mail their details or send them by DHL to the bank's Singapore branch, he said.

The applicant's earning ability determines how much he or she can borrow. For example a person seeking a loan to buy a condominium worth 20 million baht should be earning around 300,000 baht a month, Mr Torphong said.

While foreign nationals are allowed to purchase condominiums in Thailand, financing has often been problematic, with local financial institutions reluctant to offer loans due to uncertainties regarding credit risk.

The Bangkok Bank service is just what Phuket needs, according to Stephen O'Brien, managing director of the real estate agency Knight Frank Phuket

''Well over half of the inquiries we receive ask for lending or mortgagee finance and up until now there wasn't anything available, except a number of private firms offshore offering lines of credit or personal loan financing,'' he said.

''I am sure buyers will feel much more relaxed dealing with such a credible name as the Bangkok Bank, than an Isle of Man-registered company offering unattractive financing terms.''

Bearing in mind that the bank's terms apply to freehold condominium title, Mr O'Brien said he expected the takeup rate would be significant.

Under Thai Law, foreigners can own freehold title up to 49% of a condominium project. Generally speaking, when a condo project is launched, sales are always brisk, because foreigners want to hold their units as freehold. If the unit is in the remaining 51% allocation, foreign buyers can either lease or set up a Thai firm and hold freehold through that company, a rather cumbersome structure.

Mr O'Brien is confident that this is the start of more widely available mortgage financing for foreigners in Thailand.

''I suspect that other Thai banks will shortly start offering similar terms and conditions. All of this of course will result in a competitive environment bettering the consumer, whereby the banks will try to outdo one another with more favourable terms, similar to Australia and the UK.''

He said Thai property market had a good future because investors viewed the rental yields of 5-6% as attractive.

''Singaporeans are interested in Thai property because it is three times cheaper than what is available in their own country,'' he said.

--Bangkok Post 2005-06-22

<{POST_SNAPBACK}>

Does this meen I can have a mortgage in Thailand even though I'm living and working for 6mths of the year in the u.k.

[Heng]

many europeans/US expats living long term (decades) in Singapore actually become citizens  because their taxes back home are high and they feel comfortable there. Some of them are British pilots who never went home after the war. So they don't look anything like thai.

US expats are taxed in the US on their worldwide income so it doesnt make a difference if the income tax rate is lower in Singapore (but there's a US$80,000 foreign income tax exclusion and also foreign tax credits which help ease the pain)

Of course it matters. If you're living overseas and don't have your address listed anywhere, how is anyone going to serve you an IRS summons? Hundreds of thousands of Americans are incorporated in the Caribbean, bank in Europe, and live in Asia just for that reason.

[Sophon]

Why does no one even question why BBL is lending off-shore? Could it be because BoT regulations won't let them do it in-country?

<{POST_SNAPBACK}>

I share in the confusion.

Why does Bangkok Bank want/need to use its branches in Singapore to make loans to farang for condos in Thailand? Does anyone know if there is some BOT regulation that would prevent a bank in Thailand to provide this type of service?

I mean wouldn’t a Thai bank have a higher level of protection by keeping all legal aspects of the situation in Thailand. Seems to be it would be more difficult and more expensive to “foreclose” or attempt alternative actions on a bad load based in Singapore for a condo that is in Thailand.

<{POST_SNAPBACK}>

It could simply be because in order for you to have your deed registered, the money for the condo needs to come from outside Thailand, and to be transferred in foreign currency. If you borrowed the money from a Thai Branch of Bangkok Bank, you probably wouldn't be able to get a certificate of remittance (formerly TT3).

Sophon