Housing loan policy ‘too good to be true’

 

Pan Moosi, a member of the network of railway communities and homeless people in Khon Kaen’s Nakhon Khon Kaen Municipality, sits in front of his makeshift home and says he welcomes the plan to provide housing loans to low-income earners.

 

Proposal to help low-income earners raises question on practicability.

 

THE GOVERNMENT’S proposed policy to provide housing loans to low-income earners sounds too good to be true.

 

So, while many cash-strapped people are quick to embrace it, several others have had strong doubts as their community leader has raised concerns about the policy’s practicality. 

 

“I don’t have stable income. So, I really don’t think that a bank will give me a loan,” Thongyoi Wongsa, 56, said yesterday from her community in Khon Kaen province. 

 

Finance Minister Apisak Tantivorawong recently revealed that the Government Housing Bank (GHB) would implement a special housing-loan programme for welfare-card holders. 

 

“The repayment term will be up to 40 years, with a fixed interest rate of just 2.75 per cent during the first four years for a loan amount not exceeding Bt1 million,” he said. 

 

He added that for loans exceeding Bt1 million but not over Bt2 million, the fixed interest rate would be at 3 per cent per annum during the first four years. 

 

Welfare cards have been issued to more than 10 million Thais, each of whom earn less than Bt100,000 a year. 

 

While the housing-loan project looks very tempting, Thongyoi still doubts whether it will really reach the poor. 

 

“Although I am paid Bt3,000 a month, my job is not of a permanent type,” she said. “Will any bank grant me a loan?”

 

Thongyoi works as a road sweeper without any guaranteed income.

 

Her family has rented space from the State Railway of Thailand (SRT) at the rate of Bt1,950 a year and her house is a part of a railway-side community. 

 

“We don’t have housing security because the SRT may ask us to relocate if it needs land to develop its dual-track railways,” Thongyoi said. 

 

Jitti Cherdchu, who heads the Teparak Community in Khon Kaen, said he believed the bank would require guarantors and collateral before approving loans. 

 

“Besides, the government would do better to focus on occupational and skill development for the urban poor,” he said. “That would be a long-term solution to various problems including housing and debts.” 

 

Jitti argued that better skills would increase the urban poor’s job opportunities and likely raise their income. 

 

“When they have enough income, they will be able to apply for housing loans,” Jitti said. “Without raising their incomes, the purchase of a house will only increase their debts”. 

 

Nongkran Pamara, a worker at a fresh market in Phayao province, said she had heard about the project but had no idea how she could really take part in it.

 

“I have not heard any detail,” she said. 

 

She said like most other daily-paid workers, she had to rent a room because she could not take out a housing loan. 

 

“Instead of just paying rent, if we can pay money and own our housing unit in the end, that would be good,” she said. 

 

Nongkran said if she was allowed to take the housing loan under the project for welfare-card holders, she would definitely join in.

 

Source: http://www.nationmultimedia.com/detail/national/30335630

 

-- © Copyright The Nation 2018-01-08

3 hours ago, webfact said:

“The repayment term will be up to 40 years, with a fixed interest rate of just 2.75 per cent during the first four years for a loan amount not exceeding Bt1 million,” he said. 

And and after 4 years? 

Edited January 8, 20188 yr by SABloke

One of the best descriptions I ever read about banks,  an organisation that will give you an umbrella when the sun is shining then take it back when the rain starts.

If this goes ahead I can see a run on people taking their savings out

of GHB ,the risks for the bank and depositors is just too great,but the

Government will push them to implement  the loan scheme,as a populist 

policy as an election maybe on the horizon.

regards worgeordie

8 minutes ago, worgeordie said:

If this goes ahead I can see a run on people taking their savings out

of GHB ,the risks for the bank and depositors is just too great,but the

Government will push them to implement  the loan scheme,as a populist 

policy as an election maybe on the horizon.

regards worgeordie

They'd be to daft to do that as half of them mortgage/hock their land/house for some family member to start a business or ect & end up being left high & dry

So, this 'lucky' poor guy will only be about 96 when he finishes his 40 year mortgage !! And that's assuming he is still working at that age ! They need some cheap social housing   - not cheap mortgages 

2 hours ago, SABloke said:

And and after 4 years? 

These "cheap loans "look so attractive to poor people the can't count. 

Over the course of 40 years, they end up paying 2 or 3 million back. 

After 40 years, the house will be worth less than a third what they paid for it. 

 

1 hour ago, RichardColeman said:

So, this 'lucky' poor guy will only be about 96 when he finishes his 40 year mortgage !! And that's assuming he is still working at that age ! They need some cheap social housing   - not cheap mortgages 

 

They only give home loans lasting until the borrower is age 60.

To get a 40 year loan it would need to be to a person aged 20.

Edited January 8, 20188 yr by MaeJoMTB

1 hour ago, worgeordie said:

If this goes ahead I can see a run on people taking their savings out

of GHB ,the risks for the bank and depositors is just too great,but the

Government will push them to implement  the loan scheme,as a populist 

policy as an election maybe on the horizon.

regards worgeordie

Since Prayut came to power, he has used State-owned GHB frequently as a conduit for government funds from the Thai treasury to offer populist programs such as no collateral soft loans, debt forgiveness and loan guarantees. From that perspective depositors per se aren't really at risk. Who is at risk is the Thai taxpayers who fund the treasury.

Edited January 8, 20188 yr by Srikcir

Social housing is a well trodden international path.  There are some good solutions out there for those who can read !!??

How does a welfare card holder qualify for a loan when up to a third of their income is interest alone.

 

 

4 hours ago, overherebc said:

One of the best descriptions I ever read about banks,  an organisation that will give you an umbrella when the sun is shining then take it back when the rain starts.

Better  policy if  u cant afford it dont ferking  buy  it, worked for me all my  life and  followed by if  u really want it work HARD and  "save"  for it over many years.

 It makes it more worthwhile when you actually  get it and also makes you "take care"  of  it, something these  days sadly  lacking where they just dont take care of ANYTHING yet "expect" everything.

I dont believe a  lot of  this  "poor " BS, replace poor  with bone idle/unwilling to make the effort in many cases, sure there are the odd exceptions.

Never  learn, nothing is easy in life it doesnt come without a lot of effort in most cases.

Edited January 8, 20188 yr by gunderhill

8 hours ago, webfact said:

Jitti Cherdchu, who heads the Teparak Community in Khon Kaen, said he believed the bank would require guarantors and collateral before approving loans. 

 

“Besides, the government would do better to focus on occupational and skill development for the urban poor,” he said. “That would be a long-term solution to various problems including housing and debts.” 

 

Jitti argued that better skills would increase the urban poor’s job opportunities and likely raise their income. 

 

“When they have enough income, they will be able to apply for housing loans,” Jitti said. “Without raising their incomes, the purchase of a house will only increase their debts”. 

It’s a really sad indictment, when the potential recipient of a loan thinks it’s poor policy, needing redirection towards better education.

 

i think this guy qualifies as a candidate for a ministerial position.... vs wasting away beside the rails. A general swap would work

at 3 per cent per 

 

 

 

Absolutely understand their doubts because that interest its what many European Banks give to well paid people earning Thb 150 K monthly and take up loans  in the range of 5-10 million Baht.