Has your wife recently applied for a home loan in Thailand?

[ubonr1971]

We are considering approaching our landlord to buy the building where we live and run a business.

 

Recently we provided full financial evidence to the bank for our business and even did a credit report via my wifes bank. We've had several meetings with this guy and made him approach the decision makers in Bangkok to basically ascertain that a loan to us for x amount is viable.

 

Anyways, he has come back and said that he can lend my wife 100% of the purchase price. I found this unusual as back home one has to pay 80% deposit (or up to 95% with insurance). Re insurance... he did say that we can pay 10 yrs insurance on the loan which means that if my wife dies the loan is repaid. Does anyone know if the beneficiary can be a 5 yr old child?

 

What I found most surprising was that he said we could only start 'officially' applying for a loan after we have signed a contract with the seller. I asked him what happens if we sign a contract and then you dont approve our loan. He didnt know the answer to this. How does this work exactly????? Can the contract have a clause that the offer is subject to finance?

 

Finally, I will be paying half the loan payment. Should I be opting for a 30 yr lease at the land office?

thanks for any info

[BritManToo]

"Finally, I will be paying half the loan payment. Should I be opting for a 30 yr lease at the land office?

thanks for any info"

 

A lease won't be allowed on a home with a bank loan.

 

There's a common scam where the 'wife' gets the bank to pull out of the mortgage offer at the last minute, or reduce the loan offer to 50%. Usually a conspiracy with the 'wife' to force the foreigner into parting with a lot more money than he intended. I mention it as no bank currently offers 100%, and them wanting you to sign the contract first.

Edited September 25, 2019 by BritManToo

[worgeordie]

You should consult a reliable lawyer.....If you can find one.

regards Worgeordie

[ubonr1971]

25 minutes ago, BritManToo said:

"Finally, I will be paying half the loan payment. Should I be opting for a 30 yr lease at the land office?

thanks for any info"

 

A lease won't be allowed on a home with a bank loan.

 

There's a common scam where the 'wife' gets the bank to pull out of the mortgage offer at the last minute, or reduce the loan offer to 50%. Usually a conspiracy with the 'wife' to force the foreigner into parting with a lot more money than he intended. I mention it as no bank currently offers 100%, and them wanting you to sign the contract first.

_{I specifically asked this ktb guy about the issue re do we have to pay a deposit. He categorically said that they can lend 100%. I dont know if its bc of my wifes occupation/ high earning capacity. Will find out.}

[ubonr1971]

Also, I meant to ask... if we are lending the money then presumably the bank attends settlement with us at the land office with the seller as well. How does this process occur?

[JaiLai]

1 hour ago, worgeordie said:

You should consult a reliable lawyer.....If you can find one.

regards Worgeordie

I don't think i've ever hear of anyone getting a lawyer to get a bank loan.

[BritManToo]

41 minutes ago, ubonr1971 said:

_{I specifically asked this ktb guy about the issue re do we have to pay a deposit. He categorically said that they can lend 100%. I dont know if its bc of my wifes occupation/ high earning capacity. Will find out.}

That's BS, they're lying to you.

I'd walk away from the whole idea, after hearing that one.

[BritManToo]

48 minutes ago, ubonr1971 said:

Also, I meant to ask... if we are lending the money then presumably the bank attends settlement with us at the land office with the seller as well. How does this process occur?

Bank will have one of their staff at the land office, they hand the money over and take the land title away with them.

Unless you are Thai or have a Thai work permit, you won't even be allowed beyond the land office reception.

You get to sign the form, "I agree no part of this property is mine or will ever be mine" at reception.

It'll be the Thai lady, the bank staff and the land office manager doing the deal.

Edited September 25, 2019 by BritManToo

[worgeordie]

3 minutes ago, JaiLai said:

I don't think i've ever hear of anyone getting a lawyer to get a bank loan.

It's more about buying it from the owner.

regards worgeordie

[ubonr1971]

7 minutes ago, BritManToo said:

That's BS, they're lying to you.

I'd walk away from the whole idea, after hearing that one.

this guy has been writing loans for ktb for 10 yrs. we have built up rapport with this guy and he even ran our figures by head office before we have filled out oa form. Thus I would never walk away from this. Will clarify again tomorrow

[BritManToo]

14 minutes ago, ubonr1971 said:

this guy has been writing loans for ktb for 10 yrs. we have built up rapport with this guy and he even ran our figures by head office before we have filled out oa form. Thus I would never walk away from this. Will clarify again tomorrow

Government capped home loans at 95% about 5 years back.

If he's offering your wife 100% there's something crooked going on.

You have no rapport, you're a mark, and he's a conman.

Edited September 25, 2019 by BritManToo

[ubonr1971]

1 hour ago, BritManToo said:

Government capped home loans at 95% about 5 years back.

If he's offering your wife 100% there's something crooked going on.

You have no rapport, you're a mark, and he's a conman.

Wow, bar stool talk at its best. My wife doesnt work for the govt'. She has Dr in front of her name. Maybe you have no experience with these types of applications for medical professionals???

[fletchsmile]

1 hour ago, BritManToo said:

Government capped home loans at 95% about 5 years back.

If he's offering your wife 100% there's something crooked going on.

You have no rapport, you're a mark, and he's a conman.

That's not correct. Rules depend on a variety of things. 100% is possible, IF:

 

1) This is your first contract/ home

2) The amount is under THB 10 million

 

On top of that will be the bank's own lending criteria.

[JaiLai]

Government capped home loans at 95% about 5 years back.
If he's offering your wife 100% there's something crooked going on.
You have no rapport, you're a mark, and he's a conman.

How can you possibly know all loans from all banks?


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[fletchsmile]

To OP,

 

Yes, we've applied for home loans in the past. Last time was to buy our house on land we would own just over 2 years ago. Lending rules change from time to time

 

Some things aren't clear in your post.

 

eg What exactly are you buying? "building where we live and run a business is rather vague. Townhouse? Detached? Office building? etc etc

eg who will own the land?

 

1) First off I personally wouldn't buy a residential property on land owned by anyone else. I'd much prefer to buy our own home on our own land.

 

2) Yes. 100% loans are possible. You will have to meet various criteria as per current regulations on loan to values (LTVs). Bangkok Bank sets those out quite clearly here:

 

https://www.bangkokbank.com/en/Personal/My-Home/-/media/18F4D060BAAA4CA08791A12263CB9980.ashx

 

On top of what you are actually buying (hence my question above) are things like amount, whether you have any other loans etc. Then on top of that will be the bank's own credit policies and your credit status.

 

3) For the insurance, I assume you mean something like Mortgage Relief Term Assurance (MRTA). This is usually not compulsory, but depending on your credit banks may or not be strict on this. We have never taken it out. Last mortgage we would have had a slightly lower mortgage rate if we did (as this represents less risk for the bank). But I decided the cost and risk for us wasnt' worth the reduction in mortgage rate we would get. If you would have serious financial issues if your wife died then it is well worth considering. Our case I'd be unhappy if she died but financially we would be fine, so didn't go for it.

 

No. Normally a child or anyone else won't be a beneficiary of MRTA. The whole point of MRTA is term assurance to pay off the mortgage loan. This reduces risk for the bank, and takes away financial worries about repayments for you if she dies.

 

I you want term assurance to be paid to another beneficiary you need to take it out separately.

 

4) The part about "officially applying for a mortgage loan after you sign a contract" is again a bit vague. Not really sure what they mean by officially applying.

 

In practice:

 

In our case we approached the bank while looking for properties. I'd actually sounded them out before about finance. So you can start the ball rolling

 

I asked for an approximate amount we'd like to borrow, and both us and bank know that may vary. They reviewed our financial situation and said that it was feasible. Again that will still depend on what you're buying, how much etc. But they can say whether it will be possible or not. We had rejections off some banks before actually finding a property.

 

Once you have found a property, and had an offer accepted, and if you have already set the ball rolling on finance, that is where the "official mortgage application" goes in. It is possible they may reject at this stage, eg they don't like the property/ valuation etc.

 

In practice, if buying a new place you normally pay a reservation fee of a few thousand baht on agreeing to buy. You may then have to pay a small deposit of say 50k. If you can't get finance this will likely be lost. But this is why you sound the bank out before.

 

The seller understands that if you don't get finance you won't buy. But the reservation fee and/ or deposit is their protection, and covers their cost. You can discuss with them though what will happen in the event you don't get finance. They may agree to a refund. T

 

For a sale of a second hand property, like in you case, there is actually no standard contract in Thailand so what you agree counts. You may want help from a lawyer drafting a contract for pitfalls, and would be possible to draft a clause subject to finance. But the seller of course might not want that,and may still want a small non-refundable deposit. It depends on your situation, relationship etc. Hence it is for you to discuss with the seller, and then ensure what you agree is written into a contract.

 

5) I don't understand your last sentence.

You are paying half of the loan payment? Are you talking monthly repayments? or saying you will pay that up front?

Q: Who are you thinking about getting a lease from and what for? 

e.g. the seller of the property who is also not selling you the land? Personally I would want to buy the land too or not go ahead. As stated right at the start, the only person's land I would buy our home on would be my wife's. No land. No home. Possible exception might be if a second home on family land for a small amount. Even in that case I would prefer my wife to use her own land, not someone else's. Anyone outside family no.

or

Q: Are you talking about a 30 year lease from your wife for you to use? Is that in case you split up? It might sound fine in theory still having access to the house/home via a lease. In practice you likely won't want to live in the same house if you split up.

So if the concern is around your wife, one of the best ways to mitigate it is simply the asset is in her name, but the liability (loan) is too. So you split, she likely gets both. Go into that with your eyes open. Technically you can challenge under divorce law as to your rights but that gets messy and brings in lawyer costs.

 

Cheers 

Fletch ????

 

 

[fletchsmile]

2 hours ago, BritManToo said:

Bank will have one of their staff at the land office, they hand the money over and take the land title away with them.

Unless you are Thai or have a Thai work permit, you won't even be allowed beyond the land office reception.

You get to sign the form, "I agree no part of this property is mine or will ever be mine" at reception.

It'll be the Thai lady, the bank staff and the land office manager doing the deal.

Not true in my case. Last time, I wasn't working at the time either and didn't have a WP.

 

We met the bank representative and the seller outside the land office before the office opened. We read all the various paperwork together (in Thai of course), including the mortgage agreement, and mortgage charge the bank will take. My wife of course was the one signing all the paperwork as the house and loan were in her name.

 

We all 4 (wife, me, seller and bank rep) went into the land office. When our turns came up I went to the counter with my wife whenever she did. There are various parts to the process, eg purchase, register of mortgage charge etc, and not all parties go up for each part. But whenever she went I did. We both wanted to make sure we understood what was going on, so both wanted this. I understand the finance side better than her on the mortgage, she probably understands land/property ownership better than me. But we both saw as it as a partnership we do together as a team

 

My wife of course as owner and mortgagee again signed most of the paperwork. I did sign a form saying something along the lines of "the money all came from my wife's funds and I had no claim over the assets".

 

"Saying it will never be mine" is stretching things and poetically embellishing. 2 potential scenarios in particular I would have an interest and claim to the assets:

1) In the even my wife dies, I can be a beneficiary and receive the house according to her will. (There are Thai rules around making this permanent afterwards, which are out of scope here).

2) Also, although you sign that the money all comes from her, that is at point of acquisition. If you are contributing to the mortgage then these count as joint assets that have been acquired after marriage and you have a claim to part on divorce. You likely won't get the house on divorce of course, nor would probably want it, but it can be taken into account in agreeing assets settlements and dividing up assets.

Edited September 25, 2019 by fletchsmile

[BritManToo]

1 hour ago, ubonr1971 said:

Wow, bar stool talk at its best. My wife doesnt work for the govt'. She has Dr in front of her name. Maybe you have no experience with these types of applications for medical professionals???

My former wife only managed a 95% home loan 6 years back.

By the time they had added the 20 year life insurance, they had nickel and dimed it down to 90%.

Wish I hadn't bothered now.

Edited September 25, 2019 by BritManToo

[tomazbodner]

The way they still do 100% is that they inflate the price of property, get bank to estimate the value to the inflated value, then get the loan of 90% or 80% of that inflated value, which covers 100% of the actual price of the property.

 

Currently condo developers are giving 10-20% off the list price, and banks then set the value to 100% of listed price and give 80 or 90% loan cover, which is actual loan applicant needs.

 

Just seen that done yesterday.

[dotpoom]

18 hours ago, BritManToo said:

"Finally, I will be paying half the loan payment. Should I be opting for a 30 yr lease at the land office?

thanks for any info"

 

A lease won't be allowed on a home with a bank loan.

 

There's a common scam where the 'wife' gets the bank to pull out of the mortgage offer at the last minute, or reduce the loan offer to 50%. Usually a conspiracy with the 'wife' to force the foreigner into parting with a lot more money than he intended. I mention it as no bank currently offers 100%, and them wanting you to sign the contract first.

Wow!...now that's what I call a real valuable post...it doesn't apply to me but thanks for that information

[Brickbat]

Lenders here are lending 100% . Money is cheap and god knows what the scam is , but I know of someone who recently got 3 properties. In a space of 18 months. 100% borrowings.  Government worker. Govt Housing bank.

 

i see Australian banks now lending upto 90% . And 10% usually comes from credit card debt or some other debt. So 100% borrowings.

Recent Royal Commission into banking practices was just bs protocol. 

[Peterw42]

Banks lend a percentage of their valuation of a property NOT a percentage of the purchase price, mortgage amount etc.

They are not lending you 100%, they are lending a percentage of their valuation of the property.

 

If a bank lends you 800k to buy an 800k property, that means they have valued the property at 1,000,000 baht. They are not lending 100% , they are lending 80%.

 

Try and borrow 1,000,000 on a property the bank values at 1,000,000 and they will want you to chip in 10%. That way if it all goes bad, they can dump the property for 900k and get their money back, you lost 10% not them.

 

Edited September 26, 2019 by Peterw42

[LukKrueng]

20 hours ago, BritManToo said:

Government capped home loans at 95% about 5 years back.

If he's offering your wife 100% there's something crooked going on.

You have no rapport, you're a mark, and he's a conman.

the 95% is from the property valuation amount done by the bank. If the selling amount is lower than that he might be getting the full buying amount without violating the 95% cap

[Thingamabob]

21 hours ago, JaiLai said:

I don't think i've ever hear of anyone getting a lawyer to get a bank loan.

Much more to it than that. This is Thailand, not the West.

[lannarebirth]

I don't know how it works in Thailand but there are usually three payments when purchasing a property. An "earnest money", which is a token amount, very little, maybe 10,000 Baht given at time of signed contract. Then there is the down payment, which in your case is zero if seeking 100% financing. Then there is the balance, which in your case is the bank releasing funds in full to the seller minus earnest money amount.

 

As far as writing a contract without having financing approved yet, you make securing financing a contingency of sale in the sales contract. No financing and the contract become voidable.

[RichardColeman]

Only time I would ever agree to my wife buying from our landlord would be if :

A : My wife put down any deposit.

B : The mortgage was the same as the monthly rent.

C : The landlord shot the Cockrell nextdoor

 

 

 

 

[JaiLai]

Much more to it than that. This is Thailand, not the West.

I’m aware where I am thank you.

I’ve bought properties, my wife has bought properties over the years, never did we feel the need for a lawyer.

They’re really not needed and also may add more problems than they solve.


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[LukKrueng]

2 hours ago, lannarebirth said:

I don't know how it works in Thailand but there are usually three payments when purchasing a property.

it doesn't work this way in Thailand

[ubonr1971]

7 hours ago, RichardColeman said:

Only time I would ever agree to my wife buying from our landlord would be if :

A : My wife put down any deposit.

B : The mortgage was the same as the monthly rent.

C : The landlord shot the Cockrell nextdoor

 

 

 

 

but if you had a baby and a successful business wouldn't you consider such an option. When the lease runs out in 9 yrs its a nightmare. give a family some stability?