Buying a New House with Bank Loan or Renting?

[Neeranam]

I have a few options regarding buying a new house. 

 

Firstly, I'm trying to figure out if it is wiser to rent or buy.

Secondly, I am wondering about getting a new house with finance.

 

I really can't see much benefit in renting, apart from being able to leave if I don't like it. 

It would be better, I think to just buy a new house and pay finance, although being quoted 7% a year. It would be affordable if I paid 50% down payment. Maybe it would be better to just buy a house for half the price and pay 100%.

 

Another option, get a mortgage for 10 years(the time I want to pay it off before I retire). However, I'm not sure if I can get a mortgage when I am paid from  the USA. 

 

Any thoughts welcome, especially re the renting or buying. 

 

Cheers

 

NN

 

 

 

 

[Led Lolly Yellow Lolly]

I have plans to build a house somewhere down south in the future, something to leave my kids. I'd build it somewhere out of town, not too far from the coast but not on it. The reason to build yourself is you set the specs and see it's done right.

[Neeranam]

2 minutes ago, Led Lolly Yellow Lolly said:

I have plans to build a house somewhere down south in the future, something to leave my kids. I'd build it somewhere out of town, not too far from the coast but not on it. The reason to build yourself is you set the specs and see it's done right.

This is another option, I also want to be near the beach, Cha Am. I could rent for a year or so while building. Do you think it would end up being a lot more expensive?

[Led Lolly Yellow Lolly]

I'm not a fan of Hua Hin but I quite like Cha Am. Rentals come in all budgets AFAIK. Fan room for you sir?

[EricTh]

It really depends on a lot of factors like your citizenship status, married with Thai, any long term commitments in Thailand, your long term plans.

 

If you are just temporarily staying in Thailand, it's better to rent. If not, it's better to buy.

[Yellowtail]

I think you are a Thai citizen, yes?

 

I would not borrow money at 7% when the banks are only paying 1% on a ten-year fixed account.

 

I would either rend and invest my money elsewhere or buy/build with cash.

[Neeranam]

13 hours ago, Yellowtail said:

I think you are a Thai citizen, yes?

 

I would not borrow money at 7% when the banks are only paying 1% on a ten-year fixed account.

 

I would either rend and invest my money elsewhere or buy/build with cash.

Yes.

 

I agree, but not sure if I can get a mortgage, I will go to the bank and ask. 

[BritManToo]

On 7/14/2021 at 7:33 PM, Neeranam said:

It would be better, I think to just buy a new house and pay finance, although being quoted 7% a year. It would be affordable if I paid 50% down payment.

Why 7% when the going rate is 4.745%?

[Neeranam]

2 hours ago, BritManToo said:

Why 7% when the going rate is 4.745%?

This is finance from the builder. 

 

Obviously I'd be better with a bank loan, although can only get one until I'm 60, which should be OK, as I want to pay it in the next 5 years. 

[Neeranam]

5 minutes ago, Neeranam said:

This is finance from the builder. 

 

Obviously I'd be better with a bank loan, although can only get one until I'm 60, which should be OK, as I want to pay it in the next 5 years. 

Actually, I see that SCB is 65 and UOB is 70/75 if self employed. 

[Tracyb]

Recommendations:

1 Don’t finance with the builder…..  too expensive.

 

2 bank finance preferable if possible.  

 

3 check around the area for moo bahns built by Land and House.  They are both bank and builder and the quality is actually prepared good!

 

4 Designing and building your own is always the best option if you’re so inclined…have the time and expertise….. and can find a good builder.  Alternatively an architect who will bring a builder….  You can always go to look at the architect’s previous builds and interview the owners..  time consuming but necessary due diligence.

 

Building your own will be cheaper, too when comparing apples to apples in terms of design and finishes…

 

oh…..and be sure to have an expert electrician design and install power throughout the project. You can check with Crossy on various aspects of that bit!

 

best of luck on this journey.  It will be alternatively fun, frustrating, and in the end very satisfying when the finished product is ready to move in!

Edited July 16, 2021 by Tracyb

[Heng]

While I love having tenants, I'd never want to be one long term.   I'd never want a place that I call home 'open/subject to inspection by the landlord.'   Not to mention you're tying your 'home' to that landlord's financial solvency.    

[chilly07]

6 hours ago, Neeranam said:

This is finance from the builder. 

 

Obviously I'd be better with a bank loan, although can only get one until I'm 60, which should be OK, as I want to pay it in the next 5 years. 

Get the finance direct from the bank. They will protect their/your interest and make sure everything is ok especially with land registry. Don't trust the builder-he will disappear once he has your money and his company will be wound up/liquidated. Get the maximum loan and longest pay back period. You can always pay off faster. Renting will always be money wasted and the amount you pay will cover the loan repayment but you will not own the property at the end.

[bbabythai]

11 hours ago, BritManToo said:

Why 7% when the going rate is 4.745%?

Thats what I was thinking. 7% is not right

[driver52]

defo don't get a loan from a builder yikes!!

Have you looked at 'price charts' of land and property in Thailand?

In the west the housing market has gone seriously bonkers in the last 20 years, so much so I think you'd be crazy to buy now

Back in the good old days, the banks would only let you borrow say 3 times your salary for a 25 year loan

Now it is something like 6 times and loans of over 30 years...it's a complete scam really especially in places like the UK...it's akin to living in a 'hell hole' over there now lol

Don't listen to the 'renting is money wasted' gang, depends on the area and the costs involved, if you manage to rent cheap for a while you can build up some capital and you can always use it for 'other investments' OR a large deposit on a 'distressed sale'

Good luck!

[Yellowtail]

And whatever you do, do not get a loan with an adjustable rate...

[brianthainess]

On 7/14/2021 at 7:33 PM, Neeranam said:

I really can't see much benefit in renting, apart from being able to leave if I don't like it. 

You may also HAVE to leave if the owner dies or at end of contract if the owner wants his house back, think a few years down the track, when you may have accumulated extra furniture or all if unfurnished/ white goods and pets, taken care of garden, planted more etc etc.  This is what happened to me when the owner wanted his house back, so I paid for land and house, best thing I did after years of only wanting to rent. If you know you can be sure of an income until you have paid off the loan then buy or at least pay a deposit as much as you can afford. Of course it will also depend on what size of house you want and location as to the repayments. My wife's daughter brought a very moderate 3 bedroom house in a gated community, pays 7,000 a month plus service charge of about 1,000 a month, shares with her young son and brother. Got a loan from bank coz she works for Starbucks. Pay cash if you can is my advise. If you get in dire straits you can always get a loan against your home, or rent out a room to a working filly. : ) 

[EricTh]

On 7/16/2021 at 9:30 AM, Neeranam said:

This is finance from the builder. 

 

Obviously I'd be better with a bank loan, although can only get one until I'm 60, which should be OK, as I want to pay it in the next 5 years. 

 

What do you mean by 'finance from the builder'?

 

Right now, the bank pays me pittance for my deposit (only 1%) and they are charging you 7%? This is ridiculous.

 

Look at it this way, is it better to pay to the bank and one day the house will belong to you or is it better to pay to the owner but the house will never belong to you?

 

Renting only make sense if you are in Thailand for less than two years.

 

 

Edited July 17, 2021 by EricTh

[Neeranam]

1 hour ago, EricTh said:

 

What do you mean by 'finance from the builder'?

 

Right now, the bank pays me pittance for my deposit (only 1%) and they are charging you 7%? This is ridiculous.

 

Look at it this way, is it better to pay to the bank and one day the house will belong to you or is it better to pay to the owner but the house will never belong to you?

 

Renting only make sense if you are in Thailand for less than two years.

 

 

The builder is offering  loan service, but you are right, it is ridiculous. 

 

I'm looking into ways to get low interest loans using DeFi, with my crypto as collateral.

 

I have had a mortgage with KrungThai bank, I'm sure they would be willing to give me another one. 

 

 

[Neeranam]

Do Land and House bank build houses too?

[Yellowtail]

1 hour ago, Neeranam said:

The builder is offering  loan service, but you are right, it is ridiculous. 

 

I'm looking into ways to get low interest loans using DeFi, with my crypto as collateral.

 

I have had a mortgage with KrungThai bank, I'm sure they would be willing to give me another one. 

 

 

 

Why not just pay crypto for the house? 

[Neeranam]

12 minutes ago, Yellowtail said:

 

Why not just pay crypto for the house? 

I get up to 17% p.a by lending/staking/minting it myself.

 

It doesn't make sense selling, especially as it, as an asset is increasing. 

[driver52]

1 hour ago, Neeranam said:

 

I'm looking into ways to get low interest loans using DeFi, with my crypto as collateral.

Ah a crypto guy, you should have said!

Rent, HODL the crypto, keep scaling in with your earnings until you can cash out and buy a house for cash ????

Job done!