How to finance the building of new house?

[oceanbreeze851]

Wife and I live in Korat. We went to Sattahip with my stepson and his wife. I love the area. We decided to look for land to own and build a house. We found a 2 plot area with total size of 210 wah. Put down a deposit and will pay it off before end of January. We had looked at house designs and builders on the net and figure we could easily afford about a 4-5 million construction cost. I figured that I would pay about 1/4 down and finance the rest of the cost. I am being told now by a friend that no bank in Thailand will lend to a foreigner. The bank loan would have to be in my wife name and seeing she has not worked in Thailand for 10 years and has no assets in her name (until January when the land will be in her name), her loan would be refused. This seems wrong as we have our retirement IRA in Charles Schwab worth over $300K. I do not plan to move from Thailand as I have sold all assets in USA. I have not been to a bank yet. Any suggestions other than holding the land for a couple of years then selling or raiding the IRA and take the tax bit to pay for the house in cash?

 

[Pravda]

3 minutes ago, oceanbreeze851 said:

This seems wrong as we have our retirement IRA in Charles Schwab worth over $300K.

Simple. Use that money to pay for house. Why would a Thai bank care about the money they have no access to.  Some of these questions are unbelievable kindergarten stuff

 

[sirineou]

Not sure if they will rent on vacant land, By my wife borrowed a percentage of the cost of a new SUV from Toyota leasing,  and she has no income or work, I cosigned the loan  and all of my income is from outside Thailand. But the wife does have clear title of our house here in Thailand, Her parents Home she inherited when they passed away,  and a house in the US on her name,

Your best bet is to go with your wife and talk to different banks.  

 

[Dante99]

Giving financial advice is just shooting in the dark without complete knowledge of your financial situation.  For example, what is your income and how reliable is it?

21 minutes ago, oceanbreeze851 said:

I am being told now by a friend that no bank in Thailand will lend to a foreigner.

Probably true since a foreigner generally can not land and house which would normally be the collateral for the loan.  Anyway there are foreigners with bank loans and foreigners who guarantee their wife's loans as mentioned above.  Home loans to home ownrer=wife.

[BE88]

You want zero problems and zero future financial losses with your maybe ex wife, the best advice I can give you.     RENT

[oceanbreeze851]

I am retired military and collecting social security which I started over 3 years ago. Collecting over 100K baht a month.

[BE88]

17 hours ago, oceanbreeze851 said:

I am retired military and collecting social security which I started over 3 years ago. Collecting over 100K baht a month.

Well, you would have no problem paying a rent of a beautiful villa all over Thailand with another advantage of when you are tired of living in a place which inevitably comes to many, myself included, to be able to change easily there are many beautiful areas to discover in Thailand , good luck

 

[falang1969]

I can share my recent experience I'm currently dealing with.

 

I went to my bank, Bangkok Bank who I have banked with since 2008. I put millions of baht a year through the account. I have ample assets and cash in my home country and regular flows of cash into Thailand. I showed them everything!

 

I was putting down 50% cash on a very modest small house.

 

Initially, the branch Manager said, absolutely no problem after looking at our Thai and UK bank statements. The house was to be in my wifes name, with me as a guarantor. She said that we could use the income I send over, to say that was my wife's income, around 200k month.

 

We were looking for THB1.5m only! 50% loan!

 

Then it started, asking for pictures of my property in the UK, rental agreements from the UK...it was now...."we're not sure".

 

They now have an inch of paperwork showing absolutely everything I own and earn and has been referred to Head Office....I'm not holding out much hope!

 

I also went to SCB and they also said the same thing, the issue is no income/job for my wife, throws a spanner in the works! 

 

Their view is that even though I am married with a couple of kids, I could <deleted> off at any time! They don't care about the 50% LTV and cashflows through mine and my wife's bank accounts.

 

Your wife needs a job with regular (not erratic) income every month or a business where she can show her income.

 

The only other thing they suggested was getting another Thai to be guarantor to the loan, which was a non-starter in our circumstances.

 

Looks like I'm going to have to put down 100%!

 

 

 

[BritManToo]

44 minutes ago, falang1969 said:

Looks like I'm going to have to put down 100%!

I was in a similar position with BKB ............ wanted 50%/50% they agreed, then backed out at the last minute.

Suspect my wife tipped them off to refuse so I would pay 100%.

I just backed out of the house purchase.

 

Next attempt, my wife forged the job paperwork, I put 25k/month in her bank, her pal pretended to be her employer, and SCB gave her a 90% mortgage.

 

I expect your wife was more trustworthy than mine.

[chrisandsu]

1 hour ago, BritManToo said:

I was in a similar position with BKB ............ wanted 50%/50% they agreed, then backed out at the last minute.

Suspect my wife tipped them off to refuse so I would pay 100%.

I just backed out of the house purchase.

 

Next attempt, my wife forged the job paperwork, I put 25k/month in her bank, her pal pretended to be her employer, and SCB gave her a 90% mortgage.

 

I expect your wife was more trustworthy than mine.

Yep that’s how the Thais do it . Just recycle money in the bank account for 6 months  Or better still get her to find a job and be out of your hair for a while . 

[oceanbreeze851]

Thank you for all the input. I agree that the banking system in Thailand is F***. Right now, we (wife, stepson, stepson's wife, grandson and I) live together and I am paying for everything. We will be moving to Sattahip in June and will rent a place until we can afford the house build. My stepson is a hard worker and will be getting a job to help with the cost of the house build.

[crazykopite]

Cash your money in and pay upfront in cash that’s what I did there are no pockets in shrouds you cannot take it with you and the way the Thai economy is going interest rates will rise in the near future at least when you reach the pearly gates you leaving knowing your wife has a paid up home to live in for the rest of her life 

[ncc1701d]

I haven't checked recently, but I believe UOB out of Singapore used to lend money... But at eye watering rates.

[lopburi3]

Perhaps a less expensive build might be an option also.  4-5 million is a lot of money for house, even in Bangkok.  As you have the land would think a less expensive build might be an option (or are you building two homes)?  You can always plan to add-on in the future as land area seems to allow.  If need now the IRA hit might be cost effective in the long run.

[khunPer]

On 10/30/2021 at 5:00 AM, oceanbreeze851 said:

I figured that I would pay about 1/4 down and finance the rest of the cost. I am being told now by a friend that no bank in Thailand will lend to a foreigner.

There seems to be some possibilities for a 50 percent mortgage for foreigners - so you have to come up with the other half yourself - my next door British neighbor got that through a foreign owned construction company, and to my knowledge some Australian finance, I however don't know details.

 

Normally we foreigners pay 100 percent for our house, as we cannot own the land under our house. Might be worth considering using some of your savings instead and perhaps considers a slight less expensive construction, you can still have a nice house build for 2-3 million baht.

 

I'm not sure if a Thai can borrow more than 50 percent.

[AustinRacing]

As some pointed out it varies which is not all that helpful to you. In our case I was in the country less than a year on work permit and wife not working. We got a loan for 4.5mil with 600k deposit. The seller is a wealthy property developer with connections at a bank and Land department. All we did was sign the loan docs in her name. Easiest way is to find a bent loan officer!!!

[Regyai]

8 hours ago, BritManToo said:

I was in a similar position with BKB ............ wanted 50%/50% they agreed, then backed out at the last minute.

Suspect my wife tipped them off to refuse so I would pay 100%.

I just backed out of the house purchase.

 

Next attempt, my wife forged the job paperwork, I put 25k/month in her bank, her pal pretended to be her employer, and SCB gave her a 90% mortgage.

 

I expect your wife was more trustworthy than mine.

 

29 minutes ago, AustinRacing said:

As some pointed out it varies which is not all that helpful to you. In our case I was in the country less than a year on work permit and wife not working. We got a loan for 4.5mil with 600k deposit. The seller is a wealthy property developer with connections at a bank and Land department. All we did was sign the loan docs in her name. Easiest way is to find a bent loan officer!!!

"Walking the Bankbook" as the Thai expression says - with revolving fabricated income and invented work

&/or an amenable loan guy are the two de rigueur routes to use/combine.

 

Even so, expect minor flip flaps and changes of heart as the file gets escalated to ever 'bigger bosses' within the banks interminable hierarchy. 

[hioctane]

It is near impossible to finance in a foreign country unless you have a steady local income. It means very little that you have money in a home country. You can't use it to guarantee a loan because they have zero access to it. 

[KhunLA]

Nice income, so rent, until IRA is available without the tax hit, though if knowing RE, and buying in good, the appreciation may offset the tax hit, and you have what you want.

 

Depending on your situation / relationship wise, rent is always good also, as a safety feature, and can use the tax bite as an excuse to rent, as you test the waters.

[chrisandsu]

I know it’s probably stating the obvious but why don’t you just let the step son and his wife and your wife get the loan combined but you pay for it ? Be worth more there then got rid of. 

[fredscats]

If you need finance on that amount Id stay at home

[ChrisP24]

2 hours ago, fredscats said:

If you need finance on that amount Id stay at home

What a lovely, helpful comment.  He doesn't need to finance it, it is just tax-advantageous for him to finance it so that he doesn't have to take it out of this IRA and incur the associated tax hit. 

 

Oceanbreeze, one thing you might do would be to build something small (and even better - expandable) to live in initially, and then save up from your military retired pay + SS (which together greatly exceed your living expenses) and then either build onto it in stages as you accumulate funds, or work out a slow progressive cash-and-carry construction timeline.  Actually living on the land and taking time to leisurely plan out what you want to build could be quite an enjoyable undertaking.  You could well think of things you wouldn't otherwise have, while not having to un-do anything already built.

 

Another option might be if you have family willing to lend you the approx. $90k on a ten year loan or some such.  On the off chance that repayment gets tough you still have the IRA to draw on. 

 

 

[KhunLA]

4 minutes ago, ChrisP24 said:

What a lovely, helpful comment.  He doesn't need to finance it, it is just tax-advantageous for him to finance it so that he doesn't have to take it out of this IRA and incur the associated tax hit. 

 

Oceanbreeze, one thing you might do would be to build something small (and even better - expandable) to live in initially, and then save up from your military retired pay + SS (which together greatly exceed your living expenses) and then either build onto it in stages as you accumulate funds, or work out a slow progressive cash-and-carry construction timeline.  Actually living on the land and taking time to leisurely plan out what you want to build could be quite an enjoyable undertaking.  You could well think of things you wouldn't otherwise have, while not having to un-do anything already built.

 

Another option might be if you have family willing to lend you the approx. $90k on a ten year loan or some such.  On the off chance that repayment gets tough you still have the IRA to draw on. 

 

 

When comparing the tax bite vs interest rates here, he may take the tax bit.  

[chickenslegs]

@oceanbreeze851 Ex military. Don't you have a credit union that could loan you the money?

[ChrisP24]

11 hours ago, chickenslegs said:

@oceanbreeze851 Ex military. Don't you have a credit union that could loan you the money?

Good point - it is worth checking out USAA and Navy Federal Credit Union, I recall that Navy Federal used to do car loans for overseas purchases, not sure if that was only for active duty. 

[Kalorymetr]

On 11/2/2021 at 7:06 AM, falang1969 said:

I can share my recent experience I'm currently dealing with.

 

I went to my bank, Bangkok Bank who I have banked with since 2008. I put millions of baht a year through the account. I have ample assets and cash in my home country and regular flows of cash into Thailand. I showed them everything!

 

I was putting down 50% cash on a very modest small house.

 

Initially, the branch Manager said, absolutely no problem after looking at our Thai and UK bank statements. The house was to be in my wifes name, with me as a guarantor. She said that we could use the income I send over, to say that was my wife's income, around 200k month.

 

We were looking for THB1.5m only! 50% loan!

 

Then it started, asking for pictures of my property in the UK, rental agreements from the UK...it was now...."we're not sure".

 

They now have an inch of paperwork showing absolutely everything I own and earn and has been referred to Head Office....I'm not holding out much hope!

 

I also went to SCB and they also said the same thing, the issue is no income/job for my wife, throws a spanner in the works! 

 

Their view is that even though I am married with a couple of kids, I could <deleted> off at any time! They don't care about the 50% LTV and cashflows through mine and my wife's bank accounts.

 

Your wife needs a job with regular (not erratic) income every month or a business where she can show her income.

 

The only other thing they suggested was getting another Thai to be guarantor to the loan, which was a non-starter in our circumstances.

 

Looks like I'm going to have to put down 100%!

 

 

 

Why would you marry someones that has no income? This can only cause trouble

[jadee]

My advice to the OP is that instead of buying land (for your wife) and building a home, look around on the second hand property market. PLENTY of people desperate to sell right now and would crawl over broken glass to get an offer. You sound like you haven't bought a place here before, well trust me, many people who have bought feel trapped and find it really difficult to sell (as Thais don't like second hand homes). In case you hadn't noticed, the economy is shot right now and you won't have any problems getting a deal. 

[falang1969]

On 11/7/2021 at 11:04 AM, Kalorymetr said:

Why would you marry someones that has no income? This can only cause trouble

My wife is a housewife and mother to our two kids aged 2 and 7! Who would look after them?

 

Why would I want my wife going out just to earn 30k a month? Not worth it!

 

Hasn't caused any issues in the last 9 years! Our relationship is stronger than ever!

 

Why shouldn't I give some security for my kids here? They then will have property in the UK and Thailand when I pop my clogs!

 

 

 

[RafPinto]

1 minute ago, falang1969 said:

My wife is a housewife and mother to our two kids aged 2 and 7! Who would look after them?

 

Why would I want my wife going out just to earn 30k a month? Not worth it!

 

Hasn't caused any issues in the last 9 years! Our relationship is stronger than ever!

 

Why shouldn't I give some security for my kids here? They then will have property in the UK and Thailand when I pop my clogs!

 

 

 

To make 30k, she really must be qualified. That's quite a decent salary in Thailand.

[falang1969]

Just now, RafPinto said:

To make 30k, she really must be qualified. That's quite a decent salary in Thailand.

Exactly, I wouldn't want her going out to work for 30k, let alone 15k! Just not worth it!

 

She looks after the kids fantastically and does EVERYTHING around the house!

Why would I want to change that!? Lol