Farang with house, want to use as collateral to purchase additional property.

[Old Farang]

Presently have home with Thai wife, would like to use home as collateral for loan on a new property. 
 

Any info regarding this appreciated.

Recommended banks! 

Is there a better forum where this would be more appropriate or more likely to get a response?

 

Edited October 4, 2022 by Old Farang

[metisdead]

Moved to the Real Estate, Housing, House and Land Ownership forum. 

[Liverpool Lou]

13 minutes ago, Old Farang said:

Presently have home with Thai wife, would like to use home as collateral for loan on a new property. 
 

Any info regarding this appreciated.

If you or your wife have the required income to justify the loan you shouldn't have a problem with any bank.  Your own bank, or her bank, wouldn't be a bad place to start.

 

If you're hoping to get a loan just by offering the property as security, i.e. no income or not enough to repay the loan, you won't find it easy.  Banks are in the business of having loans repaid with interest, they're not interested in having to sell repossessed property.

Edited October 4, 2022 by Liverpool Lou

[Old Farang]

Thank you!

 

[Old Farang]

Any advantage to setting up a Thai company with my wife and family members as partners?

 

[Liverpool Lou]

1 minute ago, Old Farang said:

Any advantage to setting up a Thai company with my wife and family members as partners?

 

I suppose that depends on for what purpose?  

[Old Farang]

Thank Lou

According to my wife securing a loan easier if the loan is for a company.

At present we dont have a company.

[Liverpool Lou]

2 minutes ago, Old Farang said:

Thank Lou

According to my wife securing a loan easier if the loan is for a company.

At present we dont have a company.

For any credibility with a bank, a company applying for a loan would have to be established, trading and have accounts for the bank to check.    

[marin]

13 minutes ago, Old Farang said:

Thank Lou

According to my wife securing a loan easier if the loan is for a company.

At present we dont have a company.

Since the house you own is in your wife's name does she have enough income per month to support the proposed loan? This is much more important than a company I do believe. 

[bolt]

I tried this method earlier

and got this response 

 

From MAGNA CARTER The process is as follows:

First, we need to value the property for a fee of 4,500 THB and then we receive a report giving us the property value, also checking that it's legal.

Once we have that report, we can lend from 50-60% of the value of the property.

The terms of the loan is as follows:

1)      Period from 6 months up to 5 years.

2)      Interest is 12% per year. The first 6 months interest are taken up front then it can be paid monthly.

3)      The loan is secured by way of a registered mortgage on the property. The ownership of the property stays in the owner’s name.

4)      There is a government fee of 1.1% to be paid (from the total of the loan) for the registering of the mortgage at the land office.

We charge a one time fee of 5% of the value of the loan being the set up fee and for us arranging the funds and to make sure the lender is secured through the transaction.

Apart from the valuation fee of 4,500THB all the other fees can be deducted from the loan amount.

[Old Farang]

1 hour ago, Liverpool Lou said:

For any credibility with a bank, a company applying for a loan would have to be established, trading and have accounts for the bank to check.    

Yes this is what I suspect too, but lawyer suggesting this, I am skeptical. They suggest only 3 months of banking records required for business, again I am very skeptical, dont trust lawyers.

 

[Old Farang]

52 minutes ago, bolt said:

I tried this method earlier

and got this response 

 

From MAGNA CARTER The process is as follows:

First, we need to value the property for a fee of 4,500 THB and then we receive a report giving us the property value, also checking that it's legal.

Once we have that report, we can lend from 50-60% of the value of the property.

The terms of the loan is as follows:

1)      Period from 6 months up to 5 years.

2)      Interest is 12% per year. The first 6 months interest are taken up front then it can be paid monthly.

3)      The loan is secured by way of a registered mortgage on the property. The ownership of the property stays in the owner’s name.

4)      There is a government fee of 1.1% to be paid (from the total of the loan) for the registering of the mortgage at the land office.

We charge a one time fee of 5% of the value of the loan being the set up fee and for us arranging the funds and to make sure the lender is secured through the transaction.

Apart from the valuation fee of 4,500THB all the other fees can be deducted from the loan amount.

What is source of this? Is this still valid, ie how old is this info?

[bolt]

17 minutes ago, Old Farang said:

What is source of this? Is this still valid, ie how old is this info?

i contacted Magna Carter earlier this year.

i didn't go through with it

[Old Farang]

Are there advantages using a Thai govt bank?

[Old Farang]

I presume you are referring to MagnaCarta Legal Services.

[Old Farang]

2 hours ago, bolt said:

I tried this method earlier

and got this response 

 

From MAGNA CARTER The process is as follows:

First, we need to value the property for a fee of 4,500 THB and then we receive a report giving us the property value, also checking that it's legal.

Once we have that report, we can lend from 50-60% of the value of the property.

The terms of the loan is as follows:

1)      Period from 6 months up to 5 years.

2)      Interest is 12% per year. The first 6 months interest are taken up front then it can be paid monthly.

3)      The loan is secured by way of a registered mortgage on the property. The ownership of the property stays in the owner’s name.

4)      There is a government fee of 1.1% to be paid (from the total of the loan) for the registering of the mortgage at the land office.

We charge a one time fee of 5% of the value of the loan being the set up fee and for us arranging the funds and to make sure the lender is secured through the transaction.

Apart from the valuation fee of 4,500THB all the other fees can be deducted from the loan amount.

So was this to be a loan thru a bank or a lawyer?

 

[crazykopite]

You would be wasting your time and money and besides that it takes the banks for ever and a day to make a decision I waited over 3 months and they would only loan a certain amount of the valuation of the property and land that you would have to use as security

[ed strong]

2 hours ago, bolt said:

I tried this method earlier

and got this response 

 

From MAGNA CARTER The process is as follows:

First, we need to value the property for a fee of 4,500 THB and then we receive a report giving us the property value, also checking that it's legal.

Once we have that report, we can lend from 50-60% of the value of the property.

The terms of the loan is as follows:

1)      Period from 6 months up to 5 years.

2)      Interest is 12% per year. The first 6 months interest are taken up front then it can be paid monthly.

3)      The loan is secured by way of a registered mortgage on the property. The ownership of the property stays in the owner’s name.

4)      There is a government fee of 1.1% to be paid (from the total of the loan) for the registering of the mortgage at the land office.

We charge a one time fee of 5% of the value of the loan being the set up fee and for us arranging the funds and to make sure the lender is secured through the transaction.

Apart from the valuation fee of 4,500THB all the other fees can be deducted from the loan amount.

Would not go anywhere near that proposal.

 

Why do you need another property?

[Old Farang]

7 minutes ago, ed strong said:

Would not go anywhere near that proposal.

 

Why do you need another property?

Would like some rental income.

[PPGuy]

A Thai relative arranged a house loan refinancing recently. Used 'Thai Credit Retail Bank' (unknown to me previously) and was happy with both their house valuation and the rate offered.

 

Previously had a loan with SCB but at a high rate. Should be noted that their scrutiny of salary / expenses and other o/s loans (credit cards, car loans, etc) was rather strict. I believe they need minimum of 2 years salary info. Took a couple of months or so to complete. 

 

Don't have info on the financials involved but might be worth contacting.

[bolt]

1 hour ago, Old Farang said:

So was this to be a loan thru a bank or a lawyer?

 

i think it was through a Bank, and Magnacarter act on your behalf?

 

I was looking at ANY option to release some equity and only found this option.

but i didn't go through as the terms and con's were not for me

[Old Farang]

21 minutes ago, bolt said:

i think it was through a Bank, and Magnacarter act on your behalf?

 

I was looking at ANY option to release some equity and only found this option.

but i didn't go through as the terms and con's were not for me

Ok thanks for that, much appreciation.

[Thomas KH]

3 hours ago, bolt said:

The first 6 months interest are taken up front

I am always on high alert when I read this kind of condition.

[SheungWan]

The risk is relying on the second property income to pay the mortgage. If the rental income stops then the primary property defaults to the loan company. There is a reason why banks (at least in the UK) will primarily only lend against declared income. If you are still wanting to proceed and with a loan company rather than a bank, then beware their business model maybe assuming high degree of risk you will default.

[scorecard]

5 hours ago, Old Farang said:

Thank Lou

According to my wife securing a loan easier if the loan is for a company.

At present we dont have a company.

It's not that simple, any bank will want to be convinced that you or your wife (if it's a pesonal mortgae loan) or the company (if thre bank gives the loan to the company, can already prove a past income stream and can prove there will be a continuing income stream to support the repayments.

 

If it's a new company then theres' no past business history (sales/revenue/profit margins/operating expenses, etc., therefore bank likely to be hesitant to loan money to the company.

[Old Farang]

1 hour ago, scorecard said:

It's not that simple, any bank will want to be convinced that you or your wife (if it's a pesonal mortgae loan) or the company (if thre bank gives the loan to the company, can already prove a past income stream and can prove there will be a continuing income stream to support the repayments.

 

If it's a new company then theres' no past business history (sales/revenue/profit margins/operating expenses, etc., therefore bank likely to be hesitant to loan money to the company.

So far I would concur with what everyone has said, but I have very limited experience with this kind of thing, especially in Thailand. What I’m hearing here is that Thailand is not that different from other countries I have lived in.

 

 

[Dave0206]

10 hours ago, bolt said:

I tried this method earlier

and got this response 

 

From MAGNA CARTER The process is as follows:

First, we need to value the property for a fee of 4,500 THB and then we receive a report giving us the property value, also checking that it's legal.

Once we have that report, we can lend from 50-60% of the value of the property.

The terms of the loan is as follows:

1)      Period from 6 months up to 5 years.

2)      Interest is 12% per year. The first 6 months interest are taken up front then it can be paid monthly.

3)      The loan is secured by way of a registered mortgage on the property. The ownership of the property stays in the owner’s name.

4)      There is a government fee of 1.1% to be paid (from the total of the loan) for the registering of the mortgage at the land office.

We charge a one time fee of 5% of the value of the loan being the set up fee and for us arranging the funds and to make sure the lender is secured through the transaction.

Apart from the valuation fee of 4,500THB all the other fees can be deducted from the loan amount.

Omg if you want approx 2 million with the 5% + 1.1% + 6 months interest upfront @ 12% pa you probably need around 2.5 million how can you make money by buying property? I'm not sure exact interest it would cost but in region of 20% depending how long you borrow assume you borrow today and immediately buy and have rental income very optimistic returns expected

[MadMuhammad]

Have you approached the sell to discuss vendor financing? Much better rates than a bank loan and the mortgage can be registered on the chanote

[Old Farang]

1 hour ago, MadMuhammad said:

Have you approached the sell to discuss vendor financing? Much better rates than a bank loan and the mortgage can be registered on the chanote

 Thank you for this approach, at present just gathering information prior to taking any concrete steps and give me background to ask intelligent questions with regard to financing. 
 

I would probably want to ensure that the loan could be paid back early before term,  and not locked into long term interest.

 

 

[Liverpool Lou]

On 10/4/2022 at 3:04 PM, crazykopite said:

they would only loan a certain amount of the valuation of the property and land that you would have to use as security

That's exactly how banks work when they're lending money, do you expect them to lend more than the value of the security?