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Posted

If you want to obtain a loan with a property (chanote) as guarantee, it seems that the ownership of property has to be transferred to the money lender at the Land Office first. I remember reading on ThaiVisa that it was possible to sign a contract, or maybe add a clause to the Chanote that prevents the property being sold without the permission of the 2nd party, effectively giving the second party control of the property. They can then proceed to lend money using the property as a guarantee.

Is this possible or I am I wrong in this? It seems that the cost of making a transfer to obtain a loan plus the cost of re-transferring the property back to the original owner once the loan is paid back would swallow up a large chunk of the property's value.

 

Any advice would be welcome.

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Posted

To make it readable using Enter:

 

If you want to obtain a loan with a property (chanote) as guarantee, it seems that the ownership of property has to be transferred to the money lender at the Land Office first.

 

I remember reading on ThaiVisa that it was possible to sign a contract, or maybe add a clause to the Chanote that prevents the property being sold without the permission of the 2nd party, effectively giving the second party control of the property. They can then proceed to lend money using the property as a guarantee.

 

Is this possible or I am I wrong in this? It seems that the cost of making a transfer to obtain a loan plus the cost of re-transferring the property back to the original owner once the loan is paid back would swallow up a large chunk of the property's value.

 

Any advice would be welcome.

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Posted

No I don't believe you have that correct. You don't transfer ownership to the lender. You do record a lein on the chanote so you can not sell the property with satisfying the loan 

Posted
Just now, rak sa_ngop said:

Thanks for your reply. This is what I thought, but I am being told that a particular lender requires a transfer into his name before releasing any money. This obviously can result in a delay of several weeks plus a large transfer charge. I can only suppose that the lender does not trust having a lien entered on a chanote because the chanote could be declared lost and a new  'clean' chanote issued to the original owner with no lien recorded.

 

Posted
6 minutes ago, rak sa_ngop said:

 

Then I would avoid them as thats not correct to my understanding. If you transfer ownership you have no legal standing in the property. Are you sure its just not a bad translation.

Posted
2 hours ago, Dan O said:

Then I would avoid them as thats not correct to my understanding. If you transfer ownership you have no legal standing in the property. Are you sure its just not a bad translation.

Not a bad translation. This is what the money lender requires to provide the loan. Yes, the money lender owns the property until it repaid and then the chanote has to be transferred back (at a cost) once the loan is repaid.

 

Is this method common or unusual.? Any comments welcome.

Posted
6 minutes ago, rak sa_ngop said:

Unfortunately real banks take time to approve mortgages or bank loans. Maybe 1 or 2 months. Not much use if you have a family emergency.

"Not much use if you have a family emergency".

Potentially losing your property isn't much use after the emergency, either.

Posted
22 minutes ago, rak sa_ngop said:

Not a bad translation. This is what the money lender requires to provide the loan. Yes, the money lender owns the property until it repaid and then the chanote has to be transferred back (at a cost) once the loan is repaid.

 

Is this method common or unusual.? Any comments welcome.

Can't believe anyone would be so naive or would even contemplate using this method.

Once transferred to another person, its not your's anymore, whether you have a contract or not. Further comment is not required.

Posted
20 minutes ago, rak sa_ngop said:

Not a bad translation. This is what the money lender requires to provide the loan. Yes, the money lender owns the property until it repaid and then the chanote has to be transferred back (at a cost) once the loan is repaid.

 

Is this method common or unusual.? Any comments welcome.

This is the Kai Fak (sp?) loan and it is quite common in Thailand. Interest rate usually at 15%p.a. 

However it is risky as the lender can be seen as the last option for any borrower with, possibly, a high chance of the loan not being repaid in the agreed timescale. That would then result in the property being lost at a value much lower than market rate. 

This is an example:

http://www.globalmortgagefinance.com/kai-faak-or-kai-faaq.html

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Posted
7 hours ago, rak sa_ngop said:

Not a bad translation. This is what the money lender requires to provide the loan. Yes, the money lender owns the property until it repaid and then the chanote has to be transferred back (at a cost) once the loan is repaid.

 

Is this method common or unusual.? Any comments welcome.

No its not a common method as far as I know and not they way it should be handled. I would not consider this lender and would shop it around and see what other lenders require. 

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