Pay down home loan

[jumbo]

Thai daughter last year bought a house with a home loan from SCB. 2 mio at monhtly payments 18 K.

I want to give her a substantial amount of cash so she can pay down the home loan

Where I am from the bank would review the loan and replace the current home loan with a new one

Same terms, lower monthly payments

Does anyone have any direct experience with this, is it possible?? Or will the bank not review??

No third hand stories please....

 

[circa02]

The repayments don't change from my understanding but obviously capital outstanding is reduced and the amounts towards interest and capital will change (you'll have a clear division on the statement, get her to scan it and send it to you), at the end of the promotion period she can re-negotiate with the current bank on a revised mortgage and monthly repayments will change (along with other terms),  the sales advisor that sold it should be able to help at that point, easier than moving banks but if you want to kill a tree and have a few weeks of headaches that option is available. This is essentially what we were told.

 

When we got the paperwork it did say monthly payment recalculation was possible, it takes 30 days with head-office, and I believe there was a 5000baht fee,  I suspect this only would be successful if I did drop a significant amount into the mortgage, note though that lending criteria is stricter than last year and the base rate has moved i believe 0.75% so I would bet the amount would have to be at least 250k for any recalculation to be successful but I could be wrong.

 

However, importantly, why do you want to reduce the monthly fee? If she can afford the current monthly fee then better to leave it as is - your extra down payment is immediately at work - it's not like by leaving the monthly fee as is you surrendering all that interest opportunity

 

Edited October 26, 2023 by circa02

[baansgr]

Depends which bank, each has its own T&C..consult the bank

[KhunLA]

@jumbo

Really going to depend on the financing she has now, and what is in that contract.

 

Whether they recalculate or even refinance the remaining amount at different rate or time frame. Depending how much you contribute, it may give her enough equity to refinance with another bank if present one isn't open to restructure loan.  

 

She could then pay off present mortgage with new one, with better terms.

 

Our daughter has the worse mortgage, at a good rate. Hook in the buyer with the lower rate, but if staying with same, mortgage is only 3 yrs, then she has to pay off or refinance, for another 30 yrs, if staying with same builder's financing. Means she'll pay a silly amount of interest and never own it in her lifetime 🤣

 

We're going to pay it off at the end of first 3 yr stretch, and she can pay the wife back over 15 years, saving half the interest and own in half the time, if she had a real 30 yr mortgage to begin with.  Then rent will be all profit, instead of mortgage payment, as it's an investment property.

 

For those that can't pay off early, simply paying additional principle every month, as daughter is also doiig, really drops the amount of interest the bank will get along with earlier pay off.

 

Use this calculator to see the advantage:

https://www.mortgagecalculator.org/calculators/what-if-i-pay-more-calculator.php#top

 

Never get a 30 yr mortgage or one that won't let you pay additional principle monthly or pay off early without penalty.

[jumbo]

Thanks KhunLA

She is allowed to pay down, but with a fine for refinancing with another bank first 3 year.

I guess she will have to talk to the bank about restructuring....

[KhunLA]

51 minutes ago, jumbo said:

Thanks KhunLA

She is allowed to pay down, but with a fine for refinancing with another bank first 3 year.

I guess she will have to talk to the bank about restructuring....

They should realize they make more money, if they restructure the loan to 20 or 15 yrs instead of just a onetime penalty, then no future interest earned for them.