Expats Can Get Condo Loans From Bangkok Bank

[Kaojai]

why anybody would risk money in this financially unstable and corrupt part of the world is beyond me.

Considering what's been happening in terms of US subprime loans and property values, as well as those in the UK, Ireland, Spain, etc. , I would think a lot of people in Florida, Las Vegas, etc are saying the same thing. The present credit & banking crisis that's hitting the entire world belongs to Citibank, Bear Stearns, Countrywide, UBS, Northern Rock ... none of which is based in this corrupt part of the world. Even the Swiss are not immune.

I took money out of the US stock market before it swooned in 1999, bought a condo in this corrupt part of the world. I have no plans to sell, but the selling prices for similar units now is several times what I paid. Had I paid rent for all those years, I would have paid more in total.

At that time, the Dow Jones Industrial Average was at about 11,250. It's now 12,594. Over that period, that's about a 12% increase ... in total. I realize my timing was fortunate due to dumb luck and future prospects may be markedly different, but to dismiss the value of owning your own home because this part of the world is allegedly more corrupt or financially unstable is just mental masturbation on the part of those who have some fictional fantasy about both this part of the world and the ludicrous assumption that corruption and instability don't exist in the west.

Like I said, banks other than the American sub prime lenders tend to be pretty conservative worldwide.

Banks everywhere, including allegedly conservative Swiss Banks Credit Suisse and UBS, and UK's Northern Rock are all involved in this mess, and Barings went down in flames in 1995. Greed, rather than conservative banking practices, exists everywhere. Edited May 29, 2008 by Kaojai

[Kaojai]

Examples of alleged financial stability in the highly regulated west:

25 January, 2008 - Published 16:24 GMT

French rogue trader costs bank 7bn dollars

France's second largest bank, Societe Generale, has filed a legal complaint against the trader accused of defrauding the bank which led to a loss of 4.9bn euros ($7.1bn).

ZURICH (Reuters) - Swiss bank UBS could face billions of dollars more in subprime-related write-downs in 2008, which could tip it into a second year of losses, analysts warned investors, sending its shares tumbling again.

Some said UBS might be only halfway through clearing the debris from the subprime loan disaster that has already saddled it with $18 billion in charges in 2007.

Germany's finance minister, Peer Steinbrück, blamed the Bank of England yesterday for the collapse of Northern Rock and the loss of 2,000 jobs, savaging the central bank for not pumping enough liquidity into money markets last year.

Unlike the central banks of the US and EU, the Bank of England failed to support the banking sector with vital loans, Steinbrück told the German parliament. He said the main reason Germany and the US avoided a run on a bank was the swift reaction of the European Central Bank and the Federal Reserve to lend billions at crucial moments. The day after the markets began to seize up in August the ECB injected €61bn (£41bn) into the system.

[jmsbkk]

Actually, I got a loan from Bangkok Bank (in Bangkok) as long ago as 2001. It was for a 64 sq metre apartment in central Bangkok that cost 2 million baht and the loan was for 1.2 million baht. I got it with the click of a finger. Of course, in 2001 they were desperately trying to get the property market re-activated; however, it just shows that anything is possible in Thailand even when you're told that it's not!!

JMS

2 million for 64 square metres.

Others buy a house for less.

This one post is THE typical posting of a farang in Bangkok who is clueless. Nothing like getting it totally wrong and then showing the world to see

[jmsbkk]

Actually, I got a loan from Bangkok Bank (in Bangkok) as long ago as 2001. It was for a 64 sq metre apartment in central Bangkok that cost 2 million baht and the loan was for 1.2 million baht. I got it with the click of a finger. Of course, in 2001 they were desperately trying to get the property market re-activated; however, it just shows that anything is possible in Thailand even when you're told that it's not!!

JMS

2 million for 64 square metres.

Others buy a house for less.

This one post is THE typical posting of a farang in Bangkok who is clueless. Nothing like getting it totally wrong and then showing the world to see

YEP!!..........particularly as its in the CBD

JMS

[sibeymai]

i have had experiences with Bangkok Bank. They would check up your whole family background down to where your grandmother had her lunches back home.. and if they are alright with it:

they would rob your with all kinds of different fees. what kind of margins we looking at beyond the base lending rate? you do the calculation. like someone else mentioned, never invest in thailand more than what you can walk away from ..

Bangkok Bank committed to a loan so I paid the deposit and signed a contract. The bank then renegged and I lost the deposit. Did the bank feel responsible in any way for my loss ? Not a chance. Lying, thieving bastards is the best way I can describe them.

Edited May 29, 2008 by sibeymai

[thaigene2]

Yeah - I did a rough estimate of the costs to the borrower assuming a 15 - 20 year mortgage which I think is probably about right if you're mid 40's. Remember, you need to show all these previous years earnings etc...so the 40's guy is about right for the following:

At 200,000 principle (minimum they will lend - assuming you have place down 100,000 of your own dosh) repayments are 55,000 baht/month (15 yrs) and about 48,000 for a 20 year mortgage.

Pretty heavy duty - no? Maybe you can handle it for a year or two - but if you're relying on your income, how long can you keep it up - month after month? 5 years? 10 years? 12 years? 15 years - as you get older and older and no wants to employ you? It's the real world..And it's not a nice place...but it's the one we live in.

If you have the cash to just pay it outright of course then this is all academic and a waste of time to read..

A quick edit to say the above figures are based on 7% average interest rates.

Edited May 29, 2008 by thaigene2

[thaigene2]

i have had experiences with Bangkok Bank. They would check up your whole family background down to where your grandmother had her lunches back home.. and if they are alright with it:

they would rob your with all kinds of different fees. what kind of margins we looking at beyond the base lending rate? you do the calculation. like someone else mentioned, never invest in thailand more than what you can walk away from ..

Bangkok Bank committed to a loan so I paid the deposit and signed a contract. The bank then renegged and I lost the deposit. Did the bank feel responsible in any way for my loss ? Not a chance. Lying, thieving bastards is the best way I can describe them.

I went through something similar with SCB. Once bitten twice shy. I'd never go down this road again unless I was pretty certain I could live here over the long term and would not face an exit order after having sunk 50% equity into a place that I could no longer inhabit due to ever-changing visa rules! To me the whole thing hinges on visa rules - for the life of me I don't understand why they (Thai Govt) doesn't see that. We're hardly a threat to the thai and chinese thai community here.

Edited May 29, 2008 by thaigene2

[hyperdimension]

Bangkok Bank committed to a loan so I paid the deposit and signed a contract. The bank then renegged and I lost the deposit. Did the bank feel responsible in any way for my loss ? Not a chance. Lying, thieving bastards is the best way I can describe them.

I went through something similar with SCB. Once bitten twice shy.

I'm interested to know more about these instances in which you guys have been swindled of your cash by the bank. Were you genuinely cheated by the banks and did you pursue legal action?

I've been cheated countless times in Thailand, but up to now I would not have thought that companies like Bangkok Bank or SCB would scam people.

[Ozziepaul]

There's NO WAY in a zillion years that I would EVER invest such a sum in LOS.

With such uncertainty, other than the corruption, it would be pure madness.

US$300,000 at an average income stream of 8.5% would return more than enough for us to continue renting a very breautiful place in CM and still have the best part of 20K Baht left for the month, with the option to travel when we want, leave when we want etc.

Each to their own of course, but my pea brain screams in utter distress when I try to entertain it with investment ideas in Thailand.

We've had enough taken out of our pockets already, there's no chance in H-LL that we would virtually hand it to them on a platter.

Everyone who has been here/there for some time know's that in the fullness of time and twists, it would be a given that the money would somehow VANISH, or have to relinquished.

Investment, pigs a-se, Russian roulette with 5 loaded barrels more like it.

Cheers n beers.

Big P.

[tigerbeer]

I've been cheated countless times in Thailand, but up to now I would not have thought that companies like Bangkok Bank or SCB would scam people.

they are thieves thriving in broad daylight.

[Seneque]

The bank also needs to quote floating interest rates

i have a kind of sinking feeling

[zorro1]

There's NO WAY in a zillion years that I would EVER invest such a sum in LOS.

With such uncertainty, other than the corruption, it would be pure madness.

US$300,000 at an average income stream of 8.5% would return more than enough for us to continue renting a very breautiful place in CM and still have the best part of 20K Baht left for the month, with the option to travel when we want, leave when we want etc.

Each to their own of course, but my pea brain screams in utter distress when I try to entertain it with investment ideas in Thailand.

We've had enough taken out of our pockets already, there's no chance in H-LL that we would virtually hand it to them on a platter.

Everyone who has been here/there for some time know's that in the fullness of time and twists, it would be a given that the money would somehow VANISH, or have to relinquished.

Investment, pigs a-se, Russian roulette with 5 loaded barrels more like it.

Cheers n beers.

Big P.

Poor advice unless your 80. Zero capital growth and barley above inflation rate . Its dead money so you should at least invest in something other than a fixed interest rate.

The bit I have underlined for you shows everyone here that your either childish or a magician

Edited May 30, 2008 by zorro1

[A_Traveller]

^ However, property capital growth {it is in fact not real wealth creation} only becomes relevant when it can be liquidated or traded. In this skewed marketplace such activities are artificially constrained, and in all likelihood will remain so for the foreseeable future, so the argument is specious.

Regards.

[zorro1]

I didn't say he had to invest here if you re read my post

[A_Traveller]

^ Hm.. you did say you were a sales trainer I recall. The thread is about the reality of property investment in Thailand and the underlying value proposition of the BBL offer for foreign investment in mortgageable properties.

Regards

[Naam]

Actually, I got a loan from Bangkok Bank (in Bangkok) as long ago as 2001. It was for a 64 sq metre apartment in central Bangkok that cost 2 million baht and the loan was for 1.2 million baht. I got it with the click of a finger. Of course, in 2001 they were desperately trying to get the property market re-activated; however, it just shows that anything is possible in Thailand even when you're told that it's not!!

JMS

2 million for 64 square metres.

Others buy a house for less.

some people build pools for 2 million

[zorro1]

^ However, property capital growth {it is in fact not real wealth creation} only becomes relevant when it can be liquidated or traded. In this skewed marketplace such activities are artificially constrained, and in all likelihood will remain so for the foreseeable future, so the argument is specious.

Regards.

This is standard information and basically says buyer beware. Point taken re your previous post

[NOKIA6969]

Classic Thailand!!! Bank is going to woo farangs with great home loans .They must think most big fat whitie's are nitwits.How many thais can afford a condo or house for over 9 million baht.

Definetly less than 1% of the population.And none would buy them anyway theyre so badly built. I have looked at dozens of new houses in Bangkok and they are very poorly built with crusty little bricks covered in cheap stucco(cement) You could seriously damage the walls by knocking things into them theyre so flimsy. and no insulation in the roof!There are thousands of empty condos and houses in BKK,Chonburi and anywhere you find us farangs.Many condos are built with the cheapest materials such as Cambodian cement/concrete and small gauge steel enforcemnt rods! Look out !!!

I WOULD LOVE TO HEAR MORE ABOUT THIS . AS A BRIT MARKETING REFURBISHED CONDOS FROM THE HIGHT OF THE LAST CRASH HERE, IT WOULD DEFINATLY BE A STRING TO MY BOW !

[A_Traveller]

^ Hm, the first lesson in computer usage. discover and check the [Caps Lock] key so you don't appear to be shouting.

Regards

[thaigene2]

Bangkok Bank committed to a loan so I paid the deposit and signed a contract. The bank then renegged and I lost the deposit. Did the bank feel responsible in any way for my loss ? Not a chance. Lying, thieving bastards is the best way I can describe them.

I went through something similar with SCB. Once bitten twice shy.

I'm interested to know more about these instances in which you guys have been swindled of your cash by the bank. Were you genuinely cheated by the banks and did you pursue legal action?

I've been cheated countless times in Thailand, but up to now I would not have thought that companies like Bangkok Bank or SCB would scam people.

No - nothing like that. They just changed the rules part way through a transaction - that resulted in my loss. They partly made it up.

[sibeymai]

Bangkok Bank committed to a loan so I paid the deposit and signed a contract. The bank then renegged and I lost the deposit. Did the bank feel responsible in any way for my loss ? Not a chance. Lying, thieving bastards is the best way I can describe them.

I went through something similar with SCB. Once bitten twice shy.

I'm interested to know more about these instances in which you guys have been swindled of your cash by the bank. Were you genuinely cheated by the banks and did you pursue legal action?

I've been cheated countless times in Thailand, but up to now I would not have thought that companies like Bangkok Bank or SCB would scam people.

No - nothing like that. They just changed the rules part way through a transaction - that resulted in my loss. They partly made it up.

Pretty much the same. Bangkok bank committed to a loan at 70% of the bank's valuation so I paid the deposit so the loan documentation could be processed (the bank would not accept the loan application without proof that the deposit had been paid). Then they processed the loan application and offered only 50% of the valuation. I wasn't prepared to make up the additional 20% so had to walk away.

The bank made money from the valuation and loan application/processing fees which are non-refundable. The vendor kept the deposit, as is their entitlement under most contract terms. The bank could not care less. The vendor tried to help with alternative financing and even asked their own bank (SCB) who tried to help but head office wouldn't approve a loan for second hand property (100sq.w. house on Sukhumvit 103, soi 48).

Had it not been for the vendor's help (they held the property for us for 6 months while we tried to sort this out) I would consider this to be an excellent scam for bank's loan officers/managers and vendors to part farangs from their cash and share the spoils.

For the icing on the cake, I;ve held an account with Bangkok Bank for 10 years with millions of baht going through the account to and from Thailand. All counted for naught.

AFAIK, there is no legal recourse against the bank.

I will never consider buying property in Thailand again other than for 100% cash with always the consideration that I may not be able to realise a single baht in the future.

[Tony Clifton]

A USD $300,000 condo must be the perfect place to keep your elite card.

Or hide from your neighbours dog!

Should read 3 snarling dogs.

[steveromagnino]

Pretty much the same. Bangkok bank committed to a loan at 70% of the bank's valuation so I paid the deposit so the loan documentation could be processed (the bank would not accept the loan application without proof that the deposit had been paid). Then they processed the loan application and offered only 50% of the valuation. I wasn't prepared to make up the additional 20% so had to walk away.

The bank made money from the valuation and loan application/processing fees which are non-refundable. The vendor kept the deposit, as is their entitlement under most contract terms. The bank could not care less. The vendor tried to help with alternative financing and even asked their own bank (SCB) who tried to help but head office wouldn't approve a loan for second hand property (100sq.w. house on Sukhumvit 103, soi 48).

All THai buyers face the exact same thing; I am surprised you were not aware that a bank valuation here is usually rnuning around 40-60% of the property current value on the market.

Certainly no form of scam against farangs, this is standard bank practice; I have a loan for 70% of the property value they assessed at about 70% of the value of the property I paid; meaning about 50% equity, 50% loan.

The fact is that in the last 8 years, property particularly inner city property has been one of the best plays; on both the stock market as well as the units themselves. There are fundamental reasons why the prices aren't going to drop much from today's levels for decent quality stuff, and that's about how much it costs to build; rents have been keeping pace in commercial, and we probably will see some sort of a jump in residential at some point, but the yields remain way too low for my interest.

However, $200k USD and 50,000b a month; that is a drop in the bucket, seriously no one is actually suggesting that this is in any way strenuous as a repayment schedule are they???

[Kerryd]

I WOULD LOVE TO HEAR MORE ABOUT THIS . AS A BRIT MARKETING REFURBISHED CONDOS FROM THE HIGHT OF THE LAST CRASH HERE, IT WOULD DEFINATLY BE A STRING TO MY BOW !

^ Hm, the first lesson in computer usage. discover and check the [Caps Lock] key so you don't appear to be shouting.

Regards

You forgot to mention that "spell checker" thingy too !

And if Mr Nokia6969 were to read through some of the earlier posts in this thread, he would see that the "2nd hand" market for property (refurbished condos for example) is apparently quite difficult to finance.

There was a saying I heard long ago, something about how the banks are more than willing to loan money to people that don't need it (i.e. rich people) ?

[sibeymai]

Pretty much the same. Bangkok bank committed to a loan at 70% of the bank's valuation so I paid the deposit so the loan documentation could be processed (the bank would not accept the loan application without proof that the deposit had been paid). Then they processed the loan application and offered only 50% of the valuation. I wasn't prepared to make up the additional 20% so had to walk away.

The bank made money from the valuation and loan application/processing fees which are non-refundable. The vendor kept the deposit, as is their entitlement under most contract terms. The bank could not care less. The vendor tried to help with alternative financing and even asked their own bank (SCB) who tried to help but head office wouldn't approve a loan for second hand property (100sq.w. house on Sukhumvit 103, soi 48).

All THai buyers face the exact same thing; I am surprised you were not aware that a bank valuation here is usually rnuning around 40-60% of the property current value on the market.

Certainly no form of scam against farangs, this is standard bank practice; I have a loan for 70% of the property value they assessed at about 70% of the value of the property I paid; meaning about 50% equity, 50% loan.

The fact is that in the last 8 years, property particularly inner city property has been one of the best plays; on both the stock market as well as the units themselves. There are fundamental reasons why the prices aren't going to drop much from today's levels for decent quality stuff, and that's about how much it costs to build; rents have been keeping pace in commercial, and we probably will see some sort of a jump in residential at some point, but the yields remain way too low for my interest.

However, $200k USD and 50,000b a month; that is a drop in the bucket, seriously no one is actually suggesting that this is in any way strenuous as a repayment schedule are they???

Understand what you're saying about bank valuation versus market price. However, it does not apply in this case since the bank's valuation was the same as the market price (I was getting a very good deal ! Maybe the manager from the bank bought the house instead).

The bank's stated policy was at the time up to 95% (I think) valuation for Thais and 70% for foreigners, subject to meeting the lending criteria. I had already established with the bank that I met the lending criteria for 70% before I considered paying any deposit.

The bank arbitrarily applied a 50% limit after telling me (and the whole world since it's documented on their web site and other documents) that they would loan foreigners up to 70% valuation. No explanation given for the reduction. A very shabby way to treat a long established customer.

I can only believe that I was the victim of discrimination as a foreigner. Nothing new in Thailand, but usually it's not so expensive.

[guava]

Bangkok Bank committed to a loan so I paid the deposit and signed a contract. The bank then renegged and I lost the deposit. Did the bank feel responsible in any way for my loss ? Not a chance. Lying, thieving bastards is the best way I can describe them.

I too am curious about this, as my understanding is that the buyer is entirely protected when they have a basic "subject to finance" clause in the contract. The deposit is held by a third party (solicitor or the vendor's real estate agent), and would never pass to the vendor until the sale is finalised.

When you say the bank committed then reneged, they only committed verbally initially? From the way you described it, the bank's behavious sounds annoying, but they're not really responsible for you losing your deposit.

Even if they did commit in writing, and then renegged at the 11th hour, I'd imagine you'd have every right to get your deposit back no matter who's hands it was in?

I'm not saying the story is <deleted>, but I'm trying hard to imagine the circumstances under which this could happen. I really would like to know the timeline and details, so that other people don't make similar mistakes. There's enough things to worry about when buying property anywhere without worrying about shenanigans from banks, solicitors, etc. If you've sought/received legal advice, what was it?

[guava]

Sample lending rates (for Thais/companies)

4.25% fixed for 12 months

MLR - 0.25 (Current MLR is 6.875 or thereabouts - so 6.625%)

up to 25 year term (possibly 30)

They do say they will only lend 70% of valuation on "2nd hand" condos, up to 90% on brand new condos. In reality they will go higher on both, subject to valuations, other criteria etc etc. I'm sure there's many condos being sold with higher than actual sale prices/valuations used to get the loans approved, almost certainly with the bank's knowledge. I don't know the rates/situation for buying land or houses.

Better rates may be possible, and I've seen various options regarding the fixed interest term (0, 1, or 2 years).

So the 6.5%+ rate is within the ball park, and I certainly agree with what steveromagnino said about farangs overrating themselves as low risk, high value customers to the banks when it comes to lending.

[damocletian]

I always understood the flat rate was not the actual rate repayable which is inevitably more and on a 6.5% loan the true annual cost would equate to approx 8% or more. Nevertheless, that is still competitive in current global terms and may suit someone who has to buy for whatever reasons although I can't imagine in current circs that financial investment would be one of them.

[Heng]

There will of course be some plum that buys into this...same as there are plums that send bar girls money every month

*sound of champagne corks popping at 333 Silom*

[thaigene2]

my understanding is that the buyer is entirely protected when they have a basic "subject to finance" clause in the contract. The deposit is held by a third party (solicitor or the vendor's real estate agent), and would never pass to the vendor until the sale is finalised.

In North America and UK - Not in Thailand. Some legit law firms will offer this service, but it's not mandatory. As for "subject to" clauses and timing for removal of clauses - good luck. Never seen that here either. This is the Wild West - you hand over a deposit, you pray nonething goes wrong, you do your 'due diligence' to ensure that the person selling actually owns the property (doesn't have any liens against it) and that he/she will be handing over a chanote on the day of sale.

You take your money to the Land Office - with a lawyer - where you meet the seller, together you do the transfer there - both parties carefully watching each other to make sure they don't get screwed. You again check to see that no last-minute loans have been secured against the property by the seller, you pay a transfer fee and taxes to the Land Office, the title (Chanote) is signed over to you as you give the seller the remaining balance and your name is registered as the new owner at the Registry office.

There are no 'subject to this-or-that you must give me my money back..' Should be, but it's not standard practice here that's for sure.