Condo Loans For Foreigners

[taxin]

Im seeing articles that Bangkok Bank in Singapore are offering foreigners mortgages for purchasing freehold condos. Upto 70%.

Whats the catch ? Is it another one of those Thai bank offers that are a joke. Somewhere along the lines of "We will loan you 8 million baht, but we want you to place 10 million in an account and not touch it for the duration of the loan !".....

Is the mortgage secured against the Thai property, i.e. the one being purchased ? Is it a country wide offer, or only in Bangkok ?

Would appreciate if there is any industry professionals out there who might know.

Cheers

[trajan]

from the website:

Flexible Options

Bangkok Bank offers a range of loan options tailored to meet your needs. We offer flexible lending and attractively low interest rates.

Borrow up to 70% of the condominium’s appraised value or up to US$800,000

Loans can be denominated in one of four currencies – US Dollars, Singaporean Dollars, Euros and Japanese Yen

Repayment term up to 20 years

Competitive interest rate options available

Loan approval within two weeks of application

Interest Rate Options (subject to change)

Loans in US Dollars : US Dollar Prime +0.5% per annum

Loans in Singaporean Dollars : Bangkok Bank Prime Lending Rate in Singapore per annum

Loans in Euros : Euro Prime +1% per annum

Loans in Japanese Yen : Japanese Yen Prime +1.25% per annum

Bangkok Bank is the first bank in Thailand to provide home loans to non-residents. We understand the regulatory requirements and can help you finance your property purchase. Talk to one of our staff about your dream home!

Fees

The processing fee for this loan is USD 1,750 or equivalent. USD 150 or equivalent of this fee is payable upon submitting the loan request, and the final portion of the fee USD 1,600 or equivalent is payable upon signing contract.

All other expenses such as legal, mortgage costs, valuation fee and fire insurance premium shall be borne by the borrower.

Required Documents

1. Completed Mortgage Loan Application Form

2. Copy of I.D. card (front and back) / passport (essential pages)

3. Signed copy of your Sales & Purchase Agreement or Reserve Agreement

4. A reference letter from your existing bank, addressed to Bangkok Bank Public Co Ltd confirming your relationship with the bank, type of account you hold and the value of any loans or deposits you hold with the bank.

5. Your last six months worth of bank statements

6. A Credit Bureau Report from your country of residence

7. For employees: A letter from your employer, addressed to Bangkok Bank Public Co Ltd confirming your employment position, the number of years you have been employed and your salary, your last two years’ of Income Tax Returns and the last six months’ worth of computerized pay-slips

OR For Self-Employed individuals: The Balance Sheet Profit & Loss Statements from the last two years

8. Others documents upon request

FREQUENTLY ASKED QUESTIONS

1. What currencies does the bank lend in?

The bank will lend in S$, US$, EUR and JPY.

2. Does the bank finance condominiums with a leasehold title?

No, we only consider condominiums with a freehold title.

3. Can the bank provide “pre-approval” for a project and commit to providing a fixed loan amount for a fixed period?

No. Each loan has to be evaluated individually based on the borrower’s repayment ability. However, if a borrower provides us with details of his/her monthly income, we can provide an estimate of the loan amount and the tenure likely to be considered by the bank.

4. Can interest rates be fixed for the entire period of the loan?

No, loans are provided on a “floating” rate basis, i.e. they will be pegged to Bangkok Bank’s Prime Lending Rate. This is to align the loan interest rates to changing market conditions.

5. Can a Thai husband or wife borrow money to purchase property with his or her foreign spouse guaranteeing the loan?

Yes, so long as the bank considers the spouse financially sound and able to service the loan.

6. Can I use money earned in Thailand to pay for part of the cost of a condominium and borrow the balance from Bangkok Bank’s Singapore Branch as an off-shore loan if I am a legal resident in Thailand pursuant to Thai Immigration Laws?

Yes, this is possible. However, you will need to comply with the Bank of Thailand’s regulations and procedures.

7. What criteria would the bank consider when evaluating a loan application?

The bank’s evaluation of a loan application is usually based on the following criteria:

- The loan must be used for the purchase of a residential property.

- The applicant, co-applicant or guarantor must have sufficient income to meet the loan repayments.

- The applicant must not have a bad credit record.

- When added together, the applicant’s age and the loan tenure should not exceed 65 years.

8. How much will the bank lend?

When we consider the amount of the loan, we look at several factors such as current market conditions, the property that the borrower intends to purchase, the financial standing of the borrower and the location of the property. If the borrower provides details of his/her monthly income and the details of the property to be purchased, we are able to give an estimate of the loan amount.

9. What is the maximum term of the loan?

The maximum loan term is 20 years. However, we take the age of the borrower into consideration as well. When added together, the applicant’s age and the loan tenure should not exceed 65 years.

10. How long will it take for my loan to be approved?

It takes about two weeks from the day the bank receives the completed loan application together with the required documents and the processing fee of US$150.00.

11. How will loan repayments be made?

Loan repayments are made on a monthly basis and are based on the remaining principal, the remaining of the loan and the interest for the month.

12. How does the bank calculate the interest owed?

The monthly interest payment is based on the remaining capital owed to the bank.

13. Do I have to pay any valuation fees?

Yes. At present, the valuation fee is about USD120.00 or an equivalent amount in another currency.

14. Is home insurance necessary?

Yes. The property is required to be insured. We can assist you in arranging home protection insurance.

15. Can I sign the legal and mortgage documents outside Thailand?

No, the mortgage documents need to be executed in the presence of our bank’s appointed lawyer who will handle the documents and explain the relevant terms to you.

16. If my income isn’t sufficient, can I still apply for a mortgage loan?

Yes, you can still apply but you will need to provide a guarantor or co-borrower who meets the income requirements.

17. Are there any other fees?

You will need to set aside funds to meet the following additional items:

- Processing fee

- Property appraisal fee

- Legal and mortgage costs

- Fire insurance premium

- Process Agent fee

//

//

BKK Source: Non-Resident Loans (click here)

[bigcat]

from the website:

Flexible Options

Bangkok Bank offers a range of loan options tailored to meet your needs. We offer flexible lending and attractively low interest rates.

etc.

Not the info I was given two weeks ago at Bangkok Bank Asoke Branch, which was 40-50% down, max repayment term 10 years. But as most of us know, what one person says may not be what the actual situation is. I'd call up their head office or email them.

[thaigene2]

from the website:

Flexible Options

Bangkok Bank offers a range of loan options tailored to meet your needs. We offer flexible lending and attractively low interest rates.

etc.

Not the info I was given two weeks ago at Bangkok Bank Asoke Branch, which was 40-50% down, max repayment term 10 years. But as most of us know, what one person says may not be what the actual situation is. I'd call up their head office or email them.

Some of the banks are now lending again in Thai baht to foreigenrs. Check UOB, Standard Charter, HSBC and perhaps even SCB. So the repayment is in Thai baht, but as with BBL there are big up front fees, and the way they calculate the interest seems a bit unexplained really. Does that mean they charge you the same way they charge on outstanding credit card fees? No thanks if that's the case.

[kanderson]

I think most buyers pay cash or obtain finacing in their home country.

I bought a small condo in Jomtien for around the same price as a new car - not possible here in Hawaii. I got it for my Thai Wife as well.

If you want to finance - maybe marry a Thai woman. Best plan is to pay cash.

Buy a condo in your own name. That is the plan. Very easy - no problems.

[taxin]

from the website:

Flexible Options

Bangkok Bank offers a range of loan options tailored to meet your needs. We offer flexible lending and attractively low interest rates.

Borrow up to 70% of the condominium’s appraised value or up to US$800,000

Loans can be denominated in one of four currencies – US Dollars, Singaporean Dollars, Euros and Japanese Yen

Repayment term up to 20 years

Competitive interest rate options available

Loan approval within two weeks of application

Interest Rate Options (subject to change)

Loans in US Dollars : US Dollar Prime +0.5% per annum

Loans in Singaporean Dollars : Bangkok Bank Prime Lending Rate in Singapore per annum

Loans in Euros : Euro Prime +1% per annum

Loans in Japanese Yen : Japanese Yen Prime +1.25% per annum

Bangkok Bank is the first bank in Thailand to provide home loans to non-residents. We understand the regulatory requirements and can help you finance your property purchase. Talk to one of our staff about your dream home!

Fees

The processing fee for this loan is USD 1,750 or equivalent. USD 150 or equivalent of this fee is payable upon submitting the loan request, and the final portion of the fee USD 1,600 or equivalent is payable upon signing contract.

All other expenses such as legal, mortgage costs, valuation fee and fire insurance premium shall be borne by the borrower.

Required Documents

1. Completed Mortgage Loan Application Form

2. Copy of I.D. card (front and back) / passport (essential pages)

3. Signed copy of your Sales & Purchase Agreement or Reserve Agreement

4. A reference letter from your existing bank, addressed to Bangkok Bank Public Co Ltd confirming your relationship with the bank, type of account you hold and the value of any loans or deposits you hold with the bank.

5. Your last six months worth of bank statements

6. A Credit Bureau Report from your country of residence

7. For employees: A letter from your employer, addressed to Bangkok Bank Public Co Ltd confirming your employment position, the number of years you have been employed and your salary, your last two years’ of Income Tax Returns and the last six months’ worth of computerized pay-slips

OR For Self-Employed individuals: The Balance Sheet Profit & Loss Statements from the last two years

8. Others documents upon request

FREQUENTLY ASKED QUESTIONS

1. What currencies does the bank lend in?

The bank will lend in S$, US$, EUR and JPY.

2. Does the bank finance condominiums with a leasehold title?

No, we only consider condominiums with a freehold title.

3. Can the bank provide “pre-approval” for a project and commit to providing a fixed loan amount for a fixed period?

No. Each loan has to be evaluated individually based on the borrower’s repayment ability. However, if a borrower provides us with details of his/her monthly income, we can provide an estimate of the loan amount and the tenure likely to be considered by the bank.

4. Can interest rates be fixed for the entire period of the loan?

No, loans are provided on a “floating” rate basis, i.e. they will be pegged to Bangkok Bank’s Prime Lending Rate. This is to align the loan interest rates to changing market conditions.

5. Can a Thai husband or wife borrow money to purchase property with his or her foreign spouse guaranteeing the loan?

Yes, so long as the bank considers the spouse financially sound and able to service the loan.

6. Can I use money earned in Thailand to pay for part of the cost of a condominium and borrow the balance from Bangkok Bank’s Singapore Branch as an off-shore loan if I am a legal resident in Thailand pursuant to Thai Immigration Laws?

Yes, this is possible. However, you will need to comply with the Bank of Thailand’s regulations and procedures.

7. What criteria would the bank consider when evaluating a loan application?

The bank’s evaluation of a loan application is usually based on the following criteria:

- The loan must be used for the purchase of a residential property.

- The applicant, co-applicant or guarantor must have sufficient income to meet the loan repayments.

- The applicant must not have a bad credit record.

- When added together, the applicant’s age and the loan tenure should not exceed 65 years.

8. How much will the bank lend?

When we consider the amount of the loan, we look at several factors such as current market conditions, the property that the borrower intends to purchase, the financial standing of the borrower and the location of the property. If the borrower provides details of his/her monthly income and the details of the property to be purchased, we are able to give an estimate of the loan amount.

9. What is the maximum term of the loan?

The maximum loan term is 20 years. However, we take the age of the borrower into consideration as well. When added together, the applicant’s age and the loan tenure should not exceed 65 years.

10. How long will it take for my loan to be approved?

It takes about two weeks from the day the bank receives the completed loan application together with the required documents and the processing fee of US$150.00.

11. How will loan repayments be made?

Loan repayments are made on a monthly basis and are based on the remaining principal, the remaining of the loan and the interest for the month.

12. How does the bank calculate the interest owed?

The monthly interest payment is based on the remaining capital owed to the bank.

13. Do I have to pay any valuation fees?

Yes. At present, the valuation fee is about USD120.00 or an equivalent amount in another currency.

14. Is home insurance necessary?

Yes. The property is required to be insured. We can assist you in arranging home protection insurance.

15. Can I sign the legal and mortgage documents outside Thailand?

No, the mortgage documents need to be executed in the presence of our bank’s appointed lawyer who will handle the documents and explain the relevant terms to you.

16. If my income isn’t sufficient, can I still apply for a mortgage loan?

Yes, you can still apply but you will need to provide a guarantor or co-borrower who meets the income requirements.

17. Are there any other fees?

You will need to set aside funds to meet the following additional items:

- Processing fee

- Property appraisal fee

- Legal and mortgage costs

- Fire insurance premium

- Process Agent fee

//

//

BKK Source: Non-Resident Loans (click here)

"Each loan has to be evaluated individually based on the borrower’s repayment ability."......

No mention of it being a secured or unsecured loan, only based on "repayment ability".

The big question is really, how do they cover there risk ? Is the loan secured against the property you are buying ? In other words will the property be used as collateral to cover risk ?

Or will it be the typical Thai bank rule which is, "We will only give you a loan if you have enough money in the bank that you actually dont need one, and you could comfortably pay for it in cash anyway" ?

[trajan]

No mention of it being a secured or unsecured loan, only based on "repayment ability".

The big question is really, how do they cover there risk ? Is the loan secured against the property you are buying ? In other words will the property be used as collateral to cover risk ?

....its a mortgage loan (hence the term "Mortgage Loan Application")....they secure the loan with a registered mortgage on the freehold condo.....

[taxin]

No mention of it being a secured or unsecured loan, only based on "repayment ability".

The big question is really, how do they cover there risk ? Is the loan secured against the property you are buying ? In other words will the property be used as collateral to cover risk ?

....its a mortgage loan (hence the term "Mortgage Loan Application")....they secure the loan with a registered mortgage on the freehold condo.....

Sure, thats the perception of a mortgage in the western world. But is that how the Thais perceive it ?

Im not convinced.