How Much Money Can I Borrow For New House On 72k Month Income?

[Lopburi99]

Hello. The wife and I will soon be looking to buy a new home. We may build new, or buy an existing home, not sure at this time. However, I have no idea how much bank financing may be available to me. I am 62, U.S. retiree, the wife is Thai, 48. My Social Security income is about 72K bt/month. Wife's home is paid for (she paid 450K for it about 3 years ago). The plan is to keep this home for her children's use so this home could be used as collateral if required by the lending institution.

I would prefer buying under a land contract (or whatever related term is used here for seller financing) but I doubt if we would be lucky enough to find a seller able to offer this. So, I guess we have no other option but to go to the bank. I think my wife's credit history here is at least average, probably better but I have no idea of knowing. Any idea how much we could borrow for our new home? Would my credit history back in the U.S. be checked ? Is the home financing process easy in Thailand, or lengthy and time consuming as in the states?

[trogers]

My guess is that the bank would estimate an affordable Bt24,000/month repayment. Loan principal would be about Bt2m for a period of 10 years (since your wife is now 48). Value of property (land plus house) would be Bt3m. That means you need Bt1m cash to purchase a Bt3m property.

Try talking with Kasikorn bank.

Edited April 22, 2009 by trogers

[bojo]

A mortgage takes up to 2 months to process and would have to be applied for in your wife's name and no credit checks needed for foreign spouse. How much you can borrow depends on wife's income and would be up to 70% or 90% (of banks valuation)on a new housing estate development.

regards Bojo

[Crossy]

We had a good dialogue with Thai Farmers Bank (now Kasikorn) in the end we didn't borrow for various reasons (wish we had now ).

Best bet is to send Wifey off round the local branches and see what's available. Does she have her own income (and thus be good for a mortgage without involving you)?

[Lopburi99]

My guess is that the bank would estimate an affordable Bt24,000/month repayment. Loan principal would be about Bt2m for a period of 10 years (since your wife is now 48). Value of property (land plus house) would be Bt3m. That means you need Bt1m cash to purchase a Bt3m property.

Try talking with Kasikorn bank.

Thanks guys. Can I assume from your numbers that about 33% down is always required? Or were you estimating we would want an approx Bt3m property but could only finance Bt2m of it? Also, would the monthly payment of our new car payment (our only financial obligation) reduce the bank's estimation of our ability to afford from Bt24,000/month or is their loan ratio based on total income only?

[trogers]

My guess is that the bank would estimate an affordable Bt24,000/month repayment. Loan principal would be about Bt2m for a period of 10 years (since your wife is now 48). Value of property (land plus house) would be Bt3m. That means you need Bt1m cash to purchase a Bt3m property.

Try talking with Kasikorn bank.

Thanks guys. Can I assume from your numbers that about 33% down is always required? Or were you estimating we would want an approx Bt3m property but could only finance Bt2m of it? Also, would the monthly payment of our new car payment (our only financial obligation) reduce the bank's estimation of our ability to afford from Bt24,000/month or is their loan ratio based on total income only?

There are two aspects to evaluation by the bank. First, the comfort level of the monthly payments = total income less cost of living of dependables and less other financial obligations (car payments).

Second, the valuation of the landed property. If you are buying from a new development, loan can be up to 80% of developer's price. If you are buying a old property, I estmate valuation to be 80% of market price and the loan is 80% of the valuation - thus about 2/3 of market price.