Government Housing Bank Refused House Loan

[ThaiSunshine]

One of my friends claims that Government Housing Bank rejected his Thai wife's housing loan application because she was married to a foreigner!

My friend emailed them to ask why and this was the reply he got:

"We would like to explain Thai people who married with a foreigner, they no longer have the right to purchase a house in Thailand."

In my opinion this is not true!

And I told my friend to ask for a copy of this law.

Then my friend got this reply back from the bank:

"We would like to explain that the condition about Thai people who get married with a foreigner, is not mentioned in Thai law but it is the condition of Government Housing Bank that if Thai national get married with a foreigner, they no longer have the right to purchase land in Thailand. They can only have ownership in a condominium unit or buy a condominium unit. And another thing is each bank has different rules or policies in housing loan."

Well .... seems Government Housing Bank interprets the law differently than all other Thai banks I've been in contact with.

So those of you considering a housing loan I suggest that you do not waste your time at Government Housing Bank

Edited December 2, 2009 by ThaiSunshine

[zazo]

This is not true about five years ago my wife is thai and I am English went into Siam Commerical Bank Phuket Town to ask for a mortage they fell over them selfs to say yes our house was 5 million baht and we ask for 2 million they said do we want more we said no thanks we got it fixed rate 3% for 3 years since repaid the loan with no penaltes give them a try good luck

[Stumbo]

Well, we have a government bludge-fest populated by loafing petty public servants lording it over the Thais, who can probably make up any racist regulation they like. Not as if anyone upstairs will care.

I agree it is yet another disgusting show of blatant xenophobia, however as they say TIT so get used to it. Pay cash for everything and screw the b*stards down on price.

[gregb]

I've mentioned this several times on various threads.

Yes, GHB will not loan to Thai's married to foreigners to purchase houses. They will loan on a condo however. I found out directly from Khan Prachuabmoh's staff. Can't go any higher than that. This is a policy of the bank based on their legal interpretation of the law, and it will not change.

Non government banks have been less stringent about this particular reading of the law.

You can read the thread on Thai spouses acting as nominees when buying houses for a more complete discussion of why this is. The basic idea is that while you are married, your income is considered a joint marital asset, and this is what would be used to pay back the mortgage. Joint marital assets may not be used to purchase land in Thailand where the union includes a non Thai. If it were allowed, that would give the non Thai spouse a claim on the land. This seems to be backed up by divorce cases. If you have a claim on the land, you can not legally sign the document at the land office that says the assets used to purchase the land were solely from the Thai partner. Hence, there is no legal way you can register the house, and they will not underwrite the loan.

You can agree or disagree with it, but it won't change their opinion.

Edited December 2, 2009 by gregb

[PattayaParent]

Government Housing Bank is set up to provide loans to poor Thais and they do not consider a Thai married to a Farang to be poor as all Farangs are rich.

They also won't sell condos in the Government Housing blocks to Thais married to Farangs as my mate and his missus were told when they tried to buy into those blocks on the top end of Thepprasit in Pattaya when they were first built.

[hansnl]

Government Housing Bank is set up to provide loans to poor Thais and they do not consider a Thai married to a Farang to be poor as all Farangs are rich.

They also won't sell condos in the Government Housing blocks to Thais married to Farangs as my mate and his missus were told when they tried to buy into those blocks on the top end of Thepprasit in Pattaya when they were first built.

That is true.

However, it is not a rule used by all branches.

[ThaiSunshine]

I have been married 4 years with my Thai wife....last week we applied for a house loan in 5 different Thai banks....just to compare and choose the best offer.

All 5 Thai banks accepted to lend my wife money, but we choose Islam Bank, as they do not ask for interests. Not that there is no charges, we had to pay 140,000 THB as a fee over the period the loan is running. The loan has to be paid in full within 15 years. So I found that 140,000 THB in "interest" over 15 years is a very good offer! That is only 9,333 THB per year or 777 THB/month. Not too bad. HOwever if we want to pay out the loan in full within say 3 years, then the "fee" is still 140,000 THB

[skybluestu]

Thankfully not all banks here interpret the law the same as GHB do!

http://www.ktb.co.th/en/products_services/...an_subtawee.jsp

[torrenova]

Fairly easy to explain as it is essentially for poor Thais without recourse to western riches !

[lopburi3]

Well I can well understand why the GHB says that as the law says the money used must belong to the Thai only and if asking for a loan it would appear the Thai does not have the money required and marriage income would be required to pay the mortgage and thus in violation of the law.

[junkofdavid2]

I have been married 4 years with my Thai wife....last week we applied for a house loan in 5 different Thai banks....just to compare and choose the best offer.

All 5 Thai banks accepted to lend my wife money, but we choose Islam Bank, as they do not ask for interests. Not that there is no charges, we had to pay 140,000 THB as a fee over the period the loan is running. The loan has to be paid in full within 15 years. So I found that 140,000 THB in "interest" over 15 years is a very good offer! That is only 9,333 THB per year or 777 THB/month. Not too bad. HOwever if we want to pay out the loan in full within say 3 years, then the "fee" is still 140,000 THB

But, exactly how much was the total loan?

If you borrowed 200,000 baht, then 140,000 fee is EXPENSIVE.

[skybluestu]

Well I can well understand why the GHB says that as the law says the money used must belong to the Thai only and if asking for a loan it would appear the Thai does not have the money required and marriage income would be required to pay the mortgage and thus in violation of the law.

But why don't all banks interpret the law like that then? This is from the KTB website re home loans

'Thai nationality. If applicants have foreigner spouse, the spouse can be co-borrowers. (Foreigners cannot be borrower even though they have Thai work permit.)'

[hhgz]

"If you borrowed 200,000 baht, then 140,000 fee is EXPENSIVE."

Over a 15-year period, the 140K fee is reasonable. Too, if a farang has to borrow 200K THB, he shouldn't be in Thailand.

[lopburi3]

Well I can well understand why the GHB says that as the law says the money used must belong to the Thai only and if asking for a loan it would appear the Thai does not have the money required and marriage income would be required to pay the mortgage and thus in violation of the law.

But why don't all banks interpret the law like that then? This is from the KTB website re home loans

'Thai nationality. If applicants have foreigner spouse, the spouse can be co-borrowers. (Foreigners cannot be borrower even though they have Thai work permit.)'

I suspect because it is an untested area and commercial banks have more incentive to make money. As for the quote believe that is in reference to non land sales - condo or building itself. When land is involved the requirement becomes Thai money only/Thai ownership only.

[skybluestu]

Well I can well understand why the GHB says that as the law says the money used must belong to the Thai only and if asking for a loan it would appear the Thai does not have the money required and marriage income would be required to pay the mortgage and thus in violation of the law.

But why don't all banks interpret the law like that then? This is from the KTB website re home loans

'Thai nationality. If applicants have foreigner spouse, the spouse can be co-borrowers. (Foreigners cannot be borrower even though they have Thai work permit.)'

I suspect because it is an untested area and commercial banks have more incentive to make money. As for the quote believe that is in reference to non land sales - condo or building itself. When land is involved the requirement becomes Thai money only/Thai ownership only.

You can apply for Suptawee housing loan to

• Buy condominium up to 80% granted amount of appraised securities value
  
• Buy land with house, townhouse, condominium unit, or commercial buildings up to 90% granted amount of appraised securities value
  
• Buy land and building houses up to 90% granted amount of appraised securities value
  
• Build houses on own land or spouse land up to 90% granted amount of appraised securities value
  
• Renovate, extend, or fix the residences up to 90% granted amount of appraised securities value
  
• Refinance land or building with former debt with above purpose consider the maximum limit of 90% of appraised securities value
  
• Project Finance based on 1-5 case consider the maximum limit of 100% of appraised securities value
  
• In case 1-7, if the price is from 10 million baht consider the maximum limit of 70% of appraised securities value
  

[gregb]

Well I can well understand why the GHB says that as the law says the money used must belong to the Thai only and if asking for a loan it would appear the Thai does not have the money required and marriage income would be required to pay the mortgage and thus in violation of the law.

But why don't all banks interpret the law like that then? This is from the KTB website re home loans

Every bank is free to interpret the law any way they want. Heck, the government changes their interpretation of the law on a whim. Why would you expect people whose profits depend on interpreting a law in the most lenient manner to turn down potential revenue?

GHB, not having public shareholders, takes a different view on matters. It is not so difficult to understand.

If you REALLY want a loan from GHB, the solution is simple. Divorce your wife. Get her to qualify using only her income, and then remarry after the house has been transferred and registered. This was actually suggested to me but I was unwilling to go to that extreme. Technically, even this falls afoul of their interpretation of the law, but even GHB admits they will not rescind a loan that has already been issued.

[cshort64]

This is a very interesting thread, I have many questions but I wish to raise just one for now. I went the the Krung Thai website via the link provided and it appears to have been updated:

•Thai nationality. (Foreigners cannot be borrower or co borrowers even though they have Thai work permit.)

This appears to indicate that even though I have a Thai wife am unable to get the mortgage with my wife, is this the same interpretation others have?

Thank You

CHS

[Soutpeel]

This is a very interesting thread, I have many questions but I wish to raise just one for now. I went the the Krung Thai website via the link provided and it appears to have been updated:

•Thai nationality. (Foreigners cannot be borrower or co borrowers even though they have Thai work permit.)

This appears to indicate that even though I have a Thai wife am unable to get the mortgage with my wife, is this the same interpretation others have?

Thank You

CHS

This ruling appears to come in for a while then disappear again to resurface again. Example, The GF at time, (now the wife) applied for a mortage with SCB and was granted a 100% mortage based purely on my income, I have a WP and was allowed to co-sign the loan, fast forward 6 months, a collegue tried the same thing at the same SCB branch, with the same bank manager and was told "the law" had changed and foreigners could no longer co-sign mortages for Thai nationals.

Suppose at the end of the day, its up to the individual banks to set their own policys, in line with their intepretation of the law at the time.

[Soutpeel]

HOwever if we want to pay out the loan in full within say 3 years, then the "fee" is still 140,000 THB

And your supprised at this, anything less than 3 years and the bank doesnt make any money...so its a penalty....same as a normal mortage, pay it off too early and it will cost you...Interest/fee all the same thing...

[dudemeister]

This is a very interesting thread, I have many questions but I wish to raise just one for now. I went the the Krung Thai website via the link provided and it appears to have been updated:

•Thai nationality. (Foreigners cannot be borrower or co borrowers even though they have Thai work permit.)

This appears to indicate that even though I have a Thai wife am unable to get the mortgage with my wife, is this the same interpretation others have?

Thank You

CHS

This ruling appears to come in for a while then disappear again to resurface again. Example, The GF at time, (now the wife) applied for a mortage with SCB and was granted a 100% mortage based purely on my income, I have a WP and was allowed to co-sign the loan, fast forward 6 months, a collegue tried the same thing at the same SCB branch, with the same bank manager and was told "the law" had changed and foreigners could no longer co-sign mortages for Thai nationals.

Suppose at the end of the day, its up to the individual banks to set their own policys, in line with their intepretation of the law at the time.

Or perhaps, you opened up a can of worms?

[happyfish88]

I have been married 4 years with my Thai wife....last week we applied for a house loan in 5 different Thai banks....just to compare and choose the best offer.

All 5 Thai banks accepted to lend my wife money, but we choose Islam Bank, as they do not ask for interests. Not that there is no charges, we had to pay 140,000 THB as a fee over the period the loan is running. The loan has to be paid in full within 15 years. So I found that 140,000 THB in "interest" over 15 years is a very good offer! That is only 9,333 THB per year or 777 THB/month. Not too bad. HOwever if we want to pay out the loan in full within say 3 years, then the "fee" is still 140,000 THB

Can we take a loan from thai banks if our spouse and ourselves are not thai?

[Soutpeel]

Can we take a loan from thai banks if our spouse and ourselves are not thai?

I would say you have 2 chances...no chance and FA chance and most definitely if its a house, as how would you address the minor problem of land ownership.

[aurelius]

Some banks have a view on foreigners which is not co-borrower, but as guarantor. The difference is that a co-borrower has his/her name on the title deed, however a guarantor has no name on the title deed and no way of accessing the asset itself, however the guarantor is liable for all the payments or non-payments as the case may be, even including death of the borrower.

This is something to think seriously about - if you were guaranteeing, and the borrower died, but you (the foreigner) are not the beneficiary of the will or not able to hold the land/property - you would still be liable for the payments but could have no ability to own or control the asset.

The banks appear to tighten the lending policies for people borrowing under this scenario - may not be 70% of value etc.

[Soutpeel]

Some banks have a view on foreigners which is not co-borrower, but as guarantor. The difference is that a co-borrower has his/her name on the title deed, however a guarantor has no name on the title deed and no way of accessing the asset itself, however the guarantor is liable for all the payments or non-payments as the case may be, even including death of the borrower.

This is something to think seriously about - if you were guaranteeing, and the borrower died, but you (the foreigner) are not the beneficiary of the will or not able to hold the land/property - you would still be liable for the payments but could have no ability to own or control the asset.

The banks appear to tighten the lending policies for people borrowing under this scenario - may not be 70% of value etc.

Mrs Soutpeel, before she was Mrs Soutpeel, got a 100% loan with me as the guarantor and the process was pretty straight forward, 12 months payslips and WP from me, think the only fee we paid was THB 55,000 for something

[Neeranam]

"If you borrowed 200,000 baht, then 140,000 fee is EXPENSIVE."

Over a 15-year period, the 140K fee is reasonable. Too, if a farang has to borrow 200K THB, he shouldn't be in Thailand.

What a ridiculous thing to say. Please explain why you think this. What about 500k THB, which I want to borrow to buy a house?

Are you saying that only rich foreigners be allowed to live in Thailand?

I came to this country with little money and have stayed for nearly 20 years. I've had financial ups and downs. Now, I have a decent salary but over the last few years, with both my kids at private, bi-lingual schools and recent trips abroad, I'm skint.

I feel insulted that people like you say I shouldn't be here.