Bangkok Bank Offering Mortgages To Foreigners

[george]

HOUSING FINANCE: Bangkok Bank offering mortgages to foreigners

BANGKOK: -- Available only at bank’s Singapore branch, the facility is structured as a long-term leasing-loan contract with a 30-year limit

Mortgage loans for buying residential property in Thailand are available to foreigners at Bangkok Bank (BBL)’s Singapore branch. Expatriates in Thailand are now offered mortgage loans by Bangkok Bank, but they have to go to the Singapore branch and be prepared for some currency exchange. The bank finances leasehold landed property in Thailand for both detached houses and condominiums. But the loan contract is different from one for a normal mortgage offered by a commercial bank to local customers.

Bangkok Bank’s mortgage for expatriates is, in fact, a long-term leasing-loan contract with a maximum maturity of 30 years. The bank has to set this special condition because, according to Bank of Thailand regulations, Thai commercial banks are not allowed to grant loans directly to foreigners. Bangkok Bank’s Singapore branch offers mortgage loans to foreign customers in two currencies, the Singapore dollar and the US dollar. The bank will convert the Singapore dollar and the US dollar into baht to pay for the residential property to land-developers in Thailand. The quantum available is up to 70 per cent of the lease price. The bank provides a maximum loan amount of S$1 million or an equivalent amount and a minimum of S$100,000. The bank stipulates an interest rate charged at prime lending rate, which stands at 6 per cent currently for loans in the Singapore dollar, while customers dealing in the US dollar are charged at US prime rate, currently also 6 per cent, plus 0.5 per cent a year.

The bank takes a loan-processing fee of S$5,000 or an equivalent amount, payable upon acceptance of the bank’s offer, and S$2,000 is refunded once a customer takes the loan. All allied expenses, ie legal costs, asset-appraisal fees and fire-insurance premiums, are the borrower’s responsibility. Loan repayment, of principal as well as interest, is scheduled by monthly instalments and commences one month from the date of disbursement. The bank allows borrowers to pay back ahead of maturity, but they are then subjected to a payment of 1.5 per cent flat on the loan.

Customers can draw the loans only upon payment of the difference between the lease price and the loan amount, subject to completion of loan documents and fulfilment of all conditions. According to the bank, applicants have to submit the following documents:

1) Copy of identification card or passport ;

2) Last two years’ income-tax returns;

3) Last two years’ balance sheet and profit-and-loss statement for self-employed borrower;

4) Lease agreement;

5) Employer’s letter addressed to Bangkok Bank (Singapore) confirming position, years of service and remuneration;

6) Bank’s letter of reference addressed to Bangkok Bank (Singapore), confirming banking relationship, conduct or type of account and size of loan or deposit with the bank;

7) Last six months’ bank statements.

Kasikornbank’s Los Angeles branch services mortgage loans in baht to Thais living in the US. The documents required are an identity card and a census record. An applicant must have a proxy borrower who lives in Thailand.

The loan approval procedure at the LA branch is similar to the one at the bank’s headquarters in Thailand. Borrowers are required to deposit cash as a monthly instalment in their deposit accounts in Thailand. The bank recommends borrowers transfer this to Thai deposit accounts once every two or three months in order to save on transfer fees.

In deference to the central bank’s regulation that prohibits direct loans to foreigners in Thailand, Kasikornbank offers loans to expatriates’ Thai wives. The bank requires a financial statement from the husband, and borrowers must show their marriage licences.

--The Nation 2005-07-11

[Jai Dee]

In deference to the central bank’s regulation that prohibits direct loans to foreigners in Thailand, Kasikornbank offers loans to expatriates’ Thai wives. The bank requires a financial statement from the husband, and borrowers must show their marriage licences.

Hmmm... this might be worth a little more investigation...

Has anyone got any more details?

[johnh101]

We had a thread on this a couple of weeks ago, it was well covered in that.

[george]

Update;

bANGKOK Bank launches mortgages for foreigners

PHUKET: -- Bangkok Bank has broken ranks with the Thai banking establishment to become the first Thai bank to offer mortgages targeted firmly at foreigners wanting to buy property in Thailand.

The mortgages are fairly limited in scope – they can be applied only to condos; the buyer must come up with the first 50% of the purchase price; and the mortgage term is only 10 years – but they are being hailed as a breakthrough by property developers and real estate agents.

The inability of foreigners to get mortgages to cover home purchases in Thailand has put developers and real estate agents at a disadvantage when compared with other tropical destinations where mortgages are available.

The loans, launched quietly over the past couple of months, are available through Bangkok Bank’s branches in Singapore and Hong Kong, and will normally be denominated in US, Hong Kong or Singapore dollars. Other curr encies may be considered – but not baht.

In Hong Kong, where branch General Manager Phaithul Tejasakulsin said the bank has made “one or two” loans, the amount that can be borrowed ranges from HK$1 million to HK$5 million (approximately 5 million to 25 million baht). Loans are made only to Hong Kong residents.

In Singapore the range is from S$100,000 to S$1 million (about 2.5 million to 25 million baht) The loans currently carry annual interest of around 7.5%.

In addition there are fees attached. In Hong Kong, for example, a processing fee of around 125,000 baht is payable when the borrower accepts the bank’s letter of offer. About 50,000 baht of this is refunded when the loan is drawn down. In addition, at the start, 1.5% of the loan amount must be handed over to the bank as a “prepayment fee”.

The Head of the Thai Desk at Bangkok Bank in Singapore, Yaovaluk Suksathit, said that the bank there had made more than 20 loa ns. The Singapore branch has been pushing the service more aggressively than Hong Kong.

For example, in Hong Kong mortgages are available only for buying freehold condominiums, whereas in Singapore loans will be considered for other types of property, including homes on leased land, said K. Yaovaluk.

“It all depends on the structure,” she explained. “We have done some.” The average mortgage to foreigners granted so far by Bangkok Bank in Singapore has been about US$200,000 (8 million baht), she told the Gazette.

The mortgages may be available later through other Bangkok Bank branches, said K. Phaithul – the London office, for example. “I think [the bank] will probably look at it,” he said. Hong Kong, Singapore and Britain are regarded as the three major markets for Phuket home buyers.

K. Yaovaluk said that she and her team had visited Phuket and Koh Samui over the past couple of months to talk with property devel opers. This was apparently news, however, to the President of the Phuket Real Estate Club, Phummisak Hongsyok.

He welcomed the scheme, however, praising the management of Bangkok Bank for having “good vision and professionalism”, and for a move that will benefit Thailand and the Phuket property sector in particular.

“Thai banks have never loaned money to foreigners to buy property because it was difficult to secure the loans when a foreigner could not own land in Thailand,” he told the Gazette.

“There are many expatriates in Hong Kong who are interested in buying a home in Phuket because the cost of property and land here is cheaper than in Hong Kong,” K. Phummisak noted.

“Bangkok Bank has good vision and has increased the opportunities for people interested in having a house in Thailand.”

--Phuket Gazette 2005-08-26

[thaigene2]

These two news reports seem at odds with each other George.

Anyone heard anything more on these mortgages/loans?

Not crazy about the lease idea..want flat purchase, condo if absolutely necessary.

Their Website doesn't say anything about lease. Tried sending them a message, but no response..what a surprise..

Thaigene.