Does This Make Any Sense?

[meme]

My husband is a Thai National living in Canada and making a good income (in Thai standards) which he can prove. He is returning to his home town (in the South) in January and wants to build a home on his land. His sister spoke to someone at our bank (Siam Commercial) and they said regardless if he owns the land and makes adequate money, because he does not reside in Thailand they can not give him the loan. Originally he was thinking of making us a home so was asking for 1,000,000 baht. However he has an appointment to speak with them over the phone on Sat and see if he would be eligible for 300,000 as that is all we would need to improve his May's house that is currently on the land, which is his main goal. We don't need a house there now as we don't live there. Anyway just want to know if this sounds right.

[JimSiam]

The banks seem very strange here about loans, you may want to try the Government Savings bank or Kasikorn Bank as you may get different answers, each bank has different rules and they seem to be applied at each branch differently as well.

I inquired about borrowing money to purchase land, but the banks will only loan money for a house, HSBC will only loan money for a house if its in Bangkok

[kennalder]

No, makes no sense at all to post anything with such dumb headline. Put something in there that tells everyone what your topic is. You probably cut your chances of a decent reply by 90%.

[meme]

No, makes no sense at all to post anything with such dumb headline. Put something in there that tells everyone what your topic is. You probably cut your chances of a decent reply by 90%.

Open your eyes. This is the title of my thread:

Does This Make Any Sense?

Bank will not give my (Thai) husband a loan to build a house

But thanks for your "dumb" response. Sorry you didn't have anything better to do with your time but make rude comments, don't worry I'm sure tomorrow will be a more productive day for you.

[meme]

The banks seem very strange here about loans, you may want to try the Government Savings bank or Kasikorn Bank as you may get different answers, each bank has different rules and they seem to be applied at each branch differently as well.

I inquired about borrowing money to purchase land, but the banks will only loan money for a house, HSBC will only loan money for a house if its in Bangkok

Thanks JS, we will look into asking other banks as well.

[Benjie]

What sort of ownership is the land? how much is the land worth? Will you be giving the land ownership papers as collateral for the loan?

I dont see what his income in Canada has to do with it, I'm assuming he isn't moving back to Thailand so is going to be hard to chase if he is delinquent in payment.

[meme]

What sort of ownership is the land? how much is the land worth? Will you be giving the land ownership papers as collateral for the loan?

I dont see what his income in Canada has to do with it, I'm assuming he isn't moving back to Thailand so is going to be hard to chase if he is delinquent in payment.

Yes, I am assuming the fact that if he is delinquent in payment they could not hunt him down, is their reservation. However the land (which we could use as collateral for the loan) is worth much more than the loan we are asking for. We are moving back to Thailand in a couple of years. His income is important because the bank said they could only loan the money if an individual was making X amount of baht per month. My husband is making 6 times this amount. However I think it just comes down to the fact that he is not physically in Thailand at the moment.

[Benjie]

If it's chanote land, they should be ok to lend up to at least half of it's value.

[samran]

Thai banks are extremely risk averse.

I was on an excellent salary in BKK (in USD terms) and the bank would only let me borrow 50% of the asking price -and we were only looking to borrow 5 million baht. My ability to service the debt (very comfortably) didn't come into their consideration. Only their vaulation of the property and their rules on what they were prepared to loan as a proportion of the valuation.

Just about all property in Thailand is illiquid and banks don't want to be stuck with a bad loan on their books. That your husband is resident in Canada just means they will find it hard to track him down on a delinquent loan (not that he will be that of course!).

We ended up buying a property in Australia instead.

[thelinguist]

No, makes no sense at all to post anything with such dumb headline. Put something in there that tells everyone what your topic is. You probably cut your chances of a decent reply by 90%.

Open your eyes. This is the title of my thread:

Does This Make Any Sense?

Bank will not give my (Thai) husband a loan to build a house

But thanks for your "dumb" response. Sorry you didn't have anything better to do with your time but make rude comments, don't worry I'm sure tomorrow will be a more productive day for you.

[gregb]

I could imagine several reasons why this is a completely realistic position from the bank.

First, mortgages are only supposed to be given if you are going to live in your home. Since your husband is currently residing overseas, what documents did you provide guaranteeing you would be returning and working and living over here? Did you show proof of a job once you left Canada and returned to Thailand? It is quite clear you can not make this house your primary residence and continue working in Canada at the same time. This is entirely different from a Thai living in Thailand who gets a mortgage on a second home but doesn't move. The bank officer has no way of knowing in this case whether it will be a primary residence or not. But it is quite obvious in your case that in your present state you don't qualify for a mortgage.

Seems as though there is a really simple solution to me. Simply move back to Thailand, rent for a few months, and then get a mortgage based on Thai income. I'm sure your husband will have no trouble qualifying under these circumstances. Do keep in mind the story though. There has to be some plausible storyline that the bank official can believe such that this will be your primary residence.

If this is not practical for you, did you try applying for a commercial loan? Those loans do not have the same restrictions as mortgages, and you may have better luck. These are generally only for 5 years though.

By the way, do not apply for a loan at Government Housing Bank. They will not loan to any Thai married to a foreigner unless the loan is for a condo. I have discussed this many times on other threads. They have determined that doing so is not allowed under the law, and nothing you can do will change their minds. Better just to avoid them altogether.

[Daveroc]

Banks will generally be looking at three factors. The security being offerred, the ability to repay and the Personal factor. If you are going forward with the discussion with your Bank I would suggest you have figures available to talk facts rather than generalities. Value of the land, value of the house you wish to build/repair, repayments being offerred and so on. Use information from your Banks website which will generally have calculators that you can input figures that will give you an idea of the repayments required and how this relates to your income.

Whilst adequate security may be available, it is a long drawn out process to take charge of the security here in Thailand in the event of deafault. as such the Banks will look at ability to repay and Personal factor with interest. You are going to need to provide strong evidence of your income. Verifying this in an overseas country is not easy. Authenticated Bank statements can assist. This may well add to your costs.

The last issue will be to convince the Bank as to how they can get hold of you in the event of default. A local relative of financial means guaranteeing the account in addition to the collateral could be a suggested appraoch

[meme]

Thanks for all your responses. Very helpful and much appreciated.

[emsfeld]

Does your husband have any relatives that live in Thailand and would qualify for a mortgage? If such a relative agreed to co-sign the mortgage, the banks would normally be very accommodating.

[aurelius]

Also for "international" mortgages there is a concern about the effects of currency changes. if you borrowed 300k in baht 6 months ago, and you were paying in USD then effectively your loan payments would be larger now than before - this can end up overwhelming a borrower if its a large loan, and then because the borrower is not personally subject to bankruptcy law etc, they just tend to walk away. The requirement to be local is mainly about ensuring personal accountability. However in Thailand, its also about being able to verify the accuracy of your income statements, the stability of the employer, the credit bureau record of the borrower, other debts, other reported assets - none of these are things that local banks are really able to verify in a foreign country. And few foreign countries will not extend loans beyond borders either. 300k - could you do an unsecured personal loan?