Guaranteeing Mortgage For A Thai

[QED]

After 8 years of renting here, I would like to have a property without the landlord hassles and restrictions on what I can or cannot do to the property. I could never live in a condo, but would like to buy a house with some land. This gives 2 options as I see it, first to set up a company to buy the house, 2nd to buy in my gf's name.

I am not comfortable with the company route as it is not strictly legal, and I would be worried that they would come to take the house away at any time. My latest thought was to buy in my gf's name, put down the minimum deposit (for obvious reasons), and finance the rest. This would be the same as paying rent to me, but she would own the house and we could do what we wanted with it. I am well aware of the potential pitfalls of this route, hence the reson for the minimal deposit, which would be nothing I could not afford, nor would care walking away from.

We spoke to a few banks that said no problem in terms of my work and salary, but we had to be married to go this route, which kind of put the Kybosh on it. We do plan to get married, but neither of us wants to do it as and means to an end, and plan to do it in a few years time when I can get most of my family over here.

She does work, but her salary is nowhere near enough to justify the loan we would need. One idea that was floated was to put some cashflow through her bank account for 6 months and claim it as self employed income, but that sounds like BS to me as they would want to see tax returns etc.

Before all you naysayers chip in with 'run for the hills', 'she's ripping you off' etc. etc., these were my ideas, nobody is ripping me off, and if I do lose a bit of money in the long run it would be insignificant, and I would be happy for her to have it. I would also put a lease on the property just for added security, although I would never enforce it, it would make her think her options were more limited.

So now I am kind of stuck, any other (sensible) suggestions?

[Naam]

So now I am kind of stuck, any other (sensible) suggestions?

get your house by whatever means and live (hopefully) happy ever after!

[PattayaPhom]

What part of Thailand are you living?

[fletchsmile]

I hear where you're coming from on this and the reasoning.

Where the banks say that you have to be married, for a condo at least, this is not a legal requirement, and there is nothing technically to stop them doing this by law. The reason they want it is internal policy. If you are legally married it demonstrates a closer relationship and legitimises the whole relationship, and adds weight to your likelihood of payment should the guarantee ever be called on - one factor of many about the quality of the guarantor.

Knowing there is nothing technically stopping them, except internal bank policy, this means you might want to try again at different banks and ask to see the manager or more senior people who might wave the policy. Also should you know someone who works in a bank personally that could recommend you help. I used to work in a bank in Thailand (not in sales or mortgages), and as a senior person was able to add weight and personally recommend. I helped a vey good friend get a mortgage on a condo in this situation, hence my familiarity with the rules of what can and can't be done legally. It was viewed as a personal referral, and as I'd known the guy for about 10 years and the girl and he a couple for 7 it added weight. Unfortunately, otherwise the banks struggle to differentiate one foreigner from another. Also helped he had a good salary, she a good job too. Also this was for a condo. Adding a landed house into the equation makes it more difficult as legally a foreigner cannot own land, and the two tend to get lumped together (land + house).

Other ways are if you are a private banking client of certain banks ($1mio up assets) lending from offshore in foreign currency. This is also usually for condos though, because of land complications again.

There are also companies here that operate certain schemes, mainly based on sort of hire purchase. Essentially they set up a company that owns the house. You make payments, and on the last one title can pass to you. If you default you have less protection than a normal mortgage, but it is a route. Hamptons Advance is one such company. The guys running it have been around in Thailand for quite a few years, and I know some of them. I don't know enough about their products to recommend them or otherwise but may be worth talking to. Normally they do condos for foreigners - don't know about houses. If you have a Thai spouse they may be able to do something in her name. Again you probably have less protection thn a normal mortgage should you default, but if you make your payments as you should, it may be an option

Otherwise, if you buy new from a developer they may consider finance to your other half guaranteed by you.

We also considered houses, but in reality as a foreigner married to a Thai, it was much easier to get financing on a condo in the wife's name with her having a mortgage guaranteed by me. Condos do have some advantages such as security, and less hassle in some things.

BTW If you bought a condo first, there's a good chance the bank would take that as collateral next time on a house in your wife's name, and if you make all the payments your wife demonstrates herself to be a good credit history. You've also built a relationship with the bank, and can use it to get priority banking status. These all count where rules and credit considerations are looked at.

Fletch

Edited March 14, 2013 by fletchsmile

[QED]

Thanks Fletch, some useful info there. I do have 2 condos owned outright in my name, but I don't want to use them as collateral as that really defeats the object of the financing. I have never lived in those condos, and honestly do not think I could ever live in any condo, I need my space and a nice garden.

She has a few rai of land that could be thrown into the pot as additional security, if they have the systems to cope with that kind of thing (ie. someone with discretion rather than a form filler).

I will look into some more options and update here.

[TommoPhysicist]

SCB will do joint salaries between married Thai (house owner) and foreigner (guarantor).

They don't accept other properties as collateral, nor do BKB. Don't know why, but they just weren't interested.

(We had two chanotes for land and buildings owned outright)

They do want to see regular monthly payments into both bank accounts.

They will want to see pay slips, bank books and will contact employers.

Neither bank checks tax returns, mainly because most Thais work 'cash in hand'

BKB offered 1m on a 2m property (not enough).

SCB are thinking about it at this moment.

The right developer can get you a home loan through a bank without you showing any job or paperwork ...... due to corruption of developer/bank employees. Was offered 2m loan through one of the big banks on a 2.2m property, no paperwork, developer sorts it out.

Edited March 14, 2013 by TommoPhysicist

[Rancid]

I hear where you're coming from on this and the reasoning.

Where the banks say that you have to be married, for a condo at least, this is not a legal requirement, and there is nothing technically to stop them doing this by law. The reason they want it is internal policy. If you are legally married it demonstrates a closer relationship and legitimises the whole relationship, and adds weight to your likelihood of payment should the guarantee ever be called on - one factor of many about the quality of the guarantor.

Knowing there is nothing technically stopping them, except internal bank policy, this means you might want to try again at different banks and ask to see the manager or more senior people who might wave the policy. Also should you know someone who works in a bank personally that could recommend you help. I used to work in a bank in Thailand (not in sales or mortgages), and as a senior person was able to add weight and personally recommend. I helped a vey good friend get a mortgage on a condo in this situation, hence my familiarity with the rules of what can and can't be done legally. It was viewed as a personal referral, and as I'd known the guy for about 10 years and the girl and he a couple for 7 it added weight. Unfortunately, otherwise the banks struggle to differentiate one foreigner from another. Also helped he had a good salary, she a good job too. Also this was for a condo. Adding a landed house into the equation makes it more difficult as legally a foreigner cannot own land, and the two tend to get lumped together (land + house).

Other ways are if you are a private banking client of certain banks ($1mio up assets) lending from offshore in foreign currency. This is also usually for condos though, because of land complications again.

There are also companies here that operate certain schemes, mainly based on sort of hire purchase. Essentially they set up a company that owns the house. You make payments, and on the last one title can pass to you. If you default you have less protection than a normal mortgage, but it is a route. Hamptons Advance is one such company. The guys running it have been around in Thailand for quite a few years, and I know some of them. I don't know enough about their products to recommend them or otherwise but may be worth talking to. Normally they do condos for foreigners - don't know about houses. If you have a Thai spouse they may be able to do something in her name. Again you probably have less protection thn a normal mortgage should you default, but if you make your payments as you should, it may be an option

Otherwise, if you buy new from a developer they may consider finance to your other half guaranteed by you.

We also considered houses, but in reality as a foreigner married to a Thai, it was much easier to get financing on a condo in the wife's name with her having a mortgage guaranteed by me. Condos do have some advantages such as security, and less hassle in some things.

BTW If you bought a condo first, there's a good chance the bank would take that as collateral next time on a house in your wife's name, and if you make all the payments your wife demonstrates herself to be a good credit history. You've also built a relationship with the bank, and can use it to get priority banking status. These all count where rules and credit considerations are looked at.

Fletch

Condos are fine for couples but when the patter of little feet comes along, not so. Another poster made the point about housing estates, have a chat and let them pressure the bank, they want the sale.