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[jlocke51432]

I'm working with Kasikorn Bank to get a loan for a 3 story townhouse (the kind you see all over the country) and the banker is doing a horrible job explaining the loan and I refuse to sign something I don't completely understand. I'm already approved. I know this specific loan may be different but can anyone shed some light on what this type of loan usually looks like? Mine would be 15 years and putting 15% down.

1. How do loans for a place like this typically work? Are they amortized the same way typical mortgage loans in the US are?

2. Are there prepay penalties? If I signed a loan today and suddenly received an inheritance tomorrow could I pay the principal and be done or do they lock you in for 15 years of interest? In other words, there would not be much point in paying extra on the monthly payment in that case.

3. There are 3 options to choose from where you can lock in a very low interest rate for one year with a low payment, slightly higher rate/payment for 2 years, slightly higher rate/payment for 3 years and then you pay MLR-1%. Which is more advantageous? I'd rather just have a fixed rate/payment for 15 years but 6 different banks say they don't offer it.

Edited May 15, 2013 by jlocke51432

[yourauntbob]

Hire someone who knows what they are talking about to translate for you. With a large amount of money it is well worth it.

1) Normally, the whole monetary system here is based off of the USA

2) Normally no, but they play the same tricks here as back in the States with having moeny go to interest first or insurance (on the loan) first unless you specify otherwise. Make sure you make it clear to them when making payments larger than the mininum that the extra goes to principle.

3) Depends on your view of where interest rates are going and how fast. We did the three year stagger and plan to refinance after the third year (later this year). Thailand doesnt offer fixed rates because banks precieve the interest rate risk to be too great. Back in 1997 during the crisis many banks got burned when interest and inflation spiked and the Baht fell through the floor. Without government subsidy its simply not worth it to them to take that type of chance for 15-30 years.

The main reason that fixed rates are offered in the USA is because goverenment has shown willing to step in and save them if need be (to big to fail), and has strongly extorted encouraged them to offer these types of loans.