Buying a Condo, loans what to be aware of ?

[Nakonamath]

Hi,

1½ year ago we signed, paid 20% deposit for a condo, it was to be finish around now, mid 2013.

At the time we signed my wife had a shop, which gave her a all clear to get the finance.

With out thinking about it, she closed the shop, due to work efford/income reasons.

But, because she closed the shop, and she now only do online business, sell from website, and keep the goods at home, the bank say she dont have a "solid" business, even though her income is 5x higher now.

long story short, we have got some declines and some accepts from different banks now.

But what are we to be aware of ? the loan types expenses and construction of the loans, is not as i have experience with from my home country.

1 bank offered us 100% loan on MLR 7.6% what is MLR ? minimum loan rate ? what does it mean ?

if i calculate 1 mio baht, 7,6% 30Y, we will pay back 2.5 mio is that correct understood ? if so, that seems abit high.

Any suggestions here ?

Jack

[CWMcMurray]

Normally banks in Thailand will not give a long terms fixed mortgage rate

They may give a special promo rate that is a flat % rate for the first few years

After that the rate is normally MLR ( - )a certain amount...

The MLR will then fluctuate depending upon current interest rates in Thailand

You can find example from Bangkok Bank website below

http://www.bangkokbank.com/BangkokBank/PersonalBanking/DailyBanking/Loans/BualuangHomeLoan/Pages/HighIncome.aspx

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[Nakonamath]

ok got it,but, the link for bangkok bank have 1 trillion different options.

[CWMcMurray]

Yes there are normally multiple options and you chose which you want...

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[yoshiwara]

Banks from which one is applying for a loan like to see a history of income. Remember if they are expecting repayment over say a period of 20 years they want to assess the risk of you keeping up those payments. Of course if your wife had closed the business the day after the purchase is completed, then nothing they could do about it as long as the payments kept up. On your current profile there is a possibility that a bank agreeing to advance you a loan will want a higher rate than previously anticipated. So yes, closing the business has unfortunately turned out to be not good timing.

[CWMcMurray]

If Loan is at MLR of 7.6 rather than MLR - (some %) ... Then yes it is a little high, but not too much... Maybe 1-1.5% higher than maybe possible if getting a 'good deal' through other bank

Although if you have already put 20% down.. Would take it and run, rather than risk loosing the 20%.

Also in most mortgages, you can pay principle off early to reduce interest costs and can also apply for refinance of mortgage through existing bank or other bank after a set time (usually 3 years)

You can also refer to link below for current MLR of other banks in Thailand below

http://www.efinancethai.com/otherfin/loan.aspx

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[Naam]

if i calculate 1 mio baht, 7,6% 30Y, we will pay back 2.5 mio is that correct understood ? if so, that seems abit high.

it is correct. based on the standard redemption of a 30Y mortgage and interest rate not changing you would pay Baht 1,541,960 interest and Baht 1,000,000 redemption.

what i find quite high is the interest rate of 7.6% p.a.

[Nakonamath]

if i calculate 1 mio baht, 7,6% 30Y, we will pay back 2.5 mio is that correct understood ? if so, that seems abit high.

it is correct. based on the standard redemption of a 30Y mortgage and interest rate not changing you would pay Baht 1,541,960 interest and Baht 1,000,000 redemption.

what i find quite high is the interest rate of 7.6% p.a.

Yes agree but if you look at bangkok bank it is 7.0