2 Years to get credit for a Mortgage?

[shiroboi]

My wife and I have a business that we incorporated officially in Thailand in October of 2013. Recently, our business has really done well and we're looking to make a larger house purchase this October. We recently checked out an 11 MB house and the property company said that to qualify through them we had to show business statements for 2 years. We were under the impression that we had to show a year of statements. Is this normal for houses in this price range? We're planning on putting down a 25-30% deposit with an average monthly income 150-400K baht. I'd love to hear from some others who have bought more expensive homes. What was your experience?

Note: Everything would be in my Thai Wife's name. Ownership isn't a problem.

[worgeordie]

Maybe you should concentrate on the business,which you have only

been running for less than a year,do you not feel its a bit too soon to

be taking on debit ,no matter how well your business is doing at the

"moment", ,things in Thailand are not stable at the moment,and things

could change dramatically,not the time to be investing more money or

getting into debit, but thats just my view.

regards Worgeordie

[JimMagee]

Agreed, unless you have another source of income, you should allow the business to season another year. I'm sure that the mortgage company is proceeding with the same risk reduction. In the US, depending on the business, you may have to show more than 2 years of Financials for a self employment situation, along with a statement of assets.

[technologybytes]

Requirements will vary from lender to lender, so there is no "normal".

You mentioned that the property company asked for the statements, I'd assume that the property company is not the lender (I may be wrong), they may have experienced the lender ask for more statements in the past and now just want to have all the paperwork in advance.

Actually, they probably just want to see proof of income for 2 years, you did have an income 2 years ago right ?

I know you didn't ask for financial advice, but Worgeordie is correct.. if the business is going to be successful then waiting another year or so won't hurt. 1 Year is not a good enough track record really to be getting into major debt, and unnecessary debt at that. However, I guess you know that.

I know from personal experience that income can drop when you run a business, and if it does (I sincerely hope it does not happen to you) they you would be very glad you don't have debts.

Edited March 30, 2014 by technologybytes

[bobthomas]

With 30-40% down you should not have a problem- but do you really want to pay MLR + 3% for the next 2 or 3 decades?

or worse yet- you could sign up for a floating rate

at an 11 M Baht purchase price- you would be better of renting and then buy some land and build your own house.

or buy a condo or cheaper house to live in while your house is being built.

b

[kuifje]

Be smart first. Concentrate on your business for a few years. Business can be good today, but what about tomorrow ?! I think almost every financial institution will want to see records for at least 2-5 years if you are self employed. (and if you want to borrow 8 million or so) Rent a house, and if you want a really nice house, pay 20-30k or so if your income is indeed + 150 k. Or even better buy a smaller standard house for a few million (and maybe pay cash) Later you can use this house as guarantee or you can sell it. Save some more money, let your business stabilise, and then maybe invest in a luxery house. See that you have a least 50% downpayment, and try to pay off your debt in maximum 10-15 years.

[realenglish1]

Your looking for problems The house can only be in your wife's name unless you are putting it in your cooperation You cannot own a house here in Thailand That is the law Keep in mind if your marriage goes south your wife gets the house Plan and simple

[SGD]

Lending criteria are a minimum of 1 years accounts but in reality, 2 or 3 years is required.

[Neilcnx]

As a former owner of a mortgage brokerage, I can say with some authority that lender's need to protect themselves from "flash-in-the-pan" successes. It's reasonable to want to see a track record. Why not wait and see if your company is for real for another year or so. If you really feel compelled to engage in conspicuous consumption, buy a Mercedes or a Porche and suffer in your existing house for a while.

[mok199]

i just bought a high end condo 7 years old,i had 30% down and i had the thai owner finance me at a good rate over 5 years,yes i have big payments,but i have a great pension ...we went to a lawyer set up a contract and the lawyer keeps the title until the last payment....the owner was reluctant at first ,but we do it all the time back home we call it''carrying the mortgage''.....but in this case the condo was clear and free,so the owner and i set up the terms and the rate.....in this scenerio the owner would keep the condo and the down payment and all your principle in the condo if you are 3 or more payments behind,....owners are willing to talk esp in this flodded market....

[BB1955]

Try SCB bank you will probably not have to jump through as many hoops ....

[Neeranam]

Lending criteria are a minimum of 1 years accounts but in reality, 2 or 3 years is required.

WE only had to show 6 months.

[trogers]

Lending criteria are a minimum of 1 years accounts but in reality, 2 or 3 years is required.

WE only had to show 6 months.

Mortgage lending is also subjected to the euphoria of bubbles...

Remember those sub-prime loans and the subsequent busts?

[shiroboi]

Thanks for all the advice. The general consensus is to wait another year to make sure the business is doing well. That's probably sound advice. I did incorporate a year prior so I have been in business for 2 years but just not in Thailand. The industry I'm in is experiencing explosive growth but i don't know how long it will last. My hope was to put down a very large down payment while the going was good.

Right now, we're staying with the in-laws. Sometimes I go crazy because of the lack of privacy but the built in baby sitting, cooking and laundry plus no rent is very, very hard to beat. I guess I'll just need to gather up my patience and wait it out some more.

I know people are all for renting here. My marriage is solid and I'm not worried about putting things in my wife's name. I'm 36 and I'd really like to work my ass off and buy a house in the next year or so that we can comfortably stay in indefinitely. I want my kids to have a good environment to grow up in. A condo or cheap rental doesn't fit that bill.

[casualbiker]

Thanks for all the advice. The general consensus is to wait another year to make sure the business is doing well. That's probably sound advice. I did incorporate a year prior so I have been in business for 2 years but just not in Thailand. The industry I'm in is experiencing explosive growth but i don't know how long it will last. My hope was to put down a very large down payment while the going was good.

Right now, we're staying with the in-laws. Sometimes I go crazy because of the lack of privacy but the built in baby sitting, cooking and laundry plus no rent is very, very hard to beat. I guess I'll just need to gather up my patience and wait it out some more.

I know people are all for renting here. My marriage is solid and I'm not worried about putting things in my wife's name. I'm 36 and I'd really like to work my ass off and buy a house in the next year or so that we can comfortably stay in indefinitely. I want my kids to have a good environment to grow up in. A condo or cheap rental doesn't fit that bill.

What do you consider "cheap" rental. Depending where you are you can rent a decent 3-4 million baht house from 10k baht a month!

Have a look at DDproperty.com or TV classifieds.

Sent from my XT1032 using Thaivisa Connect Thailand mobile app

Edited April 1, 2014 by casualbiker

[shiroboi]

I know this sounds really stupid, but my wife knows my taste in decorating and knows I like to have a full plan when I buy furniture. We'd have to dump a lot into furniture and AC units on a rental. Every time we go to rent something, we do the numbers and realized that we're probably better off just staying with the inlaws until we're serious enough to buy a house. I want to have my own place but there's too many benefits to staying with the in-laws right now. My littlest one isn't school age yet so it's pretty awesome being able to leave him home with the mother-in-law.