Income vs mortgage amount.

[Guitar God]

For Thais, what's the rule of thumb here on how much a bank will lend vs income? What income do banks consider, only their pay slip , investment income, other regular deposits to their account from sidelines, online income etc?

Edited July 1, 2014 by Guitar God

[Suradit69]

For Thais, what's the rule of thumb here on how much a bank will lend vs income?

Since no one else has answered ... based on a single case that I know something of in Pattaya, but not going into too much detail, there isn't a rule of thumb or set criteria.

A friend bought a small house east of Sukhumvit and was able to "negotiate" a 20 year mortgage with a loan officer at a local branch of one of the major Thai banks.

He didn't have a long, steady employment history. His salary seems to me to be pretty minimal compared to the monthly payments and his other living expenses. His sister-in-law, who is a business woman of moderate means, signed on as a guarantor, but later he separated from his wife (they were never officially married, so she apparently had no legal claim on his property),and the sister-in-law pulled out of guaranteeing the loan.

Good luck in spotting a rule-of-thumb in there and there's a reason I put the word "negotiate" in quotes above.

Assuming you are a farang friend of a Thai thinking of getting a mortgage, I would recommend that you let the Thai and his/her family "negotiate" with a banker without you being present and, if you are asked to sign on as a guarantor, that you decline.

In this case, I was asked to come along to see the banker when the loan was applied for and later I was asked to guarantee the loan. I said a very firm NO to both offers.

[glegolo]

Wrong thinking by you. In Thailand the banks are NOT looking so much on income as to what it is that you will put in as gurantee.. How valueable your house is, your land or other stuff... The banks here in isaan is probably the biggest car-.owners and the biggest land-owners no doubt.....

Glegolo

[PattayaPhom]

As above, property value and gaurantee seem to be the indicators along with the relationship the borrower has with their bank....banks tend to check tax payments to confirm provided salray details are correct but how else would someone on 20K a month borrow 4 Mil

[Crossy]

Agree with the above sentiments, when we built our place Siam Commercial gave us a Construction Loan (with staged draw-down as construction proceeded) based upon 50% of the guesstimated value of the completed house.

Converted to a 15 year mortgage once complete.

Three million borrowed against Wifey's salary of 50k with me as guarantor, piles of paperwork required from me.

[paulchiangmai]

Eight years ago my now wife borrowed 800,000 baht from a well known bank to buy a new house for 1.230 million baht, I put up the other 430,000 baht, she was not working but the sales lady told her to tell the mortgage lenders that she worked for a pest control company earning 6,000 baht a month. No guarantor was required, no checks were made. Payments for the first year were 3,800 baht a month, the second year 4,800 baht a month and then subsequent years 5,800 baht a month. We are well on the way to repaying the bank with payments of 10,000 baht 13 times a year, interest now is well under 2,000 baht a month. On the figures given to the bank I do not know how they expected her to live on 200 baht a month come the third year. I might just add that the bank cannot handle me paying 13 times a year, one month of the year we pay no interest and the following month we pay double the interest.

[Guitar God]

What was the value of the house and land the bank financed 3 million of ? Did she already own the land?

[belg]

50% of your income, that is what the bank allowed my wife to take

[Guitar God]

Belg- The bank added 50% of your income to your wife's income to determine household income and used that amount to determine maximum monthly payment and loan amount?

[Zumteufel]

Most of the banks have income vs. mortgage calculators online.

[JacChang]

LOL

Banks have a ratio, the average is 0.7 to 0.8 I believe. This will be fixed by the central bank as the cap. Of course, the higher your credibility, the closer you are to the 0.7 to 0.8. If you got debts and stuff, expect lower.

If you use your own land, which is like in the middle of nowhere, the benefits to you will be less. The ratio will be lower, the interest will be higher, etc.

Banks prefer if you use the new land/apartment, ratio higher, interest will be more in your favor, etc.

The reason is, your own land in the middle of nowhere, is harder to process if you default on your loans. Whereas, the new land/apartment is very attractive and hot on the market. I believe, any property over I forgot 10 or 20, I think it's 20 years, would not even be considered. As in the housing. Lands don't get old do they, hope not

Your income is only to judge if you are able to pay back the loan, and if it would be over your limit to meet demands. It's just their risk check. If your income is 50,000 and monthly loan payment is 25,000, you have a better risk profile. If you make 30,000 and pay 25,000 for loans, you are a high risk profile. With a better risk profile, you enjoy better preferential interest rates, and your ratio will go up as well. Yes, the poor gets poorer, the rich gets richer.

So to find out the amount you could get, depends on your property value, which could be your current home, or the new one you are going to buy. If the interest rate is 7-9%, by having better credentials, you will move closer to 7%. And in general you can get loans of up to 0.7-0.9 of your property value. This value is not stated by you or the developers. It is stated ONLY by the bank's own appraisal team. Which... will never be as high as you think your property is.

[AnotherOneAmerican]

25k/pcm gets you a 1.5M loan from SCB or a 1M loan from BKB.

Neither bank checked tax records, just pay slips, bank deposits and phone call + letter from employer.

(employer existed, but employment didn't, source of deposits not checked)

Edited July 2, 2014 by AnotherOneAmerican

[Guitar God]

Would a bank lend 2.5 m in this situation do you think?

Land in prime location, 200 talang wa worth 1 M฿ owned outright. New construction, house worth 5M฿, 50% downpayment.

Thai government employee with income of 20k pm from work, 35k "allowance" from husband for the past few months, farang husband income over 200k pm. Thai wife has good credit, only other loan is 700k car loan with 14k pm payment.

Pardon any errors, I just had surgery to repair compound fractures sustained in an accident and am getting 10ml morphine every 4 hours.

[AnotherOneAmerican]

I would say not with the car loan, but yes without the car loan.

When taking out my loan (1.5M on 25k income) I was specifically warned by the bank, not to take out any other loan until the home loan and property purchase was completed.

I suspect, in your case, it would depend how easy it would be for the bank to secure repayments from your income, if the marriage were to fail.

If your income was from outside Thailand, they wouldn't have a hope in hell, so would refuse.

As a government employee, home loans are much more lax than for other Thais, but with 14k already used from her wage, only 6k/pcm left, so about 1M maximum loan.

[Guitar God]

I'm seeing a wide range of info, 50k pm will get you 3m, 25k will get you 1m, 50% of wife (or is it husband's ) income is the max monthly payment. Farang husband's income counts, or doesn't count.

She went to the bank a few months ago and won't go back again until the house is close enough to completion. Back then, with no car loan, they said yes to 2m mortgage based on 15 k pm income. Now the situation is 14k pm going out in car payment and an additional 35 k pm going into her bank account.

I'm wondering if the bank will consider the extra 35k pm since it's not salary.

Should things go tits up and she defaults, the bank ends up with a 6m house for 2 or 2.5 m. Seems like enough security for the bank to me.

[lcp0761]

As above, property value and gaurantee seem to be the indicators along with the relationship the borrower has with their bank....banks tend to check tax payments to confirm provided salray details are correct but how else would someone on 20K a month borrow 4 Mil

General Question --- will a Thai Bank give a farang a house/condo loan (say 30-40% of the residence purchase price - $2-3M Baht)? As I have a Thai wife but her annual US income is equivalent to my monthly income.

[bkk_mike]

I would say not with the car loan, but yes without the car loan.

When taking out my loan (1.5M on 25k income) I was specifically warned by the bank, not to take out any other loan until the home loan and property purchase was completed.

I suspect, in your case, it would depend how easy it would be for the bank to secure repayments from your income, if the marriage were to fail.

If your income was from outside Thailand, they wouldn't have a hope in hell, so would refuse.

As a government employee, home loans are much more lax than for other Thais, but with 14k already used from her wage, only 6k/pcm left, so about 1M maximum loan.

Actually my wife got a mortgage with me as guarantor for an investment property, solely based on my out-of-country income as she has no income.

Because of the FX risk, they used 85% of my income in the calculations for the amount that can be borrowed where if I worked in Thailand it would have been 100% of my income that would have fed into the calculations. Also, they needed paperwork from the HR department confirming my income, not merely my payslips, etc.

One caveat: I work for a BIG company - over 100,000 employees worldwide... - I'm not sure they'll be as flexible if you're working for some small company with 20 employees that they've never heard of.

Edited July 6, 2014 by bkk_mike