I have a question regarding getting a loan to buy a Condo

[Lammbock]

Hello,

I try to make this understandable as English is not my native language.

Maybe some personal information first.

Me of young age Foreigner, second year in work permit. Director of my own Thai Company. 100,000 USD (3.2 Million Baht) savings going to marry this year my lovely Thai GF.

The question.

If we want to buy a condo later this year which cost lets say 10 Million or 15 Million Baht is it possible to get the remaining as a loan from a Thai Bank and pay them back every month 40,000 Baht for the next 10 years + ?

Thank you.

Lammbock

[hhgz]

There are financial institutions that will provide a loan and, since you have some time before you intend to buy, it's a good time to start looking.

[setbkk]

Lammbock -

Lots of questions need to be answered before anyone can give you good advice.

First off, think like the lending officer at the bank. What information would he want to feel comfortable giving you money to buy your condo? Conversely, if you were the bank, what would you need to know to give money to a stranger?

My specific questions:

1) You want to buy a 10 to 15 million baht condo. How much down payment are you going to provide? From the bank's perspective, the more the better as their loan is more secure. If they have to repossess and resell the condo, they want to come out ahead.

2) Is the $100,000 USD dowry to marry your lovely Thai GF or will it be applied towards downpayment of condo? If dowry, then that money has gone down a rat hole from the bank's viewpoint.

3) You state second year of work permit of your Thai company. What are the annual profits from that company? Bank will look at your profits and then deduct your cost of living to determine how large a monthly payment you could safely afford. However, a two year track record is very short.

4) Recommend getting a financial calculator (hard to find in TH) or a free loan amortization program off the internet so you can determine what size loan you could possibly get with your proposed payment. Talk to banks to find out their interest rates, loan term, points and other conditions.

Sorry, but I suspect you will have an very difficult, if not impossible time getting someone to lend to you. If you had major resources, would you lend to a stranger just like you with the same request? I doubt it.

[paz]

If I had 3.2M Bath I could buy, perhaps, a 3M B apartment in my own only name.

But perhaps even better buy nothing and look for a good deal renting.

[NCC1701A]

and made sure i had total accounting of all my assets in writing prior to getting married.

[koo wallety tourist]

you need to change to a different wife the one you propose is too expensive

[Soutpeel]

I believe the op means the 3.2 million is sin sot which is going to be returned to them after the wedding and he wants to know if using the 3.2 million as a down payment on a condo could be used to secure a mortgage on a 10-15 million condo seeing as he is working here, the simple answer would be over a 10 duration 40k/m repayment wouldn't cover 10-15 million loan one suspects he needs to be looking at a 6-8 million condo given the numbers stated

But could it be done in principle ? Yes

[dean008]

I shudder to think how much interest you will pay over the term of the mortgage.

Roughly and without compounding

If the rate was 4% on a 10mil loan then thats 400,000 baht a year interest, if you pay of 40k a month or 480,000 in a year then after 12 month you still owe 9,920,000

I would consider buying a smaller/cheaper condo, so you have no debts when you start your married life together, and no stress over servicing a substantial loan.

best of luck

[koo wallety tourist]

Director of my own Thai Company. 100,000 USD (3.2 Million Baht) savings going to marry this year my lovely

you guys must read as

Director of my own Thai Company. 100,000 USD (3.2 Million Baht) savings, going to marry this year my lovely

[Lammbock]

First off, think like the lending officer at the bank. What information would he want to feel comfortable giving you money to buy your condo? Conversely, if you were the bank, what would you need to know to give money to a stranger?

Good Point.

How much down payment are you going to provide?

That would be the 100k. Maybe I can manage to save up a little more.

You state second year of work permit of your Thai company. What are the annual profits from that company? Bank will look at your profits and then deduct your cost of living to determine how large a monthly payment you could safely afford. However, a two year track record is very short.

I don't want to give to much information about that here on ThaiVisa but I get your point. Thanks.

Sorry, but I suspect you will have an very difficult, if not impossible time getting someone to lend to you. If you had major resources, would you lend to a stranger just like you with the same request? I doubt it.

and what if we do it in the Name of my Thai Wife? Does it makes any difference? Will she get a loan more easier than me?

Thank you.

[wowfactor10]

Not sure for loans but if u ever intend to rent out such expensive unit then do expect a low rental return on it in comparison with for example a 5 million bht unit.Also the resale of these expensive units will take you for ever in Thailand.

The group of buyers that purchase 10-15 million BHT units is small and often these persons only buy new units.

[Lammbock]

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and made sure i had total accounting of all my assets in writing prior to getting married.

All my accounts in my name only. I don,t think they become available to my wife???

you need to change to a different wife the one you propose is too expensive

You don,t get it.

I believe the op means the 3.2 million is sin sot which is going to be returned to them after the wedding and he wants to know if using the 3.2 million as a down payment on a condo could be used to secure a mortgage on a 10-15 million condo seeing as he is working here, the simple answer would be over a 10 duration 40k/m repayment wouldn't cover 10-15 million loan one suspects he needs to be looking at a 6-8 million condo given the numbers stated

But could it be done in principle ? Yes

I shudder to think how much interest you will pay over the term of the mortgage.

Roughly and without compounding

If the rate was 4% on a 10mil loan then thats 400,000 baht a year interest, if you pay of 40k a month or 480,000 in a year then after 12 month you still owe 9,920,000

I would consider buying a smaller/cheaper condo, so you have no debts when you start your married life together, and no stress over servicing a substantial loan.

best of luck

Maybe you have misunderstand. The 3,2 Million (100k USD) are my savings. I want it to use for a down payment on a condo. It has nothing to do with the wedding.

Maybe Soutpeel and dean008 are right about getting a cheaper/smaller condo. Or wait a bit longer and save up more money.

But I guess we will give it a try and see what is possible.

[ToddinChonburi]

You will need 50% to 80% for your down payment ,that is just the reality here.

[Soutpeel]

I shudder to think how much interest you will pay over the term of the mortgage.

Roughly and without compounding

If the rate was 4% on a 10mil loan then thats 400,000 baht a year interest, if you pay of 40k a month or 480,000 in a year then after 12 month you still owe 9,920,000

I would consider buying a smaller/cheaper condo, so you have no debts when you start your married life together, and no stress over servicing a substantial loan.

best of luck

Average it out at around 7% that would be a closer interest rate

[Soutpeel]

You will need 50% to 80% for your down payment ,that is just the reality here.

Maybe not, I cosigned on a mortgage for Mrs S before she was Mrs S with SCB and she got 100% loan, with no down payment, the only cost involved was Thb 55k in admin costs

[deepcell]

Study the market in the area you lookig to buy this 15m condo, it is a way to much money, i think.. you nice house for 3m or 4m, I mean 3 bed. 2 bath. with furniture.. well, can you rent it out for a good value if things going bad, the value is enough to pay the 40k to the bank? look forward do not put all your eggs in one basket! lol.

[ozyjon]

Thailand is not your country and never will be.

RENT Is a better option.

[fletchsmile]

Firstly the banks are unlikely to lend to you. They may however lend to your partner guaranteed by you. Technically you dont have to be married but it strengthens your case if you are.

Secondly they will look at your ability to service the loan and be partcularly interested in your debt to income ratio for servicing the loan. I.e what % of your income will go to loan repayments.

As to how much you can borrow several banks have mortgage calculators on their websites to give you an idea of repayments. Stan Chart has one. It will give you an idea to help with some of the maths. eg paying 40k a month for 10 years is only 4.8mio and that's before interest. Added to your 3.2mio is not enough for your condo of 10mio. Realistically for a repayment of 40k per month you're looking more like ball park 25 to 30 years+ than 10 years + with 3mio deposit and 7mio borrowed.

10mio is also an interesting number for mortgages. Above 10mio banks are unlikely to lend more than 80%.I.e loan to value (LTV) will be capped at 80%. This is due to BOT regulations. For up to 9,999,999 baht it's possible to get 90%+. But add another baht and make 10 mio the LTV will drop to 80% due to BoT regulations on capital requirements for qualifying mortgages.

Based on the numbers youve given so far personally I'd be looking for something under 10mio with a higher LTV and not putting all your savings towards the deposit. You should keep some back for emergencies other expenses etc. Also gives you a cushion if you lose your income. Will also cost you to furnish the place too.

Cheers

Fletch

Edited February 16, 2015 by fletchsmile

[technologybytes]

The biggest problem you will have is that the banks will never actually say NO, they will keep asking for more papers and then they will keep saying they are waiting for a decision from someone. Nobody in Thailand likes to say NO.

Just a thought. I have sold a few properties in Thailand and on more then one occasion I have accepted stage payments. I have never charged interest though in both cases the period before final payment was within 3 years.

Many sellers are happy to accept stage payments over a period of time, the trouble is that even with a tight legal agreement you won't actually get the chanote title until the final payment is made and until then you are at some risk, so you would need to feel good about the seller.

[Asiantravel]

_{" and what if we do it in the Name of my Thai Wife? Does it makes any difference? Will she get a loan more easier than me?"}

dont do it. you will regret it

Edited February 16, 2015 by Asiantravel

[Lammbock]

We actually do not want to live in a house on the outskirts of Bangkok.

We want to purchase a 2 to 3 Bedroom condo in the CBD are of Bangkok City.

And we want to buy a ready to move in condo on a high floor with a nice view.

That's why the price is so high.

Maybe not 15 Million but 10 Million sure.

[Soutpeel]

We actually do not want to live in a house on the outskirts of Bangkok.

We want to purchase a 2 to 3 Bedroom condo in the CBD are of Bangkok City.

And we want to buy a ready to move in condo on a high floor with a nice view.

That's why the price is so high.

Maybe not 15 Million but 10 Million sure.

As a question how much of your disposable income as a percentage would buying a 10 million condo take up in payments ?

[Lammbock]

Sorry I don't understand this question.

[aTomsLife]

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We actually do not want to live in a house on the outskirts of Bangkok.
We want to purchase a 2 to 3 Bedroom condo in the CBD are of Bangkok City.
And we want to buy a ready to move in condo on a high floor with a nice view.
That's why the price is so high.
Maybe not 15 Million but 10 Million sure.

As a question how much of your disposable income as a percentage would buying a 10 million condo take up in payments ?

Sorry I don't understand this question.

If I net ฿100,000 a month, and my mortgage payment is ฿40,000, then 40% of my disposable income is going toward payments.

See, the rule of thumb is that one's mortgage shouldn't exceed 30% of one's disposable income (meaning the amount of money left over after income taxes are paid). I believe that is what SP is getting at.

[Soutpeel]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

We actually do not want to live in a house on the outskirts of Bangkok.

We want to purchase a 2 to 3 Bedroom condo in the CBD are of Bangkok City.

And we want to buy a ready to move in condo on a high floor with a nice view.

That's why the price is so high.

Maybe not 15 Million but 10 Million sure.

As a question how much of your disposable income as a percentage would buying a 10 million condo take up in payments ?

Sorry I don't understand this question.

If I net ฿100,000 a month, and my mortgage payment is ฿40,000, then 40% of my disposable income is going toward payments.

See, the rule of thumb is that one's mortgage shouldn't exceed 30% of one's disposable income (meaning the amount of money left over after income taxes are paid). I believe that is what SP is getting at.

Correct

[NickJ]

Math....I forgot that day

[SheungWan]

We actually do not want to live in a house on the outskirts of Bangkok.

We want to purchase a 2 to 3 Bedroom condo in the CBD are of Bangkok City.

And we want to buy a ready to move in condo on a high floor with a nice view.

That's why the price is so high.

Maybe not 15 Million but 10 Million sure.

What you want doesn't correlate right now with what you can afford.

And it is a want not a need. In real life there is a difference.

[Lammbock]

I make more than 100.000 Baht / month so paying back to the Bank 40.000 Baht / month should be no problem.

The question is if the Bank will give me a loan. About that I am not to sure since I am a Foreigner in Thailand and we all know what that means.

Edited February 17, 2015 by Lammbock

[Soutpeel]

I make more than 100.000 Baht / month so paying back to the Bank 40.000 Baht / month should be no problem.

The question is if the Bank will give me a loan. About that I am not to sure since I am a Foreigner in Thailand and we all know what that means.

How about we put it this way unless you have decent verifiable credit history in Thailand, the answer will most likely be no you will not get a loan on a condo in your own name from aThai bank, however there is nothing in the rules preventing you getting one

I have been offered a mortgage on a condo from SCB, up to the tune of around 12 million, but I have been on a WP for 14 years, hold credit cards with SCB, have financed a few cars in Thailand and guess most importantly I cosigned on a mortgage for a Thai national through SCB, its always been paid on time etc

In other words I have a pretty solid local credit score, all the above would get a mortgage on a condo, but due to the land owner ship laws there would be no way they would grant me a mortgage on a landed property in my own name

[fletchsmile]

Almost no chance you'll get a condo loan in your name. Various rules and policies will prevent it, eg

For a foreigner to buy a condo in their name, they need to show funds were remitted from overseas. A loan from a Thai bank is not overseas. Banks also prefer the name of the mortgagee and the name of the owner of the property to match. There are also rules around the purpose for which loans are extended to foreigners.

Best you can hope for is loan to your wife guaranteed by you, and the condo will likely be in her name. Indeed, the land registry will also want you to sign a piece of paper, as you're a foreigner saying that the wife bought the condo with her money.

At least both the asset and liability will be in your wife's name.

This is another reason why you don't want to put all your life's savings into a single asset. It's better to pay a smaller deposit and keep some of the money in your name. I have no objection to putting some assets in my wife's name. I wouldn't however, want to put all my assets in my wife's name and leave myself with nothing.

So for your THB 3mio you have, maybe use 1mio as a downpayment, combined with say 8mio loan to your wife guaranteed by you. That way you keep 2 mio in assets in your name. She has a condo in her name as an asset for 9mio and a liability of 8mio, for net assets of 1mio.

Cheers

Fletch