Loan Information for Buying/Refinancing

[umbanda]

I think this info may be useful to some.

After shopping around for a loan in Chiang Rai, I found out that most banks have similar programs. Service and knowledge is the difference, even between same banks offices. My best experience was with Bangkok Bank and direct with the Manager. Professional service, and less documentation need it. Its said also that the bank's main office in BK is approving loans very fast now, in about 2 weeks, and it is making it an easier as possible.

Most said that farang cannot co-sign or buy...but... I also found out that may be many exceptions, depending in age, visa extension type, work, and the amount/porpoise. Credit history/assets, makes a difference too.

For a 1.000.000 loan, 10 years term. 3,75% interest first year..6% interest afterwards

Monthly payment first year = 9500 THB

Monthly payment after = 12200 THB

The monthly payment includes the 1000000 life insurance (about 2500 THB) and House Insurance.

Applicants paid appraisal = 1700 to 2500 THB.

My experience...

Many...too many bank's employees, do not have any idea about their work, and may give wrong information and answers.

Keep asking in other offices....or ask to speak with a senior manager or supervisor.

Edited February 16, 2015 by umbanda

[Dirk_brijs]

what did you up in as collateral to get the 1mil baht loan?

I have been looking around for a mortgage on our house (name of the wife) and all they are interested in are silly payslips?

So they rather borrow 500K to someone who has a silly 10K job in KFC (and most liely loose or quit that job withing the next year) than to someone who ownes a 3Mil baht valued home?

I dont see how that would work?

[Soutpeel]

what did you up in as collateral to get the 1mil baht loan?

I have been looking around for a mortgage on our house (name of the wife) and all they are interested in are silly payslips?

So they rather borrow 500K to someone who has a silly 10K job in KFC (and most liely loose or quit that job withing the next year) than to someone who ownes a 3Mil baht valued home?

I dont see how that would work?

Oh that sense of entitlement again, what an absolutely vulgar post

the fact is the banks are less interested in a 3.0 million valued home simply because if that person defaults and the bank takes the house, they are now stuck with a house they have to off load which costs them money and hassle not with standing the fact there are hundreds of foreclosed properties the banks own that they can't get rid of in other words they may get nothing back and in fact its costing them money keeping a crappy asset on the books

At least with some with a crappy Thb 10 k m job they have some chance of getting cash off the person

Not hard to understand the economics of it, if one has the semblance of education beyond primary school

[umbanda]

what did you up in as collateral to get the 1mil baht loan?

I have been looking around for a mortgage on our house (name of the wife) and all they are interested in are silly payslips?

So they rather borrow 500K to someone who has a silly 10K job in KFC (and most liely loose or quit that job withing the next year) than to someone who ownes a 3Mil baht valued home?

I dont see how that would work?

Oh that sense of entitlement again, what an absolutely vulgar post

the fact is the banks are less interested in a 3.0 million valued home simply because if that person defaults and the bank takes the house, they are now stuck with a house they have to off load which costs them money and hassle not with standing the fact there are hundreds of foreclosed properties the banks own that they can't get rid of in other words they may get nothing back and in fact its costing them money keeping a crappy asset on the books

At least with some with a crappy Thb 10 k m job they have some chance of getting cash off the person

Not hard to understand the economics of it, if one has the semblance of education beyond primary school

Sorry Soutpeel, but Dirk is right, and you are the one that do not understand economics.

If the house value by an appraisal is 3 mil and the loan is 500K, that's is a 17% LTV (loan to value) and in most countries the loan will be approved, In some up to 30% LTV without ANY requirements like in the USA, and even for foreigners.. If the borrower default and the bank get the house, will be not problem for the bank to sell the house for at least 500K and get its money back.

Sometimes credit history may be the problem without proof of income. In the USA a millionaire with TAX and/or Child support liens cannot get any kind of loan. I do not know if my education was good in primary school in South America. I know English classes were bad, but I think I compensated that with 17 years of work in the US lending market.

Edited February 16, 2015 by umbanda

[Soutpeel]

And if they can't or won't sell it at 500k ? The point bring most banks don't the hassle of an asset they can't off load, the house is only worth 3 million if some is prepared to pay 3 million for it, if someone is not prepared to pay anything for it its worth nothing

Your 17% is worth nothing if the property can't be sold

Go and take a look at what's on the repo market from Thai banks that can't be sold and you will understand what I am getting at

And references to the US mortgage scams are not a good example to draw on considering what happened in the US a few years ago

Edited February 16, 2015 by Soutpeel

[umbanda]

And if they can't or won't sell it at 500k ? The point bring most banks don't the hassle of an asset they can't off load, the house is only worth 3 million if some is prepared to pay 3 million for it, if someone is not prepared to pay anything for it its worth nothing

Your 17% is worth nothing if the property can't be sold

Go and take a look at what's on the repo market from Thai banks that can't be sold and you will understand what I am getting at

And references to the US mortgage scams are not a good example to draw on considering what happened in the US a few years ago

[Soutpeel]

And if they can't or won't sell it at 500k ? The point bring most banks don't the hassle of an asset they can't off load, the house is only worth 3 million if some is prepared to pay 3 million for it, if someone is not prepared to pay anything for it its worth nothing

Your 17% is worth nothing if the property can't be sold

Go and take a look at what's on the repo market from Thai banks that can't be sold and you will understand what I am getting at

And references to the US mortgage scams are not a good example to draw on considering what happened in the US a few years ago

IGNORANCE2.jpg[/quoteo

This maybe true but at least I can get an unhindered loan from a bank in Thailand which is more than you rather rude personages can do, who rather than debate start hurling insults

[Dirk_brijs]

what did you up in as collateral to get the 1mil baht loan?

I have been looking around for a mortgage on our house (name of the wife) and all they are interested in are silly payslips?

So they rather borrow 500K to someone who has a silly 10K job in KFC (and most liely loose or quit that job withing the next year) than to someone who ownes a 3Mil baht valued home?

I dont see how that would work?

Oh that sense of entitlement again, what an absolutely vulgar post

the fact is the banks are less interested in a 3.0 million valued home simply because if that person defaults and the bank takes the house, they are now stuck with a house they have to off load which costs them money and hassle not with standing the fact there are hundreds of foreclosed properties the banks own that they can't get rid of in other words they may get nothing back and in fact its costing them money keeping a crappy asset on the books

At least with some with a crappy Thb 10 k m job they have some chance of getting cash off the person

Not hard to understand the economics of it, if one has the semblance of education beyond primary school

your funny bro.......

so with having a house your SURE the banks are not getting anything back but with the example of some Thai boy or girl working in KFC they MAYBE get their money back hahahahahahahahahahahahahahahahahahahahahahahaha

you ever been in Thailand? You know that a majority of the Thai (not all I agree though 95% of the men and about 60% of the women) are opportunist only working to get something or buy something and as soon as they have it they quit their jobs??????

So yeah sure the bank MAYBE can get some cash out of those people.........You know too that most people working at KFC have a max wage of 15000baht which is NOT enough to save anything so I wonder how they would ever pay the extra now 4000 a month to pay back their loans?????

So please dont come with the arguament about good earning Thai people as yes I know you have many of them as well and all respect to them for getting a loan based on their earnings.

Another funny fact you mentioned is a 3M valued house would not sell for 500.000 baht plus expenses??????? AS the PO posted this is a 17% LTV and you talk to me about economics hahahahahahahahahahahaa. Dude sales like this would never even make the market as each and every bank director would buy that house before it even hits the market lol. Or how you think all those bank directors own that many houses........

But anyway thank for your reply and your insight in your economical way of thinking and do understand now how you understand this Thai economical set up.My idea on why this system is set up is to make sure people who look for loans like this are forced to loan sharks and yes who are the biggest loan sharks in this country........exactly governmental people. Or do those guys make that much money so they can justify buying entire villages at a time?

And yes I know the saying if you dont like it here pack your bags and leave so I take it as a man though can still question the logic behind certain things right?

[Dirk_brijs]

so back to me original question to the OP based on what and how did you get your loan?

[fletchsmile]

what did you up in as collateral to get the 1mil baht loan?

I have been looking around for a mortgage on our house (name of the wife) and all they are interested in are silly payslips?

So they rather borrow 500K to someone who has a silly 10K job in KFC (and most liely loose or quit that job withing the next year) than to someone who ownes a 3Mil baht valued home?

I dont see how that would work?

Oh that sense of entitlement again, what an absolutely vulgar post

the fact is the banks are less interested in a 3.0 million valued home simply because if that person defaults and the bank takes the house, they are now stuck with a house they have to off load which costs them money and hassle not with standing the fact there are hundreds of foreclosed properties the banks own that they can't get rid of in other words they may get nothing back and in fact its costing them money keeping a crappy asset on the books

At least with some with a crappy Thb 10 k m job they have some chance of getting cash off the person

Not hard to understand the economics of it, if one has the semblance of education beyond primary school

Sorry Soutpeel, but Dirk is right, and you are the one that do not understand economics.

If the house value by an appraisal is 3 mil and the loan is 500K, that's is a 17% LTV (loan to value) and in most countries the loan will be approved, In some up to 30% LTV without ANY requirements like in the USA, and even for foreigners.. If the borrower default and the bank get the house, will be not problem for the bank to sell the house for at least 500K and get its money back.

Sometimes credit history may be the problem without proof of income. In the USA a millionaire with TAX and/or Child support liens cannot get any kind of loan. I do not know if my education was good in primary school in South America. I know English classes were bad, but I think I compensated that with 17 years of work in the US lending market.

The legal system on foreclose in Thailand is much slower and less certain/ more complicated than the US. So it's inaccurate to say that "it will not be a problem to sell the house for at least 500k" if you're talking in a Thai context.

That significantly impacts the possible economics of a transaction if the borrower defaults, compared to the US scenario. It's not that Thai banks don't understand the economics. They do. Just that the economics of the transaction, because of the legal system are different in Thailand, due to the difficulties in and the longer nature of the foreclosure process. Meanwhile a non-performing loan, no matter how well collateralised, is dead money for the bank, until a lengthy resolution process is completed. This has the double whammy of tying up more capital than a performing loan of the same amount and not generating income either.

Thai banks learnt from/ after the 1997 crisis that lending vs ability to repay is more important for them than lending vs collateral.

Cheers

Fletch

Edited February 16, 2015 by fletchsmile

[WilliamCave]

I noticed banks here don't have trained people like western banks . This is not to. Bash Thais,

When I was in Canada I got a ore approved mortgage in. 15 minutes .

And any bank loans officer had excellent info and trained .

Seems training in Thailand is not a priority for there employes in most sectors .

I think the higher ups want to keep there employes under there thumb more by not training them because if they knew anything they would demand better pay and work conditions

[Dirk_brijs]

The legal system on foreclose in Thailand is much slower and less certain/ more complicated than the US. So it's inaccurate to say that "it will not be a problem to sell the house for at least 500k" if you're talking in a Thai context.

That significantly impacts the possible economics of a transaction if the borrower defaults, compared to the US scenario. It's not that Thai banks don't understand the economics. They do. Just that the economics of the transaction, because of the legal system are different in Thailand, due to the difficulties in and the longer nature of the foreclosure process. Meanwhile a non-performing loan, no matter how well collateralised, is dead money for the bank, until a lengthy resolution process is completed. This has the double whammy of tying up more capital than a performing loan of the same amount and not generating income either.

Thai banks learnt from/ after the 1997 crisis that lending vs ability to repay is more important for them than lending vs collateral.

Cheers

Fletch

I do understand that this rule has nothing to do with smart economics and all has to do with law makers though again my origianl quation was exactly that right how does a KFC working boy or girl increase the ability to repay? (again not the good earning Thai person)

[sailblue]

And if they can't or won't sell it at 500k ? The point bring most banks don't the hassle of an asset they can't off load, the house is only worth 3 million if some is prepared to pay 3 million for it, if someone is not prepared to pay anything for it its worth nothing

Your 17% is worth nothing if the property can't be sold

Go and take a look at what's on the repo market from Thai banks that can't be sold and you will understand what I am getting at

And references to the US mortgage scams are not a good example to draw on considering what happened in the US a few years ago

Its a 3,000,000 bt house, not going to be hard to get 500,000 bt in ten minutes. I have seen the books from a bank here. They lend 95%, the buyer in some cases has never made one payment, and the property is worth less than they lent. That is why the banks are holding them, they cannot get close to the value plus the lost interest and penalty interest charges.

There view is keep it so they do not have to show a loss.

So when did you leave school ?

[ToS2014]

I feel some may be missing a point on how well trained bank personnel are in Thailand. First, if I were to walk into any bank in USA/GB/Oz/etc and ask for a loan, the teller would have no idea, and better yet simply cannot 'give' me a loan. All my loans were completed by specialized bank employees who's job is/was specifically around loans. On the flip side, most tellers in America know the office or the individual(s) who can survice a loan so at least they can point to 'someone'. It appears in LoS that if a person doesn't know something the answer is no vice I'll have to contact my supervisor.

[umbanda]

Update on a 10 years BK Bank qualifications for a 6% interest loan. In our case, a home refinancing plus a cash out of about 30% LTV Ratio (Loan to Value ratio)

I can estimate that a loan payment for 10 years may be around 1% of the loan amount.

The bank said that the PTI Ratio (Payment to Income Ratio) has to be no more than 30%......and my wife income was not enough.The manager solution was to deposit an amount of money on my wife bank account to cover at least 6 months of the difference. That bank statement showing that money, plus the statement about her regular monthly income, will resolve the issue. She is self employee.

At the same time I was asked to show my Embassy income verification, but not to co-sign for the loan. Will be OK if was asked anyway.

I am on a retirement extension. I was surprised again by the manager help and interest. Very professional and direct

Again. My wife owns the property for about 10 years and have a very good credit, with the house and car payments, and with credit card payments, etc.

Very similar conditions to an US bank loan qualifications. I didn't ask, but probably a foreigner, on a work permit, and with more than 2 years on the job, may qualify to be a co-signer, and have its income to be added to calculate the PIT Ratio, if not for a house, for a car or other kind of loan.

Edited February 24, 2015 by umbanda