Mortgages/property Loans

[njoylife2000hk]

I am looking to buy a house/villa in the Jomtien-Pattaya area - but understand that there have been recent changes in Thai bank's attitudes to lending/offering mortgages to foreign buyers?

I have tried contacting several Thai banks (Bank Of Bangkok, SCB etc) for clarification on this point - but am not getting much help. Can anyone advise if it IS possible to still get a mortgage/loan on a property and if so, which banks are able to offer financing? Incidentally, I am British but live and work in HK and do not (presently) have a Thai partner!

Your help or suggestions would be most welcome and u can contact me direct at - [email protected]

Many thanks - Laurie

[bendix]

My (admittedly) limited understanding is that money used by a foreigner to buy a property in Thailand has to be seen to be brought in from overseas, so in that sense it's not possible to get a mortgage from a Thailand bank.

A way around this has been developed by Bangkok Bank in that they allow farang to apply for mortgages from their one Singapore branch - you are borrowing the cash, but it is coming into thailand from another country, so circumvents the rules.

But I've not heard of anyone actually getting one of these loans yet. My understanding is that take up is minimal to date.

Other wiser people will know more.

[Casanundra]

It is possible to get a mortgage providing that you are prepared to accept the following conditions:

a) Pay 2.25% above MLR (currently 7.25%) which means you pay 9.5% APR

Pay 50 to 70% deposit on the property

c) Pay the loan back in 8 years maximum

Both SCB and Kassikorn are offering the above conditions on their mortgages to Foreigners but they also expect to see things like Work permit, contract of employment, valid visa and lots of other paperwork and even then they 90% of the time will refuse you out right based on some hormonal rule of thumb they use.

To be honest you will be better off paying cash and when you factor int hat a Thai will get the same money for MLR - 2.25% (meaning 5% APR) while you pay 9.5% then it basically makes it that much more distasteful.

[Dragonman]

My (admittedly) limited understanding is that money used by a foreigner to buy a property in Thailand has to be seen to be brought in from overseas, so in that sense it's not possible to get a mortgage from a Thailand bank.

A way around this has been developed by Bangkok Bank in that they allow farang to apply for mortgages from their one Singapore branch - you are borrowing the cash, but it is coming into thailand from another country, so circumvents the rules.

But I've not heard of anyone actually getting one of these loans yet. My understanding is that take up is minimal to date.

Other wiser people will know more.

The rules were changed to allow loans in Thailand to be paid into non resident baht accounts. They would then be allowable by Land Office. However various people have posted recently that banks have ceased giving reasonable loans, under BoT instructions. Despite my research I cannot find any circular to this effect, and either it is "word of mouth' or the banks are passing the buck, as normal.

[listenup]

My (admittedly) limited understanding is that money used by a foreigner to buy a property in Thailand has to be seen to be brought in from overseas, so in that sense it's not possible to get a mortgage from a Thailand bank.

A way around this has been developed by Bangkok Bank in that they allow farang to apply for mortgages from their one Singapore branch - you are borrowing the cash, but it is coming into thailand from another country, so circumvents the rules.

But I've not heard of anyone actually getting one of these loans yet. My understanding is that take up is minimal to date.

Other wiser people will know more.

I was told this today from my BKK branch and waiting for a call back from the Singapore office. I will post an update as soon as I recieve the call.

[thaigene2]

I went through this too. Was in Sing recently (just pre coup) and spoke to the Bangkok Bank mortgage officer there. The minimum purchase price had climbed to 12 million and you still had to come up with around half of that. Then there were lots of other costs tacked on like a 5,000 Sing dollar arrangment fee and you had to pay back in 10 years or less.

I figured out the minimum repayment at over 100,000 baht per month.

The loans officer said the whole thing might collapse too..as things were "unstable" - not sure what was meant by that...might have been politics or might have meant BOT getting really frigid toward foreigners.

By the way Dragon Man..not sure the rules changed..think it was always the case that foreigners didn't have access to thai-baht loans (possbile excception for those with PR status).

I can confirm what Casanundra says about the higher rate for guaranteeing a Thai wife's mortgage..Kasikorn just told me the same.

[thaigene2]

...sorry for the double post..but add all of the above to the fact that you can buy a condo here but that doesn't mean you have the right visa-wise to actually live in it!!! 90 days and out ya go pal! If you're over 50 and have a regular income (foreign of course - the Thais wouldn't have it any other way)..then you have a bit of a possibility for year round enjoyment of your property

[teej]

It is possible to get a mortgage providing that you are prepared to accept the following conditions:

a) Pay 2.25% above MLR (currently 7.25%) which means you pay 9.5% APR

Pay 50 to 70% deposit on the property

c) Pay the loan back in 8 years maximum

Both SCB and Kassikorn are offering the above conditions on their mortgages to Foreigners but they also expect to see things like Work permit, contract of employment, valid visa and lots of other paperwork and even then they 90% of the time will refuse you out right based on some hormonal rule of thumb they use.

To be honest you will be better off paying cash and when you factor int hat a Thai will get the same money for MLR - 2.25% (meaning 5% APR) while you pay 9.5% then it basically makes it that much more distasteful.

I hold a Thai Passport but I've never been offered the MLR - 2.25% deal. Are you sure about this relating to Thais?

[Dragonman]

I went through this too. Was in Sing recently (just pre coup) and spoke to the Bangkok Bank mortgage officer there. The minimum purchase price had climbed to 12 million and you still had to come up with around half of that. Then there were lots of other costs tacked on like a 5,000 Sing dollar arrangment fee and you had to pay back in 10 years or less.

I figured out the minimum repayment at over 100,000 baht per month.

The loans officer said the whole thing might collapse too..as things were "unstable" - not sure what was meant by that...might have been politics or might have meant BOT getting really frigid toward foreigners.

By the way Dragon Man..not sure the rules changed..think it was always the case that foreigners didn't have access to thai-baht loans (possbile excception for those with PR status).

I can confirm what Casanundra says about the higher rate for guaranteeing a Thai wife's mortgage..Kasikorn just told me the same.

The Condominium Amendment Act allowed for foreigners who work in Thailand to have wages earned in Thailand, and loans from Thai Financial Institutions , paid into a non-resident baht accounts. In fact it was BoT who initiated this. It is, I believe, the banks themselves who are wary of loans to foreigners on commercial grounds, not monetary policy. They are consistently chased by BoT over the amount of "write offs", and now have to get specific permission for a total loan write off.

Also you may be aware, Thailand does not have any "Right of Sale" by the bank for non payments of mortgages. They must go through the Court System which can take upward of 10 years to gain possession of the property.

Edited October 21, 2006 by Dragonman

[njoylife2000hk]

Thanx everyone for your advice - most helpful. (actually, I have already experienced many of the things you mention in your various replies but that doesn't mean that I don't appreciate your comments).

Having said that - my circumstances are a little different. I do NOT (presently) live in Thailand - I live and work in Hong Kong - but wish to retire to Thailand in 5-10 years. So I am buying property there both as an investment and for my retirement home. As a consequence, I went for a slightly more upmarket property (approx 12m bht) because at that time, many banks (I spoke to SCB and Bangkok Bank before putting down a deposit) were offering mortgages.

Of course, we all know that this situation has now changed! So having commited myself to a 50% deposit, I am finding it very difficult to come up with the other 50% - which I initially thought would not be a problem. Naturally, I wish I was in a position to buy my house outright without the need to seek financial support - but regrettably, that is not the case!

So can anyone tell me if SCB or Kassikorn would be able to offer me a mortgage on the balance (50%) and provide any email addresses/contact names to follow this up with? I realise that I will have to pay the 'penalty' of being a foreigner also (compared to Thais) but that's a given and not much I can do about it.

Once again many thanx - and pls let me have your further comments.

It is possible to get a mortgage providing that you are prepared to accept the following conditions:

a) Pay 2.25% above MLR (currently 7.25%) which means you pay 9.5% APR

Pay 50 to 70% deposit on the property

c) Pay the loan back in 8 years maximum

Both SCB and Kassikorn are offering the above conditions on their mortgages to Foreigners but they also expect to see things like Work permit, contract of employment, valid visa and lots of other paperwork and even then they 90% of the time will refuse you out right based on some hormonal rule of thumb they use.

To be honest you will be better off paying cash and when you factor int hat a Thai will get the same money for MLR - 2.25% (meaning 5% APR) while you pay 9.5% then it basically makes it that much more distasteful.

[thaigene2]

In that case since it is 12 m you should be eligible for the Bangkok Bank loan from the Bank's Signapore branch.

Bear in ming your repayments will be around 100,000 baht per month.

[eljeque]

See if the developer has any ideas. I have seen several of the upmarket properties in Pattaya/Jomtien have financing assistance. I never asked about anything in these establishments, but it is free to ask the developer.

Also, ask the developer to slow down on the building of your property to give you more time. Where my house is being built, it takes forever for anything to get accomplished, so I am not worried about it.

If you simply cannot find the financing:

You can also presell your property before completion, but selling the contract. I would expect that the price of your property has been increasing during the build cycle (and it is closer to being finished), so you would not have difficulties selling it for at least what you paid for it, and the new buyer would nto have to wiat a year or more for completion.

[Unknown]

It is possible to get a mortgage providing that you are prepared to accept the following conditions:

a) Pay 2.25% above MLR (currently 7.25%) which means you pay 9.5% APR

' Pay 50 to 70% deposit on the property

c) Pay the loan back in 8 years maximum

To be honest you will be better off paying cash and when you factor int hat a Thai will get the same money for MLR - 2.25% (meaning 5% APR) while you pay 9.5% then it basically makes it that much more distasteful.

These conditions are negotiable, at least the 2 first ones.

I borrowed money from SCB not so long ago to buy a house, at following conditions:

a) MLR, at that time 6.5% fixed for the duration of the loan

' deposit 30% of the value of the house

c) yes, 8 years

Edited October 21, 2006 by Unknown