Buing a Condo with Girlfriend 50/50 with a Loan - Will this work?

[SS1]

Hi,

We are thinking of buying a condo with my girlfriend in Bangkok. The gf has been thinking about this for a long while already and I am thinking that it might be a good idea to pay towards a loan instead of paying rent monthly.

The idea is that we, or my girlfriend would get a loan to purchase a condo and we would both pay equal amounts monthly towards it, sharing the condo ownership 50/50.

She has a steady job and I have one as well with a work permit.

First of all, is this arrangement easy to do from a legal point of view, or is it even possible?

[Lukecan]

Yes you can have your name and her name on the deed 50/50

But make sure she assumes 100% of the loan, and you pay half of the loan to her each month. This way you will be in control of the relationship. You can easiily bail if she cheats on you or brings her "brother " to the house.

Edited February 18, 2016 by Lukecan

[thedemon]

I guess it would be possible for a foreigner with Permanent Residence.

But without that a foreigner has to bring 100% of the funds from abroad in order to have their name on the Chanote. That in turn makes it very difficult to obtain a mortgage.

[Paul944]

My first thought was, reading the headline, the condo selling market became so bad that the condo's are sold now including a girlfriend.

I assume you gf has the Thai nationality. If so she can buy any condo. I also assume you do not have the Thai nationality limiting your choice to 49% of the condo's of the 49/51 procent rule. Those are more expensive in general.

If the mortgage is not significant higher as the rent you pay currently i would not make it this complicated and put the condo in the girls name. You just pay your share of the mortgage to her.

If you want a 50/50 split you can also marry her before buying the condo. Then you do not need your name on the title to have the right on 50% after a divorce.

I do not know the current mortgage interest rates in Thailand but I did read it is about 6%. If you want to buy a condo of 1 million and pay during 20 years you pay about 7000 a month

[Bobotie]

I guess it would be possible for a foreigner with Permanent Residence.

But without that a foreigner has to bring 100% of the funds from abroad in order to have their name on the Chanote. That in turn makes it very difficult to obtain a mortgage.

not strictly true, someone who has worked in Thailand and has a WP can purchase a condo from the money they earned in Thailand and have their name on the Chanote,

the issue regarding bringing money in from abroad for condo purchase is more to do with being able to repatriate the money back out the country if you sell the condo...if the money is not brought in correctly you may have problems getting the money back out if you sell...

If the OP has no credit history in Thailand he will never get a mortgage for Condo from a Thai bank, even with a WP, if a person has built up a credit history in Thailand, has credit cards, WP for a number of years and earns a decent salary, a mortgage in their own name for a condo is possible with some banks such as SCB

[fletchsmile]

Yes you can have your name and her name on the deed 50/50

But make sure she assumes 100% of the loan, and you pay half of the loan to her each month. This way you will be in control of the relationship. You can easiily bail if she cheats on you or brings her "brother " to the house.

The names could in theory be 50/50 on the condo deed.

Couple of issues though:

For the foreigners share, he needs to show that his money came from overseas. This will effectively stop them getting a mortgage for anything over 50% of the property

In addition banks like to see the ownership name on the condo and the mortgagee names match, so this will likely cause issues with the bank in getting a loan. i.e his Thai partner may be able to get a loan for half the value but the bank may not like the fact the borrower owns only 50%

For his share it's most likely he would therefore have to pay cash if the money comes from overseas. That defeats the 50/50 and shared loan. Having 2 loans: her for her half in Thailand and him for his half from overseas isn't likely to fly for a number of reasons.

Edited February 18, 2016 by fletchsmile

[MaeJoMTB]

Can't do it,

Would the condo be in foreigner 49% or Thai 51%?

Not to mention, no bank is gonna give YOU and HER a joint loan in Thailand.

Edited February 18, 2016 by MaeJoMTB

[SS1]

Thanks for the replies.

Yes you can have your name and her name on the deed 50/50

But make sure she assumes 100% of the loan, and you pay half of the loan to her each month. This way you will be in control of the relationship. You can easiily bail if she cheats on you or brings her "brother " to the house.

This sounds like a good plan. If she buys the condo and takes the loan in her name and later we change the ownership to 50/50 once the loan has already been approved. Then I'll pay her half of the loan each month.

My first thought was, reading the headline, the condo selling market became so bad that the condo's are sold now including a girlfriend.

I assume you gf has the Thai nationality. If so she can buy any condo. I also assume you do not have the Thai nationality limiting your choice to 49% of the condo's of the 49/51 procent rule. Those are more expensive in general.

If the mortgage is not significant higher as the rent you pay currently i would not make it this complicated and put the condo in the girls name. You just pay your share of the mortgage to her.

If you want a 50/50 split you can also marry her before buying the condo. Then you do not need your name on the title to have the right on 50% after a divorce.

I do not know the current mortgage interest rates in Thailand but I did read it is about 6%. If you want to buy a condo of 1 million and pay during 20 years you pay about 7000 a month

She is a Thai national indeed and I am not. I have never heard of a 49/51 rule for condominiums, could you tell me more? I thought this only applied to companies and that foreigners aren't allowed to own land. I've always thought foreigners are able to purchase condos freely, or am I wonrg?

[Paul944]

I only know the 49/51 rule exists. A little search on thaivisa will give you a lot of detailed information.

In what price range you are looking? You probably will not get a mortgage above 80% so you will need to have at least 20% in savings already. Or, very unwise, borrow the 20% unofficially from family, friends or a loan shark.

You really have to look at the rent and mortgage interest difference. It is very unlikely that you will want to live in this condo for 20 years. Condo's do not keep their value as in the west so buying one is not without risk. Which means that renting can be cheaper altough the mortage interest is lower.

Personally I would only buy a condo if I had the money available and in an area known to stayopular or becoming popular. Like condo's in the neighborhood of a BTS station.

[SS1]

I only know the 49/51 rule exists. A little search on thaivisa will give you a lot of detailed information.

In what price range you are looking? You probably will not get a mortgage above 80% so you will need to have at least 20% in savings already. Or, very unwise, borrow the 20% unofficially from family, friends or a loan shark.

You really have to look at the rent and mortgage interest difference. It is very unlikely that you will want to live in this condo for 20 years. Condo's do not keep their value as in the west so buying one is not without risk. Which means that renting can be cheaper altough the mortage interest is lower.

Personally I would only buy a condo if I had the money available and in an area known to stayopular or becoming popular. Like condo's in the neighborhood of a BTS station.

Around 3 million and the 20% savings won't be an issue.

That is actually really good advice about the condo value, will definitely need to do some research and calculations first.

[uthaithanirules]

Doesnt matter where it is in the world, compound interest is that unseen cost that catches everyone out. With Owner occupier home loans, the appreciation value doesnt get thrown back into the capital every month/quarter/year.

A million baht condo, the only money you make, if at all. is the increase in value how many years later once you sell it.

Versus instead sticking your money into something thats going to compound regularly, like shares

...its -7% or so each year on mortgage interest, -7% that doesnt return a +5%, so really -7.35%....the multiply for each year of the loan -7.35%*-7.35%....shit adds up

Condo's do not keep their value as in the west so buying one is not without risk.

I really dont understand why anyone would buy a condo in thailand. Just stick you money even in a lame internet "high" interest bank account and rent instead, you'd have more money in 20 years than if youd bought the thing

[thedemon]

Doesnt matter where it is in the world, compound interest is that unseen cost that catches everyone out. With Owner occupier home loans, the appreciation value doesnt get thrown back into the capital every month/quarter/year.

A million baht condo, the only money you make, if at all. is the increase in value how many years later once you sell it.

Versus instead sticking your money into something thats going to compound regularly, like shares

...its -7% or so each year on mortgage interest, -7% that doesnt return a +5%, so really -7.35%....the multiply for each year of the loan -7.35%*-7.35%....shit adds up

Condo's do not keep their value as in the west so buying one is not without risk.

I really dont understand why anyone would buy a condo in thailand. Just stick you money even in a lame internet "high" interest bank account and rent instead, you'd have more money in 20 years than if youd bought the thing

The usual Thaivisa everyone must be at least as stupid as I am advice.

[Nomyai]

this is worse than bldg a house in the village.or just as bad!

[Nomyai]

Can't do it,

Would the condo be in foreigner 49% or Thai 51%?

Not to mention, no bank is gonna give YOU and HER a joint loan in Thailand.

i wonder why?

[fletchsmile]

I only know the 49/51 rule exists. A little search on thaivisa will give you a lot of detailed information.

In what price range you are looking? You probably will not get a mortgage above 80% so you will need to have at least 20% in savings already. Or, very unwise, borrow the 20% unofficially from family, friends or a loan shark.

You really have to look at the rent and mortgage interest difference. It is very unlikely that you will want to live in this condo for 20 years. Condo's do not keep their value as in the west so buying one is not without risk. Which means that renting can be cheaper altough the mortage interest is lower.

Personally I would only buy a condo if I had the money available and in an area known to stayopular or becoming popular. Like condo's in the neighborhood of a BTS station.

Around 3 million and the 20% savings won't be an issue.

That is actually really good advice about the condo value, will definitely need to do some research and calculations first.

If your condo is less than THB 10 mn then more than 80% is definitely possible. Will depend on your credit standing or I should hers.

If above THB 10mn above 80% is less likely because of BOT rules on capital which have an 80% cap on Loan To Value (LTV) for loans above THB 10mn if the bank wants it to be treated as a qualifying mortgage for their capital calculation purposes. If non-qualifying they must set aside more capital.

Most likely scenario is if your girlfriend borrows and buys the condo in her name, possibly with you as a guarantor if needed. Banks prefer you to be legally married with certificate to lend in this way. It is more likely they will say no if you're not legally married. It is possible though, as I helped a friend do this a few years back and they weren't married.

Given any purchase by a foreigner must come from overseas money, plus banks like to see the mortgagee name and owner match, the most likely scenario is a condo in your girlfriends name with you as a possible guarantor if needed.

So if it were me, I would go for as low deposit as possible. Mortgage and condo in your girlfriends' name. Then pay her half of the mortgage payments. Or you could set up a joint account from which the mortgage payments are made by DD and you pay into that account each month. So if between you, you put down say 5%, borrow 95%, if it all goes pear shaped, she has the condo asset, but she also has the loan liability. If you're not needed as guarantor, all the better. Your half of the mortgage will likely be less than rent anyway.

What you could also do is acquire other assets in your name only where you both pay half each. eg investments or car, where it's in your name but she pays half. These could also be monthly payments.

Cheers

Fletch

Edited February 20, 2016 by fletchsmile

[WhizBang]

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Next.

[Gutenberg]

Yes you can have your name and her name on the deed 50/50

But make sure she assumes 100% of the loan, and you pay half of the loan to her each month. This way you will be in control of the relationship. You can easiily bail if she cheats on you or brings her "brother " to the house.

To the condo in this situation.

[Asiantravel]

I only know the 49/51 rule exists. A little search on thaivisa will give you a lot of detailed information.

In what price range you are looking? You probably will not get a mortgage above 80% so you will need to have at least 20% in savings already. Or, very unwise, borrow the 20% unofficially from family, friends or a loan shark.

You really have to look at the rent and mortgage interest difference. It is very unlikely that you will want to live in this condo for 20 years. Condo's do not keep their value as in the west so buying one is not without risk. Which means that renting can be cheaper altough the mortage interest is lower.

Personally I would only buy a condo if I had the money available and in an area known to stayopular or becoming popular. Like condo's in the neighborhood of a BTS station.

Around 3 million and the 20% savings won't be an issue.

That is actually really good advice about the condo value, will definitely need to do some research and calculations first.

If your condo is less than THB 10 mn then more than 80% is definitely possible. Will depend on your credit standing or I should hers.

If above THB 10mn above 80% is less likely because of BOT rules on capital which have an 80% cap on Loan To Value (LTV) for loans above THB 10mn if the bank wants it to be treated as a qualifying mortgage for their capital calculation purposes. If non-qualifying they must set aside more capital.

Most likely scenario is if your girlfriend borrows and buys the condo in her name, possibly with you as a guarantor if needed. Banks prefer you to be legally married with certificate to lend in this way. It is more likely they will say no if you're not legally married. It is possible though, as I helped a friend do this a few years back and they weren't married.

Given any purchase by a foreigner must come from overseas money, plus banks like to see the mortgagee name and owner match, the most likely scenario is a condo in your girlfriends name with you as a possible guarantor if needed.

So if it were me, I would go for as low deposit as possible. Mortgage and condo in your girlfriends' name. Then pay her half of the mortgage payments. Or you could set up a joint account from which the mortgage payments are made by DD and you pay into that account each month. So if between you, you put down say 5%, borrow 95%, if it all goes pear shaped, she has the condo asset, but she also has the loan liability. If you're not needed as guarantor, all the better. Your half of the mortgage will likely be less than rent anyway.

What you could also do is acquire other assets in your name only where you both pay half each. eg investments or car, where it's in your name but she pays half. These could also be monthly payments.

Cheers

Fletch

and I would like to suggest keep it businesslike in that the full terms of any agreement should be clearly in writing and then hopefully locked away forever.

far better to express everything in writing now when everyone's feelings are positive(possibly even with the assistance of a lateral thinking lawyer if you can find one) compared to trying to sift through the documents and everything later if things happened to turn acrimonious.

I remember back in the early1980s when prenuptial agreements were not so common as they are today and when the suggestion of clearly documenting everything generated the response " oh you are so unromantic "

Edited February 21, 2016 by Asiantravel

[Gutenberg]

Doesnt matter where it is in the world, compound interest is that unseen cost that catches everyone out. With Owner occupier home loans, the appreciation value doesnt get thrown back into the capital every month/quarter/year.

A million baht condo, the only money you make, if at all. is the increase in value how many years later once you sell it.

Versus instead sticking your money into something thats going to compound regularly, like shares

...its -7% or so each year on mortgage interest, -7% that doesnt return a +5%, so really -7.35%....the multiply for each year of the loan -7.35%*-7.35%....shit adds up

Condo's do not keep their value as in the west so buying one is not without risk.

I really dont understand why anyone would buy a condo in thailand. Just stick you money even in a lame internet "high" interest bank account and rent instead, you'd have more money in 20 years than if youd bought the thing

If you live in your own condo you do not need to pay rent in another condo. But most people don't consider it a profit if they don't pay rent. Here is an example calculation if they did:

3mb condo, e.g. 5% return per year would equal 150,000 THB / year which is the amount you also would pay rent for it or while renting another condo (12500 THB / month) which you can take off the needed resale value after 10 years. So, after 10 years living in the condo, you only need to sell the condo for 1,5 mb to break even (if you don't consider money devaluation, inflation, etc.). If you sell it for 2,5mb you made already 3,33% return per year for your 3mb investment.

[uthaithanirules]

Doesnt matter where it is in the world, compound interest is that unseen cost that catches everyone out. With Owner occupier home loans, the appreciation value doesnt get thrown back into the capital every month/quarter/year.

A million baht condo, the only money you make, if at all. is the increase in value how many years later once you sell it.

Versus instead sticking your money into something thats going to compound regularly, like shares

...its -7% or so each year on mortgage interest, -7% that doesnt return a +5%, so really -7.35%....the multiply for each year of the loan -7.35%*-7.35%....shit adds up

Condo's do not keep their value as in the west so buying one is not without risk.

I really dont understand why anyone would buy a condo in thailand. Just stick you money even in a lame internet "high" interest bank account and rent instead, you'd have more money in 20 years than if youd bought the thing

The usual Thaivisa everyone must be at least as stupid as I am advice.

okey dokey.

Well, it has always constantly astounded me back home, forget thailand. Financial planners, tax accountants , you name it, everyone that claims they know what they are talking about. Why are so many such nuthuggers when it comes to property. I always ask them to do what should be the relatively simple compound interest calculation...usually draws blank stares.

Fine then, sink all your money into property, put all your eggs in one basket, buy the condo three times more expensive than you need cos that makes you girlfriend happy. Solid financial advice.

Property will never beat shares or especially superannuation

[steve187]

just be careful, this things can turn about and bite you on the a*se,

i fail to see why people are talking about a 1 million baht loan for a condo in Bangkok, i would have thought about 5 million would be a better sum, to work out figures on