How to finance a House and Land countryside - Thaistyle?

[4jasmin]

hello Community

I would like to get a "second" ( Farang ) Opinion, how to finance a House and Land in Thailand

in a small Town or small City

Before I start to discuss this with my little Thai Family, I would like to get some Ideas, what Kind of

Problems and Difficulties I will have to "face"

Thanks in Advance for any Input

[Crossy]

OK, entire thread deleted. Off topic posts and responses.

The topic is about finance options, not whether our OP can own land or whether he should rent.

Further off-topic posts will be removed without notice.

[slipperylobster]

Finance your own property? I am not clear. Or are you financing property that belongs to somebody else?

If the property is in your name....financing should be just a matter of applying for a mortgage...or loan....in your home country....to be used here.

I qualify for financing in some countries..but, the missing link here is that the title is in another name... So there is no way (for myself). Cash only (for me). Tried for five years. Might have to get married and have the wife do it for me.

So the answer is that you simply cannot finance....your spouse might.

Many of us our out of luck...as we do not have spouses.

Edited April 9, 2016 by slipperylobster

[Crossy]

Back on topic.

Assuming you have a Thai spouse a visit to your local SCB (the purple bank) may be useful. They won't give you as a foreigner a mortgage but if your partner has an income they may offer them a loan with you signing as guarantor.

[uthaithanirules]

Not enough information

How long you known the girl, are you married, any of your own kids?, any of her family have land you can rent?

You said thaistyle, does that mean the house as well, what does town mean, right in the centre or something nicer and bigger a few miles away

[oxo1947]

Please don't be put off by the doom sayers 4jasmin---I was for many years, Wow could I have brought some nice property when I came here 20+ years ago.

But I built in Issan just over 10 years ago----and this year (taking into account the average rents in my area) the house has now completely paid for itself.

Ownership --probably your best option is in Thai legal terms "Sit thi gap gin ta lord shee vit" --its more commonly known to farangs by its French name----USUFRUCT and can be made for your life time....However I must point out to you there have been 3 court cases that I know of, where the court has reduced the length of time to 30 years. It was expensive for the Thai to contest it, as it has been granted by the land office--however in those 3 cases the owner (ex wife) had a new farang boyfriend paying the cost-----but the original guy still had it for 30 years.

I think maybe you are also asking about financing the purchase. As it won’t be in your name the bank will look at the income of the owner , what she is earning etc. Good luck with it all......................

[kbelyeu]

Thai banks can and will lend money for land purchases and home building but most banks will not consider your earnings as a farang spouse.. only the earnings of your wife. She will need a steady job with decent pay and prior credit history prior to getting a loan.

Perhaps you could provide more details..

Kurt

[chiang mai]

Please don't be put off by the doom sayers 4jasmin---I was for many years, Wow could I have brought some nice property when I came here 20+ years ago.

But I built in Issan just over 10 years ago----and this year (taking into account the average rents in my area) the house has now completely paid for itself.

Ownership --probably your best option is in Thai legal terms "Sit thi gap gin ta lord shee vit" --its more commonly known to farangs by its French name----USUFRUCT and can be made for your life time....However I must point out to you there have been 3 court cases that I know of, where the court has reduced the length of time to 30 years. It was expensive for the Thai to contest it, as it has been granted by the land office--however in those 3 cases the owner (ex wife) had a new farang boyfriend paying the cost-----but the original guy still had it for 30 years.

I think maybe you are also asking about financing the purchase. As it won’t be in your name the bank will look at the income of the owner , what she is earning etc. Good luck with it all......................

Although if the OP is not legally married to his Thai partner, the usufruct, if granted by the partner, would be almost impossible to challenge.

[BritManToo]

What Crossy says, you need a woman who is employed and credit worthy, and can show regular bank deposits for 6 months plus, she can get a home loan.

Foreigner with work permit, credit worthy and can show regular bank deposits for 6 months plus, may get a loan, but only for something he can own. Condo, yes, land no.

Rough estimate,

Thai earning 25k/month can get a 1.5Mbht home loan fairly easily, more if a government employee.

Edited April 9, 2016 by BritManToo

[TPI]

My wife and I were limitied to the "farmers bank" and they would only take ALL of our land to secure the loan! My wife(Thai) and I recieve a very generous pension/s from OS....there is not a bank in Thailand that would even consider lending money, their excuse was " what if the country goes broke and you lose your pension" or " that's too complicated for us and we'll have to go to head office, who wont approve it anyway!"

If you are buying 10 or so rai and your wife is registered as a "farmer" then you have a good chance at the "BAAC" bank! Good luck!

[slipperylobster]

Thai banks can and will lend money for land purchases and home building but most banks will not consider your earnings as a farang spouse.. only the earnings of your wife. She will need a steady job with decent pay and prior credit history prior to getting a loan.

Perhaps you could provide more details..

Kurt

To be clear....

Only a Thai can apply for a home loan on land property (with house).

He cannot.

I don't know if he is married or not...but his wife/girlfriend would have to do the whole shot. I think he just signs a release that her money is not his...(or something to that effect).

There is a loophole...I think. If the seller (preferable a wife who has a farang husband) financed you. (The farang has nothing to do with it). The wife has the chanote (hopefully)...and you finance it with her.The farang husband can witness the deal. You could put balloon payments on it...but don't expect to get the chanote until it is all paid for. In the meantime, should the owner (thai) decides to pawn out the property at the same time...you might have a problem.

Farang cannot finance it as his name is not on the chanote. Many have found that the chanote has disappeared (pawned) in their absence.

Edited April 9, 2016 by slipperylobster

[bazza40]

OP may be better off bypassing the banks entirely and simply saving enough to have the house built outright. He will never have any equity in the land. Banks don't pay 2% pa to depositors and lend at 6-8% to borrowers out of altruism.

It is possible to build a 2 bedroom house in a Thai village for 600,000 baht. I've done it, although I simply gave my Thai GF the money and told her to get it done.

It very much depends on the family dynamic. If there are going to be relations looking for a place in the new house as well, that's a red flag.

The OP should always bear in mind he should never put more money into Thailand than he can afford to walk away from. Otherwise, there's the risk of heartache and bitterness.

[swissie]

Please don't be put off by the doom sayers 4jasmin---I was for many years, Wow could I have brought some nice property when I came here 20+ years ago.

But I built in Issan just over 10 years ago----and this year (taking into account the average rents in my area) the house has now completely paid for itself.

Ownership --probably your best option is in Thai legal terms "Sit thi gap gin ta lord shee vit" --its more commonly known to farangs by its French name----USUFRUCT and can be made for your life time....However I must point out to you there have been 3 court cases that I know of, where the court has reduced the length of time to 30 years. It was expensive for the Thai to contest it, as it has been granted by the land office--however in those 3 cases the owner (ex wife) had a new farang boyfriend paying the cost-----but the original guy still had it for 30 years.

I think maybe you are also asking about financing the purchase. As it won’t be in your name the bank will look at the income of the owner , what she is earning etc. Good luck with it all......................

Although if the OP is not legally married to his Thai partner, the usufruct, if granted by the partner, would be almost impossible to challenge.

If Op wants to go the "USUFRUCT-WAY", he must do it now (Before Marriage.)

A usufruct can be cancelled by both parties at any time during marriage and 1 year after divorce. Full stop.

Cheers

[chiang mai]

Please don't be put off by the doom sayers 4jasmin---I was for many years, Wow could I have brought some nice property when I came here 20+ years ago.

But I built in Issan just over 10 years ago----and this year (taking into account the average rents in my area) the house has now completely paid for itself.

Ownership --probably your best option is in Thai legal terms "Sit thi gap gin ta lord shee vit" --its more commonly known to farangs by its French name----USUFRUCT and can be made for your life time....However I must point out to you there have been 3 court cases that I know of, where the court has reduced the length of time to 30 years. It was expensive for the Thai to contest it, as it has been granted by the land office--however in those 3 cases the owner (ex wife) had a new farang boyfriend paying the cost-----but the original guy still had it for 30 years.

I think maybe you are also asking about financing the purchase. As it won’t be in your name the bank will look at the income of the owner , what she is earning etc. Good luck with it all......................

Although if the OP is not legally married to his Thai partner, the usufruct, if granted by the partner, would be almost impossible to challenge.

If Op wants to go the "USUFRUCT-WAY", he must do it now (Before Marriage.)

A usufruct can be cancelled by both parties at any time during marriage and 1 year after divorce. Full stop.

Cheers

"If Op wants to go the "USUFRUCT-WAY", he must do it now (Before Marriage.)".

Er, um Swissie darling, that's what I wrote, is it not!

[chickenslegs]

I may be wrong, but I think the OP is intending to provide the financial support for his family to buy a piece of land and build a house on it - presumably a family home.

I don't have any personal experience of doing this, but from my extended Thai family I glean that "Thai style" (for Thais who don't have "steady" jobs and can't borrow from banks) is...

1) Save enough money to buy a piece of land (more often - inherit or claim a piece of family land).

2) Save enough money to raise the land and build a wall/fence around it.

3) Save enough money to sink the foundations.

4) Save enough money..... well, you see where this is going.

Of course, if the OP is providing the cash, there may be no need to save, but it would still be a good idea to pay in stages and make sure that each step is completed satisfactorily before paying for the next.

The DIY housing forum has some great information and a lot of very helpful members http://www.thaivisa.com/forum/forum/124-diy-housing-forum/

[Paul944]

A little more information will be helpfull.

Does your wife have a job with a monthly income?

Which percentage can you pay with your savings?

A bank will require you pay at least 20% with own money before even starting to think about giving you a mortgage. A foreign income will not be valid as a security. In which case a bank will only finance about 60% of their estimate of the resale value of the property. So if you buy something for 2 million, the bank values it for 1.5 million, you can maybe get a mortgage for 800,000. It all depends on the bank policies and employee you speak with. Most employees will not take any responsibility or do not want to do some extra effort, so everything more complicated as a standard mortgage will be rejected.

Note the interest in Thailand is about 6%. So a mortgage can be more expensive as renting.

[RKASA]

If you can afford a small piece of land and you only want a simple house - you can purchase the material and build it. I know of one person that built a small house years ago on some cheap but good land and used a Credit card to buy the material. Ended up with about a 220 dollar a month min payment on the card, but because he had cash flow he paid it off in two years saving a lot of the interest he would have paid over a 20 year on a mortgage. Higher interest yes, but short term if you make the extra payments and no bank involvement etc. Oh and he earned air miles with ever purchase he would joke.

It is a roll of the dice and depends on what your relationship is but anything is possible. If your handy you can build more for the same money. After that he has saved rent money month on month for over ten years now. If you do the math it worked for him.