Can a farang get a bank loan or mortgage for buying a condominium?

[TKI]

Dear all,

 

a friend of mine, 56 year old teacher at a public school in Germany wants to buy a condominium for 3 MB in Jomtien to live her retirement here.

She has no savings, but a very good income. Banks in Germany refused to give her a mortgage for buying a property abroad (logically).

 

Now the question:

Is there a chance to get a loan / mortgage from a Thai bank?

 

Thank you very much.

Any helpful comments are appreciated.

[ezzra]

 

No can do,  to get a home loan from the UOB bank here in Thailand, the only farang

friendly bank for home loans,

she has to have an employment records where she worked in Thailand and

paid taxes for few years, has to have current work permit  and has to have at

least 20-30% down payment, and the bank will not entertain giving her a loan

as she have no income to show for, so the answer to your question will be not

possible....

[Witblitz]

Can on a condo, if you have a decent Thai credit history, been offered one by SCB in the past and of course your working here with a decent salary and WP

 

I built my credit score up by

1. Credit card payments on time

2. Co signing on a mortage for a Thai national 

3. Multiple car loans full paid over the years 

Edited August 20, 2016 by Witblitz

[Chicog]

If she has a very good income, can she not get a personal loan for 76000 euros?

Or is her very good income not as very good as you say?

You have to show you brought the funds in from overseas to buy a condo anyway.

 

 

[impulse]

Friends don't let friends stake their retirement on Thai real estate.

 

No telling what Jomtien will look like when it's time to retire and enjoy her condo, much less what the condo will look like. (Edit: or who will really own it)

 

Invest the money into some German property where she understands the rules and the market and can get a loan, ride the appreciation and use the proceeds from the sale to buy a condo in Thailand- when it's time (and if she can qualify for residence under future Thai immigration laws)

Edited August 20, 2016 by impulse

[stupidfarang]

5 hours ago, impulse said:

Friends don't let friends stake their retirement on Thai real estate.

 

No telling what Jomtien will look like when it's time to retire and enjoy her condo, much less what the condo will look like. (Edit: or who will really own it)

 

Invest the money into some German property where she understands the rules and the market and can get a loan, ride the appreciation and use the proceeds from the sale to buy a condo in Thailand- when it's time (and if she can qualify for residence under future Thai immigration laws)

Very good advice, also she could rent her German property out (have the security in Germany) and then rent a condo or a house in Thailand, if she paid £2,500 a year in rent in Thailand x 25 years equals £62,500. It is a safer option and allows her to move to any part of Thailand if she gets bored with Jomtein or if she wants to move back to Germany. I live in a brand new 3 bedroom, 3 bathroom house I rent for 8,000 per month (am in the South of Thailand).  In BKK was only paying £200 a month for a condo. 

[xvend]

The condo itself will finance "your friend", because they know 80% of the time that "your friend" will default on the loan contract after several payments and the condo will go back to the actual owner and all those payments as profit.

 

Cash is king, finance nothing in Thailand unless you have a guaranteed source of income.

 

As far as from a bank, you need fixed assets here as collateral, either under a business or from a Thai spouse.

[Witblitz]

5 hours ago, xvend said:

The condo itself will finance "your friend", because they know 80% of the time that "your friend" will default on the loan contract after several payments and the condo will go back to the actual owner and all those payments as profit.

 

Cash is king, finance nothing in Thailand unless you have a guaranteed source of income.

 

As far as from a bank, you need fixed assets here as collateral, either under a business or from a Thai spouse.

Absolute rubbish, blatently obvious you have no idea how finance works in Thailand as regards collateral etc 

[Andrew65]

On 8/20/2016 at 2:55 PM, Chicog said:

If she has a very good income, can she not get a personal loan for 76000 euros?

Or is her very good income not as very good as you say?

You have to show you brought the funds in from overseas to buy a condo anyway.

 

 

Easily done, just transfer out, to say Singapore, then back in. I'm doing that now.

 

Bangkok Bank used to offer mortgages where the funds originated in S'pore, as another poster has said though, lots of hoops to jump through.

[RBOP]

Under Bank of Thailand regulation no Thai bank can loan to Non-Thai. At least thats what SCB told me. Doesnt matter if you have WP or collateral. I tried as recent as 2009. 

Edited August 22, 2016 by RBOP

[bkk_mike]

There definitely were banks in the past that would lend you money in Singapore to buy property in Thailand. (Because there is a requirement to take the money in from abroad if you want to buy the condo in your own name - so borrowing in Thailand is a non-starter for foreigners - at least those without a Thai spouse...)

 

Bangkok Bank used to do it, but I believe they stopped. But they weren't the only one.

 

However, if she's retiring she might well run into age issues. - i.e. Most banks won't let you take out a mortgage that you won't have paid off before you're 65. If she's retiring at 55, that would be a 10 year mortgage.

 

To be honest, if she's got the income - why not just rent? (If you get crappy neighbours moving in next door when you're renting - it's a lot easier to move at the end of the contract, rather than trying to sell.)

 

 

 

[Witblitz]

1 hour ago, RBOP said:

Under Bank of Thailand regulation no Thai bank can loan to Non-Thai. At least thats what SCB told me. Doesnt matter if you have WP or collateral. I tried as recent as 2009. 

 

No...under bank of Thailand regulations, a Thai bank will not give you a mortgage on a landed property simply because its illegal to own the land, therefore they would be financing something illegal..that why they don't do it

 

There is no rule which states a Thai bank cannot loan to a non-Thai,  A WP is only part of the requirement, the other is having a credit rating in Thailand which most farang don't, hence they reason they get knocked back and earning enough money of course

 

As stated in another post, I was offered a loan on condo by SCB upto THB 12.0 million some years back, which I never pursued and their reasoning was I had a credit history in Thailand and had co-signed on a mortgage through SCB for a Thai national  

Edited August 22, 2016 by Witblitz

[Witblitz]

22 minutes ago, bkk_mike said:

There definitely were banks in the past that would lend you money in Singapore to buy property in Thailand. (Because there is a requirement to take the money in from abroad if you want to buy the condo in your own name - so borrowing in Thailand is a non-starter for foreigners - at least those without a Thai spouse...)

 

Bangkok Bank used to do it, but I believe they stopped. But they weren't the only one.

 

However, if she's retiring she might well run into age issues. - i.e. Most banks won't let you take out a mortgage that you won't have paid off before you're 65. If she's retiring at 55, that would be a 10 year mortgage.

 

To be honest, if she's got the income - why not just rent? (If you get crappy neighbours moving in next door when you're renting - it's a lot easier to move at the end of the contract, rather than trying to sell.)

 

 

 

 

My understanding is as regards the money being brought in for a condo, that is the general rule, but the "rule" actually differs for those on a WP working fully time in Thailand, and you can buy using your local salary and even get the cash out if you sell it as you can prove the money was earned and taxed in Thailand.

 

Haven't t done it personally but understand from other who have, that its viable option  

 

 

[williamgeorgeallen]

On 8/20/2016 at 8:40 PM, stupidfarang said:

Very good advice, also she could rent her German property out (have the security in Germany) and then rent a condo or a house in Thailand, if she paid £2,500 a year in rent in Thailand x 25 years equals £62,500. It is a safer option and allows her to move to any part of Thailand if she gets bored with Jomtein or if she wants to move back to Germany. I live in a brand new 3 bedroom, 3 bathroom house I rent for 8,000 per month (am in the South of Thailand).  In BKK was only paying £200 a month for a condo. 

this is more good advice on top of the previous good advice. buying property in thailand in my experience and most other peoples experiences has been a mistake. so crazy cheap to rent as well. when you want to move you can move, no waiting years to sell your property at a loss. thailand seems to be paradise but give it a few years and for many the shine wears off.

[williamgeorgeallen]

43 minutes ago, Witblitz said:

 

No...under bank of Thailand regulations, a Thai bank will not give you a mortgage on a landed property simply because its illegal to own the land, therefore they would be financing something illegal..that why they don't do it

 

There is no rule which states a Thai bank cannot loan to a non-Thai,  A WP is only part of the requirement, the other is having a credit rating in Thailand which most farang don't, hence they reason they get knocked back and earning enough money of course

 

As stated in another post, I was offered a loan on condo by SCB upto THB 12.0 million some years back, which I never pursued and their reasoning was I had a credit history in Thailand and had co-signed on a mortgage through SCB for a Thai national  

i looked into it with krung thai. they said yes as long as you have had a work permit for a number of years. can remember how many it was. can only get a 10 year loan with a 50% deposit. think the interest rate was very high as well  so i decided not to do it. end result, your friend can not get a mortgage on property she probably should not buy.

[bark]

On 21/8/2559 at 8:21 AM, Witblitz said:

Absolute rubbish, blatently obvious you have no idea how finance works in Thailand as regards collateral etc 

He is 56 years old. Even for Thai people Thai Banks believe they will retire at age 60.  Equals four years.

So they would also refuse a Thai person unless they can pay off in less then Five years.

 

[AlQaholic]

Don't buy a condo in Thailand, market is saturated. If you wanna retire just rent a nice beach house or condo on Koh Lanta.

[mcfish]

28 minutes ago, williamgeorgeallen said:

this is more good advice on top of the previous good advice. buying property in thailand in my experience and most other peoples experiences has been a mistake. so crazy cheap to rent as well. when you want to move you can move, no waiting years to sell your property at a loss. thailand seems to be paradise but give it a few years and for many the shine wears off.

Dont listen to this poster!

Without exception crazy cheap=Crazy poor!!! Nirin complex in Pattaya a rat infested farang ghetto springs to mind full of desperates...

If she wants a condo and fittings furniture  the same as she has in Germany then the condos here are not cheap let alone "crazy cheap"

[williamgeorgeallen]

9 minutes ago, mcfish said:

Dont listen to this poster!

Without exception crazy cheap=Crazy poor!!! Nirin complex in Pattaya a rat infested farang ghetto springs to mind full of desperates...

If she wants a condo and fittings furniture  the same as she has in Germany then the condos here are not cheap let alone "crazy cheap"

i rent a nice condo in pattaya for 6000thb per month fully furnished. friend of mine rents a whole house furnished for 8000/month. this is amazing value. rents have not gone up in the 9 years i have been in pattaya, in fact they seem to be going down while the values of the condos themselves seem to pretty much stay the same. (which means they are decreasing when adjusted for inflation) crazy. pattaya just seems to be getting better value as the years go by. crazy.

[mcfish]

22 minutes ago, williamgeorgeallen said:

i rent a nice condo in pattaya for 6000thb per month fully furnished. friend of mine rents a whole house furnished for 8000/month. this is amazing value. rents have not gone up in the 9 years i have been in pattaya, in fact they seem to be going down while the values of the condos themselves seem to pretty much stay the same. (which means they are decreasing when adjusted for inflation) crazy. pattaya just seems to be getting better value as the years go by. crazy.

A nice condo for $6 a day ? Sure if you believe it than thats all that matters 

Edited August 22, 2016 by mcfish

[williamgeorgeallen]

of course out opinion of nice may vary but there are many condos for rent in jomtien for 6000thb per month. do a quick search online.

[mcfish]

Im typing from Jomtien

I spend a few months a year here as a break from bangkok and Im well researched.currently at view talay for 12k and its just ok for a short stay but couldnt live in it full time.

How about you post a link since you know where they are.

Before even looking it must be on the baht bus route,obviously

Edited August 22, 2016 by mcfish

[GOLDBUGGY]

Judging from your post your friend seems like she will continue to work in Germany but yet still wants to buy a Retirement Home now in Thailand. That or she plans to Retire on a decent Retirement Income and pay off a mortgage here in this way. Not sure which or why she would want to do it this in any of these ways. Property prices don"t rise much here and like they did in Spain when that place was hot. 

 

I don't see why she can't get a loan in Germany. Most banks offer Home Equity Loans based on the amount of equity you have built up in your home. They usually offer favorable rates and the money can be used for whatever you want to use it for. So she could borrow on her house their and buy a place here, and pay back the bank in Germany. 

 

If she is over 50 years old, doesn't own a property in Germany, has no money saved, and yet wants to take out a High Ratio Mortgage to finance a property in Thailand so she can retire right away, then tell her to forget about it and save some money first. No Bank would lend her the money. 

 

Besides that it is never a good idea to come to Thailand and buy a place right away as you don't know what you are getting into or even if you want to live thee in a years time. You don't really know the area until you live their. She should rent first. The cost of a 3 M Baht Mortgage would run her over 20,000 Baht a month. For less than that she can rent the same condo for about 15,000 Baht.  It is best she go slow before buying anything here. 

[elgenon]

She has a very good income but no savings! I want to be her friend. She is obviously giving it away.

[brianj1964]

my boss tells me that alot of countries dont buy property they prefer to rent so possibly she has no assets in Germany.

[fletchsmile]

7 hours ago, Witblitz said:

.....

There is no rule which states a Thai bank cannot loan to a non-Thai,  A WP is only part of the requirement, the other is having a credit rating in Thailand which most farang don't, hence they reason they get knocked back and earning enough money of course

 

As stated in another post, I was offered a loan on condo by SCB upto THB 12.0 million some years back, which I never pursued and their reasoning was I had a credit history in Thailand and had co-signed on a mortgage through SCB for a Thai national  

 

There are plenty of legal banking rules around the purpose for which loans are extended to foreigners. There are also other rules which when combined make it impractical for most foreigners to get a loan in their own name from a bank, eg the need for funds to come from overseas.

 

e.g. If the funds need to come from overseas then by definition they don't come from a bank in Thailand. Bangkok Bank, UOB, Stan Chart,  etc all of which have done this, used their overseas branches or subsidiaries to provide the funds and the local Thai bank usually takes the mortgage charge.

 

I'd note that you didn't actually go thru with the loan, so haven't experienced where you get told something by one staff member - only to have it kicked back later at the approval stage, when it comes to the people who actually sign off on the loan. I'd also be interested in a couple of points:

 

Did you get your offer in the form of a formal contract or was it just verbal?

 

Was the "offer" in your name only or was their a Thai co-borrower?

 

Cheers

Fletch

 

 

 

 

Edited August 22, 2016 by fletchsmile

[fletchsmile]

6 hours ago, Witblitz said:

 

My understanding is as regards the money being brought in for a condo, that is the general rule, but the "rule" actually differs for those on a WP working fully time in Thailand, and you can buy using your local salary and even get the cash out if you sell it as you can prove the money was earned and taxed in Thailand.

 

Haven't t done it personally but understand from other who have, that its viable option  

 

 

 

If tallking about bank financing, then no, the rule is no different. WP and working in Thailand make no difference.

 

While working for a bank a few years back, I can confirm that a foreigner colleague who bought a condo in Thailand had to round trip his money by sending the money outside the country. He was a bank employee with a WP and good credit history. He didn't get a loan BTW just paid cash. Almost everyone else I know has had to do this too. The rare exceptions I've known are foreigners who have obtained Thai Citizenship so can count themselves Thai.

 

Cheers 

Fletch

[Witblitz]

20 minutes ago, fletchsmile said:

 

There are plenty of legal banking rules around the purpose for which loans are extended to foreigners. There are also other rules which when combined make it impractical for most foreigners, eg the need for funds to come from overseas.

 

e.g. If the funds need to come from overseas then by definition they don't come from a bank in Thailand. Bangkok Bank, UOB, Stan Chart,  etc all of which have done this, used their overseas branches or subsidiaries to provide the funds and the local Thai bank usually takes the mortgage charge.

 

I'd note that you didn't actually go thru with the loan, so haven't experienced where you get told something by one staff member - only to have it kicked back later at the approval stage, when it comes to the people who actually sign off on the loan. I'd also be interested in a couple of points:

 

Did you get your offer in the form of a formal contract or was it just verbal?

 

Was the "offer" in your name only or was their a Thai co-borrower?

 

Cheers

Fletch

 

 

 

 

 

Fletch

 

the offer was verbal, IE the girl on phone said I would/could qualify for a loan on condo  up to THB 12.0 million  on the basis of me having co-signing previously on a mortgage for a Thai national, as well as having a "good" credit score..due to previous car loans and I was a good boy and my CC was always paid in full every month and on time 

 

They indicated the offer would be in my name and didn't require Thai guarantor

 

on reflection and maybe semantics, she said "home loan" as opposed to "mortgage" and just maybe the offer was a personal loan as opposed to a true mortgage, as you know a personal loan would be shorter term and typically a higher interest rate than a typical mortgage, although they are still lending you the money the "vehicle" of how they would do it is slightly different 

 

 

[RBOP]

9 hours ago, Witblitz said:

 

No...under bank of Thailand regulations, a Thai bank will not give you a mortgage on a landed property simply because its illegal to own the land, therefore they would be financing something illegal..that why they don't do it

 

There is no rule which states a Thai bank cannot loan to a non-Thai,  A WP is only part of the requirement, the other is having a credit rating in Thailand which most farang don't, hence they reason they get knocked back and earning enough money of course

 

As stated in another post, I was offered a loan on condo by SCB upto THB 12.0 million some years back, which I never pursued and their reasoning was I had a credit history in Thailand and had co-signed on a mortgage through SCB for a Thai national  

How many years back? Rules changed drastically after the Asian financial crash. I was trying to get a loan to buy a condo in Bangkok. I only needed the remaining 20% and offered my main condo as collateral. SCB still said no "its against BoT regulation". Sure foreigners can get other types of loans but I wasn't going to put it on my credit card. I ended up getting an advance from my employer at 1.5%. Not bad eh.

[Witblitz]

1 minute ago, RBOP said:

How many years back? Rules changed drastically after the Asian financial crash. I was trying to get a loan to buy a condo in Bangkok. I only needed the remaining 20% and offered my main condo as collateral. SCB still said no "its against BoT regulation". Sure foreigners can get other types of loans but I wasn't going to put it on my credit card. I ended up getting an advance from my employer at 1.5%. Not bad eh.

 

about 6 or 7 years ago so way after the crash....