Mortgage for Thai national - usual availability

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Mortgage for Thai national - usual availability

Postby ExpatIslander » Wed Oct 27, 2010 2:57 pm

Hi,

Can anyone tell me whether it's possible for a Thai national to get a mortgage for purchase of house and land in Bangkok on basis it will be rented (and thus provide sufficient income to pay mortgage)?

Or are mortgages for say 60% or more available without a strong income criteria? This is the case in Germany for example. If you can stump up 40% cash they will loan the other 60% with little further qualification criteria. Of course if you don't pay on the loan you will lose some of your 40% cash and the house.

Or in general what is the income criteria to get a loan?

Thai concerned has a rather new job paying only 15k/month, will probably increase a fair bit over 1-2 years and the house I noticed was 3.5M. Could create two small rental spaces and a much nicer space for us to live than I would get for 15-20k/month elsewhere. I can easily pay the 15k to my partner plus other rentals means the mortgage interest is met and mortgage would be repaid over some years. Much better deal then and I would be happy that my partner ends up owning - I have several houses already in Europe and don't need another.

I could buy for cash except a foreigner can't own land and am reluctant to be involved in any of the "get around"s. I am a firm believer in not bringing to the Kingdom more than you are happy to walk away from singing.
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Re: Mortgage for Thai national - usual availability

Postby Roger Ramjet » Wed Oct 27, 2010 4:16 pm

ExpatIslander,
If you went to Siam Commercial Bank I doubt they would loan your partner anywhere near 3.5 million on a 15,000 baht a month salary. Your partner would need to earn over three times that amount.
The monthly repayments alone would be over 25,000 baht.
The loan rate works out at about 7,000 + baht a month, depending on how long the loan runs for and how much deposit you put down.
You cannot pay your partner a monthly salary, the banks won't allow you to be the guarantor if you do.
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Re: Mortgage for Thai national - usual availability

Postby ExpatIslander » Wed Oct 27, 2010 6:47 pm

I have no intention of paying my partner a salary or creating any sort of scheme.

I know in Germany this works, I suspect in Thailand not. Basically the bank (in Germany) don't care how you repay them, they just know that if you don't pay they only lent 60% and can sell to recover their money so other income is not relevant. It's usual for a commercial (rented residential) loan rather than an own-home.

I was intending paying 15k/month rent on part of a building bought with a mortgage. The other two floors would let for 15k making a profit of 5k/month if the total loan payment was 25k. I assume the 25k includes some repayment.

My question here also was assuming I did not act as a guarantor. That seems like a very bad deal, I take all the risk but we pay the high finance charges as well. Of course I am not allowed to supply the money. Maybe I need to look into that though, elsewhere I read of someone handing the keys back on a condo and he thinks at least it's a non-recourse loan so all he lost was his deposit despite wife having other Thai property.

The more I think about this, it won't happen. Or only if I am prepared to throw the full 4M at it knowing it's not allowed, which I'm not.

Shame - converting two floors and rooftop of a grungy house to make a home for the next few years just appealed. Have you seen the crappy shoebox concrete holes that 4M buys in new condos anywhere close to MRT-BTS? They really are closets with attached bathrooms.
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Re: Mortgage for Thai national - usual availability

Postby Roger Ramjet » Thu Oct 28, 2010 6:59 am

ExpatIslander,
If you think Siam Commercial Bank is bad, and I consider them to be the easiest bank to deal with, avoid Bangkok Bank like the plague. If a foreigner is involved their interest rate goes up by 2% points straight away on top of the mean lending rate + 2%, so you will end up paying nearly 9% or more, but they're really good with the hype.
Another reasonable bank to deal with is Bank of Ayuthia.
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