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Thread: Financing Property in Thailand

  1. #1
    Foundation Member Thai Dreamer ผู้เพ้อฝัน Sydney's Avatar
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    Financing Property in Thailand

    Maybe Minder can help with this one....or anyone else who had had some experience with property purchases in Thailand ??

    Financing a Property in Thailand but repaying the loan from Australia ?

    I want to find out if JK would be able to borrow from a bank, but use her job here as the servicing criteria....so the details would look like ...

    1. Make regular monthly saving deposits for 2 years into her thai bank
    2. Then apply for a loan for a property in Bangkok - Condo or Land and House
    3. Service the loan from here in Australia
    4. Have paperwork from her boss here in Australia saying she has full time emploment ...etc etc

    Do you reckon any banks are lending for this type of loan ?

    From my limited research so far i see a couple of thai banks are now lending to foreigners to buy condo's....one has even set up a branch in Hong Kong...this 2-3 years ago was unheard of....

    So i am now wondering what the banks thoughts are on Thai expat Citizens repaying from a foreign land...at a glance you would think they would be more secure then a thai earning 15000 baht a month in thailand ??

    Any ideas ??
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  2. #2
    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน justcruzing1's Avatar
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    I don't have any experience first hand, but I would think the more likely way would be thru large international banks, like Citibank. Where they have expertise in both countries.

    I know many people have borrowed to buy investments in America since the real estate colapse there, I believe thru Citi, and a couple from Hong Kong. Of course the intrest rate here is higher than Thailand.

    A last alternative, would be simply getting a large personal loan here, 25-30k and using it .

    I will look to see what you find, it is an interesting thought.
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  3. #3
    ประเทศไทยเพื่อน Founding Member Thai Dreamer ผู้เพ้อฝัน PatongBeachBoy's Avatar
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    I think you might struggle with the likes of the big banks as the property would have to hold some value in case of default... You might have luck with a Condo in BKK!
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  4. #4
    Foundation Member Thai Dreamer ผู้เพ้อฝัน Minder's Avatar
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    Sorry Sydney, but no help for you here.

    Mrs M was not able to secure a house loan from the Thai bank (Kasikorn) as she was not employed in Thailand.

    Her sister could get the loan but not without a guarantor.

    Mrs M was acceptable as the guarantor (go figure ).

    The House and Land title is in Mrs M and her sisters name.

    As Mrs M put it - if they want to lend you the money - they will always find a way to do it.

    Enjoy.
    Life is the unexpected ...

  5. #5
    Foundation Member Thai Dreamer ผู้เพ้อฝัน Minder's Avatar
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    Secondly .... we looked at a few different places but found this company Land and House seemed the best... long established ... good business plan .... building construction quality and methods that are a credit to them.... it would certainly be my starting point (if only to benchmark quality and price against others you see)

    Foreign Buyer

    Some of the website is in English, most in Thai

    This map from the website shows their locations around BKK

    http://www.lh.co.th/search.jsp
    Last edited by Minder; 12th January 2012 at 12:13. Reason: Link to Map
    Life is the unexpected ...

  6. #6
    The artist formally known as Wabbits Thai Dreamer ผู้เพ้อฝัน wabbits's Avatar
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    Mortgage Bonds

    in Thailand




    Wanting to buy a house or villa in Thailand but need finance? Speak to our property lawyers about what your options are in Thailand with regards to obtaining a mortgage bond in Thailand. .
    Financing

    Property financing for foreigners in Thailand is possible. When we buy a property back home, one of the first things we would think of is financing. Even for those who have sufficient funding and liquidity for an acquisition, financing is often seen as a means of leveraging our investments. For buyers with less access to funding, financing is an indispensable vehicle they use to own that dream home. In this instance, Thailand is the same as any other country. Most of the financial institutions in Thailand provide loans for real estate purchases to local Thais and Thai companies based on similar criteria we are used to in our home country. However, the similarities do end there for most foreigners buying property in Thailand.
    .
    Foreigners generally cannot mortgage properties in Thailand. In fact, mortgage lending by local banks to foreigners was virtually unheard of in Thailand. Nonetheless, in recent years we have seen a slight shift in policies to allow foreigners limited access to financing. This was instigated, in part, by the Thai government’s eagerness to promote tourism and to encourage economic growth in Thailand. This was introduced during the high growth period of the past five years leading to Thailand’s current climate which can now be best described as moribund.
    .
    Despite this, the momentum gained from the past few years has meant that some Thai banks do offer financing services to foreigners but impose rather strict terms and conditions on their availability. The most important condition is that the property has to be held in the foreigner’s own name and the property has to be registered as a condominium under the Condominium Act since foreigners are restricted to purchasing only these types of properties in Thailand.
    .
    Local Lending in Thailand

    .
    Terms of offer for loans in Thailand are dependent on the policies of the Bank of Thailand for each fiscal term. This is also dependent largely on each bank’s own business strategies which also vary year by year. Banks in Thailand normally provide personal loans to individuals and this includes credit card facilities, business loans, personal loans for education or medical treatment as well as personal loans for general use such as the purchase of a condominium, renovations, car purchases and so on. These facilities are, subject to each bank’s individual policy, available to foreigners who have lived and worked in Thailand for a number of years.
    .
    In order to obtain these personal loans for the purchase of a condominium, certain conditions must be met. First of all, it is important to note that these loans are generally granted on the fair market value of the property and this is usually based on the bank’s own valuation process.
    .
    The other important criterion is the qualification of the foreigner. These are set out below in the following:
    .t least a 1 year work permit or a Thai resident permit.
    - A letter of employment indicating their years of service in Thailand and their annual salary.
    - Pay slips will usually be attached to this as well.
    - The banks may also request for the employer’s company documents
    - The banks would also conduct credit checks on the foreigner
    - The applicant’s age combined with the loan period must not exceed 60 years.
    - Applicants must have a stable and secure job.
    - Applicants must have a fixed income three times higher than each installment repayment.
    - The aggregate amortization of loan must exceed 7 years (for some banks).
    .
    The applicant may also be required to submit the following documents to the bank upon application.
    .
    - Copies of passport including visa page, ID card or government official ID card
    - Marriage certificate of the applicant and spouse (if applicable).
    - Confirmation of income or salary, and copies of bank statements
    - Copies of land or unit title deeds, sale and purchase contracts
    .

    The interest rates for these types of loan are typically based on the MLR or on a fixed interest rate depending on the bank offer at the time. It is also helpful to note that because these loans are offered locally, the interest rates are usually a bit more competitive and it does pay to shop around first.

    International Home Loan Schemes for Thailand

    Around the middle of 2005, Thailand saw the emergence of a new financing service offered by Bangkok Bank’s Singapore branch. At this time we saw Bangkok Bank starting to offer offshore financing for foreigners wishing to purchase real estate in Thailand. Up to 70% of the property’s value was made available to foreigners who did not qualify for a local loan. This gave many foreigners access to finance for their dream homes even if they did not reside in Thailand. Up until this time, there were only a handful of private offshore firms offering lines of credit of this kind and often at rather stringent and unattractive terms.
    .
    Bangkok Bank in Singapore still offers such loans to foreigners and the demand for this is increasing. They are able to tender loans in several currencies including US and Singapore Dollars. Currently, the interest rate for USD loan consists of the prime plus 0.5% which in total stands at 8.75%. A processing fee will also be incurred upon application. Bangkok Bank does insist on meeting the applicants in person and this means you would usually have to travel to Singapore to apply for this.
    .
    Bangkok Bank was the first bank in Singapore to offer such financing services. However, this year we saw the introduction of United Overseas Bank (UOB) in Singapore jumping on the band wagon and offering similar lending services to foreigners wishing to purchase real estate in Thailand. It is a relatively new scheme for UOB and it was introduced largely as an alternative to Bangkok Bank’s hold on this lucrative market. It is a good thing that we are starting to see some competition in this area and in the future this will hopefully create an environment that would improve the consumer’s position with various banks trying to outdo each other with more competitive rates. At the moment, the terms for a UOB international loan is still very similar to Bangkok Bank with their interest rate currently also at 8.75%. However, it appears their processing fee may be slightly higher but offers the advantage of applying for the loan locally in Thailand without having to set foot in Singapore. UOB’s entrance into this niche market is a welcoming sign to the area of financing to foreigners in Thailand.
    .
    Criteria for a Mortgage
    .
    Mortgages are governed under section 702 of the Thailand Civil and Commercial Code. In this section, there are certain rules which must be adhered to in order to qualify for protection under Thai law. These include the following:
    .
    1. The mortgager must have the right of ownership of the property.
    2. The mortgage contract must be in writing and must be registered
    3. The parties must register the mortgage to the authorized Officer for the following cases:
    .
    a. Land with Title Deed has to be registered at the Land Department or Bangkok Metropolis Land Office (Branch) or Provincial Land Office or Provincial Land Office (Branch) where the land being mortgaged is located.
    b. Land with no Title Deed such as Nor. Sor. 3,has to be registered at the District Office where the land being mortgaged is located.
    .
    List of Banks in Thailand
    .
    Below is a list of several banks in Thailand along with their various policies and criteria on servicing loans to foreigners.
    No.
    Name
    Terms and Conditions for Qualification of Loan
    1.
    Bangkok Bank PCL.
    Bangkok Bank in Thailand itself does not provide loans for foreigners under any circumstances. Only Bangkok Bank in Singapore provides this service to foreigners.
    2.
    Bank of Ayudhaya PCL.
    Bank of Ayudhaya does not offer loans to foreigners at this present moment.
    3.
    HSBC


    HSBC does provide loans to foreigners under the following conditions:
    • Residence Permit, 1 year work permit, letter of employment, company’s documents or other pertinent documents upon request.

    • Bank will grant loans for foreigners based on the current market value:


      • Condominium 70% of the value and Land and House up to 80% of the value.
      • An amortization period of 7 years.
    4.
    Kasikorn Bank
    Kasikorn Bank does not offer loans to foreigners at this present moment.
    5.
    Siam Commercial Bank PCL. (SCB)


    Provides loans for foreigners under the following conditions:
    • 1 year work permit, consideration based on rate of salary, background check for the employment and credit rating.

    • The foreigner can receive a loan for a condominium or house.

    • A joint loan can only be obtained between blood relations.

    • Amortization period of between 5-7 years.
    For personal loans, SCB only grants credit cards, but not for personal business loans.6.
    Thai Military Bank PCL. (TMB)


    Provides loans for foreigners (only condominiums) under the following conditions:
    • 2 year work permit or 2 years residence permit, passport, letter of the employment, payment slip and other supporting documents requested.

    • If the foreigner has some added security finance, this will be an added appendage for the banks to consider.

    • If the loan is for landed property, a foreigner will only be able to obtain a loan if they apply jointly with a Thai spouse.
    7.
    UOB Public Company Limited


    UOB in Thailand provides loans for foreigners under the following conditions:
    • A loan for landed property can be obtained by a foreigner if it is applied jointly with a Thai spouse.
    UOB has launched the new International Home Loan Scheme for Thailand to allow foreigners access to financing when they wish to buy condominiums in Thailand. This is a joint financing program between UOB in Thailand and UOB in Singapore. Loans will be obtained in UOB in Singapore and secured by SBLC which will then be issued by UOB in Thailand which will in turn register the mortgage locally.
    UOB in Thailand suggests that the entire application procedure can be done within Thailand without the applicant going to Singapore.
    9.
    Tisco Bank


    Provides loans for foreigners for condominium under the following conditions:
    • 1 years work permit.

    • Tisco will grant loans for foreigners based on the market value of the property: offers lending for condominiums for up to 70% of its value.

    • Foreigners can borrow a maximum of 5 million Baht and not less than 700,000 Baht.

    • Amortization rate of 10 years.
    10.
    Standard Charter Bank (Thai) Public Company Limited
    Standard Chartered does not offer loans to foreigners at this present moment.

    .
    The information in this table is deemed to be accurate at the publication of this article. We do not accept liability for any loss or damage claimed to be caused by the information provided in this table.
    .
    It would appear then that financing is gradually becoming more accessible to foreigners in recent years. It remains true that financing for foreigners is no still easy task and is highly dependent on your individual needs and circumstances. Financing terms are still not what we are used to back home and it is certainly not for everyone. Before applying for either a local loan in Thailand or an international off-shore loan from either Bangkok Bank or UOB it is wise to assess the markets first and consult with a reputable financial adviser or lawyer.

    Siam Legal Mortgage Bonds in Thailand for Foreigners | Villa : Condo in Thailand
    .

  7. #7
    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน Spot's Avatar
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    Excellent Wabbs can you translate it into Thai for S, she is like a dog with a bone over the cheap house with land in Isaan, I am definitely behind her on it, but am afraid she might get a Mafia Loan or use some of the cheap???? Loans from Thai Banks, mafia controlled who only let you get so far then default you and take the house and land.

    Thai's and expats are waking up to this, but to a dirt poor Isaan farmer, initially cheap money seems to good to refuse. Notice all the new utes getting around in Isaan? The majority are on borrowed time and the mafia run banks are capitalising on it big time. most of my Thai friends in Aus are financing through micro loans family interest back home, family commitment and maybe no higher than %5 fixed.

    Andrew Hicks touches on this in detail in his book my TG and me. He is also on this forum..

    Thai Girl

    Cheerio
    Ohhhh, Pigsy! You call yourself a demon? จูบก้นของฉัน Everything I post here is IMHO and IME... I am no expert....

  8. #8
    ประเทศไทยเพื่อน Founding Member Thai Dreamer ผู้เพ้อฝัน jontymate's Avatar
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    Quote Originally Posted by Spot View Post
    Excellent Wabbs can you translate it into Thai for S, she is like a dog with a bone over the cheap house with land in Isaan, I am definitely behind her on it, but am afraid she might get a Mafia Loan or use some of the cheap???? Loans from Thai Banks, mafia controlled who only let you get so far then default you and take the house and land.

    Thai's and expats are waking up to this, but to a dirt poor Isaan farmer, initially cheap money seems to good to refuse. Notice all the new utes getting around in Isaan? The majority are on borrowed time and the mafia run banks are capitalising on it big time. most of my Thai friends in Aus are financing through micro loans family interest back home, family commitment and maybe no higher than %5 fixed.

    Andrew Hicks touches on this in detail in his book my TG and me. He is also on this forum..

    Thai Girl

    Cheerio
    Spot on errr *Cha Ching*spot about financing to people that cannot possible repay.
    Especially when they cannot even read the contract.

    The bold bit can you explain more how that works?
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  9. #9
    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน Spot's Avatar
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    Quote Originally Posted by jontymate View Post
    Spot on errr *Cha Ching*spot about financing to people that cannot possible repay.
    Especially when they cannot even read the contract.

    The bold bit can you explain more how that works?
    actually i would be better for with my mates who are doing it explaining.

    Basically, Locals with Thai wife and Aus husband working. Kids no longer dependant...

    Yes putting money aisde but bank it here or help out family, Either buy iron buffalo outright or loan money to family (micro loan) at most times not even any percentage. Family will not default, face et al.

    Whoa Stop! get minder to assure me you are not with the ATO! What I am describing is a win win but Is it legal i have no idea.
    Ohhhh, Pigsy! You call yourself a demon? จูบก้นของฉัน Everything I post here is IMHO and IME... I am no expert....

  10. #10
    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน Spot's Avatar
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    How do I turn off auto suggest? I work professionally on a desk top with mouse. I am now on my new extra fangeld laptop, and my fingers are finding it hard to adjust so i just type away and post. I have just re read my last post and I sound like an Idjit....
    Ohhhh, Pigsy! You call yourself a demon? จูบก้นของฉัน Everything I post here is IMHO and IME... I am no expert....

  11. #11
    Foundation Member Thai Dreamer ผู้เพ้อฝัน G4orce's Avatar
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    Very interesting topic. I was talking to Noy just yesterday about loans in Thailand and could not get any answers i was looking for as she did not know the answers. I would have thought it would be better to borrow the money here (maybe against your own home) and then just buy over there if you were planning on paying it from Aust.

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