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Home » Reader question » Search for loan for house purchase in Thailand
Search for loan for house purchase in Thailand
Dear readers,
We are looking for a loan for the purchase of a house (3,5 million baht). As a foreigner, I cannot borrow money from the bank. My wife works in education (government) and cannot borrow more than 1,5 million baht from the bank (through her work), also from one other bank where we have inquired, she cannot borrow more than 1,5 million. This bank did not care that she is married to a foreigner (who works in the Netherlands) and can pay the monthly mortgage.
Of course I can help, but we want to limit this to a maximum of 0,5 million, the rest we really want as a loan. As a piece of security for myself. If we split up after 1 year, then I would have paid 12 months' rent and I would not have lost a major investment.
I am now curious if you have any tips, or have a name of a bank that will go along with this? Or how you might have solved this in a different way?
Regards,
Rinnus
Dear Rinnus, as you say yourself: if the bank does not want to grant your wife more than MB 1,5 in mortgage, and you are not sure about the matter, you should keep the option open for yourself if necessary after one year. (12 months “rent” max MB 0,5), I wouldn't look any further and look for a smaller place. After all, what are you going to do if your wife is nevertheless able to obtain MB 2 somewhere, and after a while it turns out that she cannot meet the monthly installments?
Dear Ruud,
I think you misunderstand. If my wife can only borrow 3.0 million, I would like to contribute 0.5 million to complete the purchase of the house.
Subsequently, based on a 30-year mortgage, I will pay the obligations every month.
I trust my wife and we have a good marriage, but if we separate for any reason (1 year was just an example) I will not lose a large investment, just the monthly “rent”.
Many banks have a calculator on their website, where you can calculate the maximum amount that can be borrowed. This is directly related to income. I believe that the monthly repayment should not exceed 30% of the monthly income. You indicate yourself that 2 banks are willing to lend up to 1,5 million. Just assume that this will be the case with every bank.
Another thing in Thailand is that the creditworthiness of the employer is looked at. Someone who works for a large company or for the government (including teachers) generally gets a higher mortgage from the bank.
Dear Rinnus, what is also possible is that you become a mortgage provider for the remainder. You can also register yourself as a mortgage lender at the land office. I've done this myself a few times. I just don't know what the Thai bank thinks of this if there are 2 mortgage parts, but I think it's worth investigating.
Since you have no problem paying the missing balance for real estate legally owned by your wife, there is a logical option: your wife underwrites (signs) an IOU for the balance you pay.
You have the guilty plea drawn up by a good lawyer in Thai and English. Do not mention that it concerns a real estate transaction. Please note that the money is yours from before your wedding date, not money from the marital community. When registering the real estate transaction in “the land office”, a married farrang must sign a document in which he declares that he has not paid satang/baht. Therefore, draw up a general debt claim, completely separate from the real estate transaction. The only supporting document is the transfer from a bank account in your name to a bank account in her name.
The only condition for reimbursement: the filing of a request for divorce by her or a determination of a de facto separation by the competent authority. In any other context, you are not authorized to claim reimbursement. You also stipulate that the loan (through your heirs) can no longer be reclaimed if you were to die first.
A loan purely and purely out of love from you for her ... which hopefully is and remains completely mutual 🙂
If it ever comes to a divorce, which is of course not conceivable at the moment :-), you have a chance to reclaim your (ex-) wife's debt in court. In any case, it can then use the proceeds of the sale of the property to repay you, even if it had no other source of financing (financing partner?) at that time.
Doesn't all sound very romantic. A form of checks and balances. Strong glue for an LT relationship.
Personally, I did not set up this debt claim construction. My starting point remains that the money that I have invested in Thai real estate in my wife's name will be lost in the event of a divorce. I think the lifelong usufruct in my name on the back of the chanoot is a sufficient guarantee.
We were having the same problem. In the end we bought in the following formula: an advance of 300.000 baht, then 15.000 years 840.000 baht per month. After three years, a total of 2160.000 baht has been paid to the owner and then we have to pay the remaining amount, XNUMX, in one fell swoop. We want to save part of it during those three years and we hope to be able to borrow what remains from a bank by then.
Have any of the readers followed this formula?
We have been selling houses in Thailand that we build ourselves for 11 years. So we often deal with the same thing.
the most important thing in obtaining a loan is of course collateral in goods or land (which is not widely accepted in case of a mortgage)
Most people who can get high mortgages (because that is 3,5 mill. THB), often contribute a fair amount of their own money to improve the conditions.
The banks don't do anything… Then you might as well build yourself. you get more for less. If you still have to risk your money with constructions like the ones proposed here…..Building yourself is cheaper and better.
So the only thing we can do for the buyers is as follows and actually the same as what Rob says.. The buyers pay the mortgage to us ... normally around 60 % max nowadays..
They may pay us. a cash amount, but that is often not possible because the bank already requires that and they also have to take out insurance that covers risks for the bank.
The remaining amount will then be paid off in installments within 6 years. I charge 5% interest on this.
An agreement is drawn up and collateral must be present.
Otherwise I don't know how you would borrow money other than 3% per month from the loan sharks with heavy collateral.
Bringing in your own money are the magic words. It is easier for a bank to borrow the remainder than to start…
success.
Rinnus, can you not take PL in the Netherlands?
I did that to let my wife buy land in Thailand.
Yes, of course, taking a PL in the Netherlands may be cheaper than that mortgage in Thailand, and certainly much easier, but you still need an address in the Netherlands.
A (Thai) bank will not borrow more than an applicant can handle. They do not include a marriage with a foreigner (read: Dutchman) in their considerations. How can they address this foreigner?
The same is true for Dutch banks.
So: either you buy the house with a mortgage (1,5 million) from her and add the rest (2 million) or you buy a house/apartment in her name for 1,5 million.
There are no more flavors. I (retired) financed 100% at the time. Land in her name with a loan from me and house is mine. NB. I was not married to her.
You do, so you can't give your wife a loan.
And if you are apparently already unsure about the situation after about 1 year, then I would not start at all. Let her buy a house/app of about 1,5 million or 2 million (of which 0,5 million from you, where you immediately write off this amount for yourself).
It's not quite the case that marriage doesn't count.
I work in TH, have an income (may also be from another source such as pension) am married and have lived here for years.
I also signed on 1 of the houses for the mortgage as a guarantor… otherwise things would be a bit more difficult.
How you further settle that towards your wife, or not, is up to the person herself.
Jacob, thank you for your response. May I ask which bank?
Good to hear this. In this way we also hope to get it done. I may not work in Thailand, but I do have a decent salary to guarantee this.
Well,
The Gouvernement housing bank is perhaps the 'most generous' of all banks.
But if you have already been there and they give up to 1.5 million Bhat, you can forget about all the other banks.
We had the same problem and eventually bought a smaller house of 2.1 million, hull, wind and watertight, electro and water, but nothing more. Are now reducing “something” every month. There are now tiles throughout the house and I have painted the house. One of the three “bathrooms” is also ready. Rest is coming steadily.
Same same now... GHB proposed the same to a potential buyer of ours last week... 1.8 for a house of 2.8 they were both teachers... They give very low loans these days... and next year the rules will become even stricter...
According to the book of living and buying in Thailand from 2013, there are several options such as the Bangkok Bank in Singapore, banks in Thailand such as HSBC, TMB and Tiscobank. In Singapore you can approach the UOB, which provided a 70% mortgage at the time, but at the time you had to have a minimum income of SGD 100.000 and there are of course other conditions. Good luck.
I would first rent in the area where you want to buy a house. Or buy land and have part of it built every month and do something yourself when you are there and can do something. You can forget about a full mortgage in Thailand. The option of a personal loan in the Netherlands is also a possibility.
Suc6 Ben Korat
Rinnus better, an owner-occupied home or building plot, can be taken on lease. You pay 10% down, and the rest is repaid per month! The duration of the repayment can be determined in good written consultation. The contract is legally described in your name through a Thai lawyer! (Thai and English) so that you are the only one responsible for the rental purchase period! Once the total amount has been repaid, you can transfer it to a Thai name at Landoffers or... you leave it as 'You can always sell' and you are and remain the only legal owner in this way! The contract has a built-in clause, if payment is not made for six months, the contract will expire and is therefore declared invalid! It is also possible, in good consultation, to offer the house/building plot for sale again due to divorce, so that you can receive part of your investment back! The house or building plot remains the property of the selling owner as long as the total amount has not yet been repaid, to avoid unnecessary problems! against people, with the wrong intentions! This is risk-free for both parties! and provides a nice savings pot for ownership 'in this rental purchase way' and for your objective the best and safest solution 'so as not to invest too much private money in the coming years. If your love is still intact, then you have a property together.' Isn't it working? then you, as a legally registered party, are free in your actions. And in this lawful way, she cannot steal a single penny ( Bath' ) from you!
For more information [email protected]
G'day Rinnus,
Does your wife work at a government school or a private school? Just a question out of curiosity regarding my own situation.
Regards,
Rob
At a government school.
2 years ago, the UoB was able to provide a mortgage of max 1.7 million based on my Dutch salary. They therefore do a check at the BKR. I don't know if this is still possible.
FYI: in the end we did not take out the mortgage, because we could pay everything from our own facilities.
Dear Rinnus,
I don't know where you plan to live.
There is a large law firm in Pattaya, which may discuss options with you.
The Magna Carta.
supat samunram
Supat speaks good English.
You could also send an email with this question first.
Based on the answer, to be dealt with further.
Perhaps just as interesting to tell, with two new housing projects we were able to borrow 3.3 and 4.2 million bath. But then the funding goes through the developer behind the project, I presume? Both amounts have been confirmed to us. In addition, as has already been noted 2x here, I could also sign as a guarantee.
So this is still an option for us, but our preference is now for a house of 3.5 million baht from a private individual, so we have to go to the bank ourselves.
At what interest rate? And the term is fixed. (not in all cases) the repayment is often fixed and the interest varies. What will be the final price paid at the end?
If you are married and buy a house, this house, also in Thailand, is community of property and in case of divorce you are entitled to half of the house. When you die, you even inherit the whole house, you then have a year to sell it, because as a Farang you cannot own land, so ask a lawyer and pay a little more yourself ;)
Thailand now has quite a lot of discrimination, but excluding land ownership on the basis of race (farang) is not in my opinion, but on nationality. A non-Thai is not allowed to own land, but a farang with Thai nationality has nothing to fear.
“When you die, you even inherit the whole house”
Shouldn't a usefruct contract be drawn up for this first?