CONDO MORTGAGES FOR FOREIGNERS

BUYING A CONDO IN THAILAND:

Banks will not let foreigners buy a condo via mortage unless you are the holder of a factory

but the Bangkok Bank does lend to foreigners to buy condos if you meet the criteria

 

     Singaporeans & foreigners can now buy condominiums in Thailand under a new service offered by Bangkok Bank in both Bangkok and Sinsapore. The bank's Singapore branch has begun offering offshore financing for foreigners seeking to purchase condominiums in Thailand. Loans of up to 70% of a condominium's value were available to foreigners both in Thailand and other countries who want to buy this type of property. Applicants can e-mail their details or send them by DHL to the bank's Singapore branch, he said. The applicant's earning ability determines how much he or she can borrow. For example a person seeking a loan to buy a condominium worth 20 million baht should be earning around 300,000 baht a month, Mr Torphong said. While foreign nationals are allowed to purchase condominiums in Thailand, financing has often been problematic, with local financial institutions reluctant to offer loans due to uncertainties regarding credit risk. ''Well over half of the inquiries we receive ask for lending or mortgagee finance and up until now there wasn't anything available, except a number of private firms offshore offering lines of credit or personal loan financing,'' he said. ''I am sure buyers will feel much more relaxed dealing with such a credible name as the Bangkok Bank, than an Isle of Man-registered company offering unattractive financing terms.''
Bearing in mind that the bank's terms apply to freehold condominium title.
       Under Thai Law, foreigners can own freehold title up to 49% of a condominium project. Generally speaking, when a condo project is launched, sales are always brisk, because foreigners want to hold their units as freehold. If the unit is in the remaining 51% allocation, foreign buyers can either lease or set up a Thai Company and hold freehold through that company. This is the start of more widely available mortgage financing for foreigners in Thailand.
''I suspect that other Thai banks will shortly start offering similar terms and conditions. All of this of course will result in a competitive environment bettering the consumer, whereby the banks will try to outdo one another with more favourable terms, similar to Australia and the UK.'' Thai property market had a good future because investors viewed the rental yields of 5-6% as attractive.
''Singaporeans are interested in Thai property because it is three times cheaper than what is available in their own country,'' he said.
--Bangkok Post 2005-06-22

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Here is a simple rule immaterial of the interest rates: When you borrow 1m baht heres what you will pay back: you double the borrowed sum which is now 2m baht and halve it again ie 50% of the loan which now = 2.5m baht you will pay back over the loan term. This is a safe rule of thumb as you must look at interest rate rises, changes in your income, lifestyle, additions to the home, utility and cost of living rises, inflation, holidays, car repairs, school fees, etc. Its now a lot of money to pay back and now can you service this loan in 5 yars time??? Think about it. It so easy to borrow and once you get your loan you are on a high but 30 years is a long time to wait --- in fact a lifetime of paying back money into a hole ---- can or will you be able to do it; what happens if you have an accident or injury or your life changes or your circumstances mean you cannot keep up --- "Once your mortgage goes up, for the first couple of months you might manage, but then you start getting behind," or you want to buy a new car or find out you have used your credit card too many times. This is when you start to stress as you have budgeted from the start using your income to pay back when suddenly these changes in your life occur to manage repayments. Do not listen to sales pitches from Realty staff as they are only interested in their commission, not your ability to repay your loan. Only buy if you need to buy and have the spare cash for that rainy day --it may just pay off. Do not buy because you feel its a good deal and you think in 20 years time you will have a bargain as it will not match your repayments; let alone the 3:1% ratio of income against loan repayment. Today its no where near this ratio so watch out. Better to only have what you need but who are we to say whose right.

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