Are foreigners licensed for real estate financing in Thailand? Can foreigners borrow money in Thailand to buy a villa or apartment?
Looking for a villa, apartment or other property in Thailand? And do you need financing? Then read this report with everything you need to know about real estate financing for foreigners in Smile Land.
Real estate financing available to foreigners in Thailand is nowadays possible. But in the past, foreigners have generally been unable to obtain mortgages from local Thai banks to finance their dwellings in their dreams or their beach basin, as the majority of Thai financial institutions only financed the purchase of real estate by Thai citizens and Thai companies.
But things changed in 2005 after seeing Bangkok Bank PLC, which lent foreigners loans in their Singapore branch, and again in 2008, when Bangkok Bank witnessed, finally issued foreign loans through Thailand , mainly at its headquarters, basically as we see in our country.
In the past, mortgage lending to non-Thai citizens by domestic banks in Thailand was only extraordinary, but in fact, I have experienced a significant adjustment for foreigners' limited access to finance policies.
Initially, this was triggered by the enthusiasm of the Thai government to increase tourism and encourage economic development in Thailand.
When we want to buy a property in our country, one of the most important things to consider is financing.
Regardless of whether you have the appropriate funding and liquidity to buy, financing is largely seen as a way to smooth your investment.
For people with less access to finance, funding is a very important tool for using their home of dreams.
In this case, Thailand is no different from other countries, as most Thai banks (but not all) provide credit for the purchase of real estate for Thai and Thai companies, primarily on the basis of similar criteria. our home.
But for foreigners, the similarities end here when buying property in Thailand!
Some Thai banks provide mortgage services to foreigners, but impose strict conditions on foreigners to be eligible.
One of the general conditions is that the owner of the property is the foreign owner in his own name and that the property must be registered according to the law on the condominium because foreigners are not entitled to another type of property. properties in Thailand.
The buyer has to pay a reminder of at least 30%, depending on the age of the borrower, financed by 20% funding over 3 to 20 years.
You can borrow money at the bank only if you are under 65 – and the mortgage must be fully repaid when you are 65 years old. So if you say we are 55 years old then you can borrow money for 10 years.
Bangkok Bank PLC was the first financial institution in Singapore to provide this type of financing services to foreigners. But in 2011, I saw my first real estate agent who visited the United States Overseas Bank (UOB) in Singapore and offered loans to my client to buy his dream home in Phuket.
And hey … interest is not so bad: 5.25% per year if the loan is in USD. If the interest in SGD is 7% (better on their website).
However, a number of other Thai financial institutions, including Siam Commercial Bank, Kasikorn Bank and Tisco Bank, have stepped on board and have recently discovered that they can borrow money as "The World Bank" as foreigners HSBC. This is great news for "farangs" in Thailand, right?
I also note that HSBC offers mortgages on all types of real estate in Thailand, and not just limited to condominiums, but I think this happens on a case-by-case basis and whether foreigners marry a Thai citizen. In this case, I can imagine that his foreign and Thai wife will share the loan and their assets between them; the Thai wife / husband owns the land and the foreigners own the land.
I find this solution much better and safer for foreigners than a 30-year lease on the ground, because when it expires, it will no longer be the owner of the land; this property will be the real owner of the land.
If the Thai wife / husband dies, then the bank will surely be sure the foreigner will not lose his house because the bank wants to ensure that foreigners continue to pay the monthly mortgage details.
I think it is a very good thing that we are now seeing some (hopefully fierce) competition in this area and in the future this will probably improve the situation of foreigners in Thailand when several banks try to outperform competitive prices. I welcome the open arms of UOB and HSBC, and hopefully this is the beginning of a new era for foreign funding in Thailand.
L Conditions of Expiry of Foreigners in Thailand
The terms and conditions of loans granted in Thailand depend on the policy of Thai Bank for each financial year. Policies can change from year to year, so you can act faster if you don't miss the ship! The conditions that depend heavily on the policies of each bank, which are similar to Thai Bank Bank, vary from year to year.
These credit lines cover all banking policies for people living and working in Thailand.
In order to use these personal loans to purchase a residence, certain conditions have to be met and is very important to notice that these loans are typically on the real market for the value of the apartment. and it is always based on the bank's own assessment This is often surprised by foreigners because the bank's rating is often (not always!) lower than the market value!
Here's an example:
– The seller buys the apartment at a price of THB 5 million.
– You know that only max. 70% of the price will cost you THB 1.5 million and the bank will give you THB 3.5 million and interest.
But now the value of the bank is only 3.5 million THB. – That is, they offer THB 2.45 million.
– It costs 2.55 million THB, which he was originally entitled to pay.
The second crucial criterion is the qualification of foreigners. These are started as follows:
– One-year work permit or Thai residence permit.
– Unemployment letter confirming work in Thailand and annual salary.
– Generally, you need to provide quantified payment cards.
– The bank may request the employer's company documents.
– The bank usually performs a credit rating.
– Your age with the credit term should not exceed 65 years. (If you say you are 55 years old, the loan period is 10 years.)
– Ensure stable and secure work.
– Your monthly income is three months higher than every monthly installation.
When submitting the application, you must also provide the following documents to the bank:
– Copies of the passport and / or official card.
– Marriage Certificate (if any).
– Confirmation of revenue and copies of bank statements.
– Earth or Unit Address, Sales and Purchase Contracts Copies.
When applying for a loan, I suggest you buy and not accept the first offer, as interest rates change from bank to bank … so go for the best deal!
If you're not eligible for a mortgage right away, you can use a rental structure to make your dream properties more affordable. So far, a rental option with a purchase option is the best way to go. Just note that a lease for more than 3 years must be registered with the Land Registry in the title letter. Most Thai lawyers can manage this transaction on your behalf at low cost. But I suggest that your Thai wife (if any) should take care of it because it is not really complicated.
Leasing for purchase has some advantages:
1. Monthly rent for example for 1 year and then buy the property and the money spent on the lease can now be deducted from the advance on the basis of a contract with the owner of the property.
2. This gives you 1 year to find out if this property and location are right for you. If not, just walk and rent a new home in another place.
If you can't buy a mortgage to buy your dream property in Thailand, don't worry. There are other options available.
Direct developer financing in Thailand has become more common in recent years.
Developer offers are usually 2-10 years of funding and are available to buyers of new Thai villas and condominiums. These financing transactions are ready for developers. This, of course, means that the structure of each financing transaction changes from one developer to another.
So make sure you examine all the options on the market before you start something.
Be aware of "too good to be true" as "zero interest" or "100% free finance". Of course, under such conditions, the purchase price is inflated to compensate for the developer's costs.
It is always better to negotiate the most favorable purchase price than negotiate financing and not deal with the real price of the property .
Ensure that you know exactly what is happening in the real estate market and do everything in your power to examine the market prices of this type of property before engaging in a financing agreement.
From the owner / seller
Some real estate owners are currently financing buyers of villas, bungalows and condominiums in Thailand to increase their interest in property in Thailand. The buyer and the owner / seller will then sign both the purchase agreement and the sales agreement and the bond.
Ensure that the seller is actually the property owner . Ask for a copy of the address and check it carefully with the help of your Thai wife or partner. The Land Registry can also tell you whether this property is actually a mortgage or not.
Probably, if the seller is unable to provide you with a real address, the property is a mortgage and the address is held at the bank or the money lender as a guarantee for monthly payments.
If you are looking for a real estate agent to help you find your dream villa, let them know that you need financing. They will probably have some lists where sellers offer payment terms.
If you negotiate directly with the seller, you simply ask whether you are willing to accept payment terms for a specified period of time and interest rate. As with developer financing, you must negotiate the sale price separately from the terms of the loan.
It is very important to note that the seller retains ownership (Chanote) until final payment.
Ensure that your lawyer reviews the transaction and ensures that all documents are up-to-date and properly saved to protect your investment.
Here you will find a list of banks that can be funded as foreigners when buying a Thai apartment:
1. Bangkok Bank
2. Kasikorn Bank
3. Siam Commercial Bank (SCB)
4. Thai Military Bank (TMB)
5. Tisco Bank
both in Thailand and Singapore
7th US Overseas Bank (UOB) – both in Thailand and Singapore
Best of luck to find and buy your new dream house in Thailand.
Source by Kristian Olsen