Mortgages for Foreigners in Thailand
Wanting to buy a condo, house or villa in Thailand but need finance?
Property financing for foreigners in Thailand is possible. 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 However, the similarities do end there for most foreigners buying property in Thailand.
Foreigners mortgage properties in Thailand. 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:
-At 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.
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