Immigrants usually can not acquire a home mortgage from regional Thai banks to finance the purchase of their Thailand property investment. The majority of the banks in Thailand offer loans genuine estate purchases to Thais and Thai Business.
In the last few years Bangkok Bank (Singapore) has had a loan program for foreigners with qualification being really similar to that in the west. You complete an application, send proof of income, income tax return and other paperwork. With this program, buyers can fund approximately 70% of the purchase cost of the house. The problem with this program is that it has not been consistently used, and since this writing the program has been suspended.
In some resort areas such as Pattaya, regional banks have started to create loan programs for immigrants who live and work in Thailand. Kasikorn Bank, for instance, enables immigrants who have a work authorization for 2 or more years to acquire mortgage funding for up to 50% of the value of the subject property. This program was simply released early 2010.
With the present international monetary situation you are best to explore your choices directly with Kasikorn Bank, Bangkok Bank (Singapore) and other lending institutions to determine the existing status of any loan programs which may be available for foreigners.
If you can not get a Thailand mortgage to buy your dream residential or commercial property in Thailand, don’t worry. A number of alternatives are offered to you.
Designer funding has actually ended up being more prevalent in Thailand over the past 2 years. Offers varying from 2-year to 10-year funding are available to buyers of brand-new Thailand homes and condominiums. These financing offers are available directly from the designers. As a result, the structure of each deal differs.
An example of such a program is The Meadows, a housing project in Pattaya. The developer provides 50% 3-year funding at 8% per annum. Although the loan term for this and other programs is not as long as standard mortgages in the US and Europe, such programs are useful.
Be leery of deals for “free funding” or “0% interest”. Certainly the purchase price under these scenarios has actually been inflated to cover the expense of capital to the designer. It’s best to negotiate the very best possible purchase rate then work out the financing deal different from the cost. Ensure you have a clear sign of the market and market value before consenting to a funding arrangement.
Individual homeowner have just recently ended up being more open up to extending financing to buyers of Thailand houses and condos as a means to stimulate interest in their resale residential or commercial property. Under such an arrangement, the buyer and seller sign both a purchase and sale arrangement and a promissory note.
If you are dealing with a realty agent, let them understand you need funding. They will likely have some inventory of properties where sellers are extending payment terms. If you are working out straight with the seller, merely ask them if they are willing to accept payment terms for a specified period and rate of interest.
Similar to designer financing, work out the purchase rate different from the terms and conditions of the loan. Crucial to note is that the seller will continue to hold the title deed (Chanote) to the residential or commercial property until the loan payment is made completely. Ensure your lawyer reviews your offer and guarantees that all files are updated and correctly secured to protect your financial investment.
There are generally two other choices offered to foreigners to finance their Thailand home or condo purchase. Historically, lots of foreign buyers had taken a mortgage versus their residential or commercial property in their home countries. This is harder than ever offered the recession, yet still an option for some. Again, contact your local bank to identify what programs are readily available to you.
In some circumstances, the Thai partner of a foreign nationwide may get approved for a home loan. In such event, the sale and purchase arrangement (and promissory note) would be carried out by the Thai partner. If the foreign nationwide is funding a considerable portion of the expense, the foreign nationwide ought to sign up a long-term lease in his/her own name (with the Thai partner as the “lessor” and the foreign nationwide as the “lessee”). Seek advice from your lawyer to lessen the tax ramifications of such a financial investment structure.
You may also use a lease structure to make your preferred home inexpensive. Available structures consist of lease with the option to purchase and long-term leases. Any lease for a term of more than three years can be registered on the title deed at the land office, thereby creating a home right in addition to a contractual right to occupy your house or condo. A lot of local Thai attorneys can manage this deal on your behalf for a small cost.
So don’t worry if you can not get a Thailand home loan for the purchase of your house. There are alternatives readily available to you. Deal with a real estate professional to help find the very best home and funding structure for you.
Michael Barricelli has actually been traveling to and living and working in Thailand for over 10 years. He founded and opened a property business, Land of Smiles Residential Or Commercial Property, in the resort city of Pattaya in 2005. His business has helped numerous expats purchase or rent condos, houses, rental properties and land in Pattaya and Bangkok.
Prior to transferring to Thailand, Michael lived and worked in the Boston area as a successful company executive with over twenty years of financial management and management consulting experience. Functions consisted of Financial Controller at Harvard University, CFO/Director of Finance for a number of Boston-area health centers, and Consulting Supervisor for a “Big 3” seeking advice from firm.