Thailand is a top destination for tourists who are seeking for investing and a lifestyle property in Asia. The country began to develop real estate from way back, now, there is a limited factor for loan options present. There are a number of international banks and other loan giving body to seek a mortgage loan in Bangkok. Prior to buying, it is essential to gain a fundamental understanding of the loan process and the proper documents that the banks will ask for. This article discusses on the basics to get at hand during applying for a property loan in Thailand.
The Basic on Applying for a Mortgage in Thailand
Before, Thailand is known for home buyers that purchases thru cash, savings and direct arrangement with sellers. Now, the buying search has become more modernized. A lot of Bangkok residents choose the same style of mortgages that are seen in the Western world.
Below are a few factors to consider when deciding to buy a home in Thailand:
Criteria for A Mortgage
Mortgages are stated at section 702 of the Thailand Civil and Commercial Code. Along with this are particular rules which must be followed in order to have protection in the Thailand law. Additionally, there are factors to consider:
- The mortgager must gain the right of ownership of the house.
- The mortgage contract should be done in in writing and registered
- The buying parties should register the mortgage to the authorized Officer in situations like:
Land with Title Deed – has to be submitted as a requirement to the Land Department or Bangkok Metropolis Land Office (Branch) or Provincial Land Office or Provincial Land Office (Branch) where the property being mortgaged is found.
Land Which Bears No Title Deed Like the Nor. Sor. 3 – has to be submitted as a requirement the District Office where the property being mortgaged is found.
The Age Criteria
A condition that Thailand banks asked on mortgages is that a lender can’t proceed with a home loan at the age of 60. The Thailand banks think that people older than 60 is not able to have an income to pay for a big mortgage. This make it a reason for mortgages that has to be paid off by the time the borrowers celebrate his or her 60th birthday.
Also, there are other countries, where people may be permitted to work or gain a Social Security or pension that adds a lot income. On the other hand, in Thailand, the social security payments are small in amount, which is not enough to pay for the mortgages.
Hence, even if continually provided in 10, 20 and 30 year periods, age is important when thinking of the repayment period the buyer is entitled.
For 20 or 30 years old, buyers are given a repayment period. For those who are 40 years old, the buyer is allowed to pick a mortgage with up to a 20-year repayment period. For those who are 50 years old, the buyer is entitled to a 10-year repayment option.
Terms and Conditions
There are other terms and conditions to think of prior to having a mortgage. It is called for to compute for the amount of a down payment the buyer can afford and what rate is needed to be financed. A lot of Thailand mortgage companies will expect a 30-40% down payment and the buyer will borrow 60-70% of the home’s value.
Tourists and Mortgages
Before, it was very hard to gain a mortgage in Thailand by tourists. This was revolutionized during the previous fifteen years. These days, a lot of banks see loans for tourists to be beneficial for economy and profit wise.
It is difficult to acquire a mortgage by the tourists, but is not impossible. For example, it’s a bit harder than a company registration in Thailand, but quicker for litigation in Thailand.
A number of Thailand banks allow mortgage options for tourists like what Singaporean banks do. There are also private mortgaging companies that lend to tourists like the MBK Group.