Property and land financing in Thailand

[newtotown]

Does anyone have any experience with land and property financing?

I would like to purchase land where I can build a house and business premises. I would much prefer paying off a mortgage than rent any day.

Is house and land financing available to foreigners? And if so is it possible to take out a mortgage on land and a house that hasn't been built yet?

Has anyone been through this process before?

Any information would be appreciated.

[BobHelm]

What you want to do is technically possible.
However it is, in the real world, filled with so many ifs, buts, maybes & drawbacks that, to be honest I doubt if it is practical.
Firstly only Thai nationals can own land. So you cannot as an individual.
It is possible via a registered business. However this has been used as a 'loophole' for a number of years & so new businesses are pretty carefully scrutinised to ensure that they are a genuine business & not just a shell with the purposes of evading the law.
As a business you will not allowed to be a majority shareholder. You are limited to owning 49% of the business & must have active Thai partners who own the other 51%.
Banks are pretty dubious about loaning to a business with no track record as the chances of them losing their investment is pretty high.
As an individual you can only lease land. I think it is extremely difficult to find a bank who would be willing to risk a mortgage on the surety of a lease that expires if you do.
If, however, you are married to a Thai national then the situation is a little easier. She can own the land & I guess as a couple you could obtain a mortgage covering both the land & property. I would guess that the bank would release funds in stages during the development, although I am guessing on that point.
The other major hurdle is that you will need a Thai guarantor (other than your wife) for the loan. In the case of a foreigner being involved it will undoubtedly need to be a Thai with a 'Government' based job. So teacher, police officer, that type of thing. They will be signing to legally say that they will personally take responsibility for the loan if you default. So, it will not be something that just anyone will undertake lightly.
The final issue that I think you will have is that Thai banks are not so keen to obtain new mortgage customers as banks in the West are. It is more like England in the 1950s/1960s. You will need to be fully capable of convincing the bank that it is a sound investment for them. Usually they would like some sort of 'track record' with you. Preferably something like a car loan that you have a good repayment record on. At the very least a long standing bank account with them that should a regular income...

[nkstan]

The other possibility is getting some financing from the seller.

For instance,I have property to sell and If a married falang wanted a usafruct attached to the Chanote deed giving him user rights that he wouldn't lose on divorce and wanted some help financing,my wife would be will to help and negotiate such a deal!This way the falang could hold rights to the house and rights to the use of the land without worrying if things went upside down with his marriage!

[maaka]

sounds a good deal stan..is your land for sale listed here?

[BillaRickaDickay]

What happens if the loan and Userfruct agreement is drawn up between a falung and a Thai person and the Thai person Passes away, does that void the userfruct? or can the next of kin be held to account, bearing in mind that if the next of kin is a falung the property has to be sold.

[drillpig]

What happens if the loan and Userfruct agreement is drawn up between a falung and a Thai person and the Thai person Passes away, does that void the userfruct? or can the next of kin be held to account, bearing in mind that if the next of kin is a falung the property has to be sold.

An Usufruct if given to you by your thai Wife will remain in effect in the event of her death if she leaves the property to you in her will and you wish to remain on that property you can transfer the ownership to another thai and your usufruct will stay in force. Be aware that by Thai law when a man and wife divorce all contracts between them are null and void so if she wanted to she could contest the usufruct in the event of a divorce. If your Thai girlfriend gives you the Usufruct then it is yours for the term stated which can be a certain number of years or life. Don't waste your time like I did trying to get info about this from internet forums as you will get all kinds of contradictory advice speak to a lawyer or follow this link and it will give you facts rather than opinions. http://isaanlawyers.com/ Also not sure about this one but I don't think your wife or girlfriend can give you a 30 year lease or an Usufruct on a mortgaged property, if you have private credit then you should have no problems.

[jackspratt]

sounds a good deal stan..is your land for sale listed here?

http://www.udonmap.com/udonthaniforum/m ... 19106.html

[drillpig]

About the financing you can get 80% of the purchase price through bangkok bank but you have to have your name on the property which means you have to buy a condo to qualify, alternatively your wife can get a loan with your salary as a gaurantee but usually only if you work for a company in Thailand many of the housing estates in Udon have an understanding with one of the banks and can help you bypass this requirement. Just remember when dealing with banks in Thailand every branch you visit will give you a different answer I looked into financing for foreigners in Thailand for so long I ended up saving enough to pay cash. Good luck.

[maaka]

thanks Jack for the heads up..

[UdonExpat]

When I investigated financing a home with my Thai wife a few years ago, the bank was willing to lend her the money based upon my income, but the loan had to be paid in full by the time I reached 60 years of age. I was 58 at the time, so it would have only been an 18 or 19 month loan. Not much help. Having the loan paid off by the age of 60 seemed to be the standard at all the banks we talked with, 3 banks.

[papaguido]

When I investigated financing a home with my Thai wife a few years ago, the bank was willing to lend her the money based upon my income, but the loan had to be paid in full by the time I reached 60 years of age. I was 58 at the time, so it would have only been an 18 or 19 month loan. Not much help. Having the loan paid off by the age of 60 seemed to be the standard at all the banks we talked with, 3 banks.

It pays to shop around, I don't believe the banks here operate by the same standard. Of 3 banks we looked into, 1 denied us, the 2nd would only offer 50% and we got lucky on the 3rd try with an 80% loan. This was 5 years ago ago.

The loan was based on my income alone and my age wasn't taken into account, but my wife's was.

[kopkei]

i can only confirm, in the case of my family, married with thai wife , working in thailand no problem at all to get a loan , as he all ready bought some condo's, car , motorbike , with the help of a loan , i have no idea in other cases....

[newtotown]

Thanks for the replies. I'll let you know how I get on.