It needs to be understood very early on that it is highly unlikely for a foreigner to be able to obtain a loan, or mortgage from a Thai bank. The main reason for this is that the banks have no way (or no desire) to check your credit history from your home country, and be able to prove your ability to pay off the debt.
Should you find a lender prepared to take the risk, then you should be ready to provide a very large deposit and be able to pay off the balance quite quickly. In their home countries, foreigners normally have the ability to spread their mortgage payments over 20-30 years which makes the monthly payments low and affordable. In Thailand, you may be asked to pay off the debt in a much shorter 3-5 year period which will have a huge effect on the monthly payment amounts.
Thai nationals have the opportunity to sit down with their Thai bank to discuss obtaining a mortgage. Generally, they must always be in full-time employment with good employment history and always be able to show that their earnings are more than the monthly commitment of the bank mortgage. This may sound obvious but it is shocking how many Thai’s seem surprised that a bank will not offer them a mortgage with a loan repayment that is higher than their salary!
A Thai bank will need to have all copies of the ownership documents and land titles etc before they will consider a mortgage application. Only then will they say whether they will lend money against the property, or not. In many foreign countries, the banks will look at the person trying to obtain the mortgage, and then inform them how much they would be prepared to lend so that the person only looks at properties within a certain price range. In Thailand, this does not happen. You must find a property that you are interested in before the bank will tell you whether they are interested in lending money against it.
It’s Not All Doom & Gloom
Many of the developers around Pattaya can help spread the cost of the purchase of the property over the construction period. Some houses can take between 6-9 months to complete and you can pay money at certain stages of the construction. It may also be possible to secure the land plot and ask the developer to start building your house slightly later to give a few months extra.
Condominium projects take even longer, sometimes up to 3 years to complete, so this helps reduce the monthly or quarterly payment amount as you can spread the balance over a longer period of time.
These payment plans do not generally require credit checks. It must however be noted that should the scheduled payments not be made on time then the developer could terminate the sales agreement and put the property back up for sale. If terminated then any payments made up until that point will be kept by the developer as a compensation penalty.
To find out more about the possibilities of a bank loan, or developer payment plans then you should go and talk to your Bank.