BUYING A CONDO | Bangkok Bank Ltd. scheme woos foreigners
BUYING A CONDO ? Bangkok Bank Ltd. scheme woos foreigners
Expatriates can get loans from its Singapore branch
It is not uncommon for foreigners to buy a condominium in Thailand, but so far it has been quite difficult for them to seek a mortgage.
That is set to change.
Expats who want to own condominiums in Thailand can now ask for mortgages through Bangkok Bank’s Singapore branch, but the initial process can be done at branches in Thailand. Bangkok Bank (BBL) is the only bank offering such a facility to foreigners.
Under the current law, foreigners are not allowed to own land but they can own a condominium if not more than 49 per cent of the units are foreign owned. For example, if there are 100 units in a condominium project, only 49 units can be sold to foreigners.
However, the Bank of Thailand (BOT) does not allow banks in Thailand to lend directly to foreigners. Expatriates wanting to own a condominium have had to transfer their money from overseas, or save in order to buy, which may take a long time and waste money on rental costs before they can get their new homes.
BBL requires borrowers to buy homes priced at least US$300,000 (Bt9.64 million) or equivalent, while offering a credit line of around 70 per cent of the price but not lower than $200,000 or equivalent.
Loans will be given in three currencies, US dollars, Singapore dollars, and euros.
The mortgage rates depend on the currency. They are: US dollars - prime lending rate (5.0 per cent) plus 1.5 per cent per annum, or 6.5 per cent; Singapore dollars - prime lending rate (6 per cent) plus 1.5 per cent, or 7.5 per cent; and euros - prime lending rate (6.5 per cent) plus 1.5 per cent, or 8 per cent. These rates are as of last Monday.
The maximum term of a loan is 20 years but the term plus the borrower’s age shall not be over 65 years.
Because lending to foreigners involves high risk and there are few competitors, the bank cannot lend more than 70 per cent of the purchase price.
The bank also needs to quote floating interest rates, while the property asset will be pledged as loan collateral.
Borrowers also have to pay $2,000 in front-end fees, which are payable in two stages.
There is a non-refundable $200 fee when submitting a loan application, and the remaining $1,800 is to be paid when the letter of offer is accepted.
If there are any amendments after loan approval, the borrowers must pay $120. There are also prepayment fees, which are charged at 1.5 per cent of the prepaid amount and a cancellation fee, which is charged at 1.5 per cent of the loan approval amount.
Other expenses, including legal costs, valuation fees, fire insurance premiums and others must also be paid by borrowers. Documents required are a completed mortgage loan application form; copy of identification card (front and back) or the essential pages of the passport; signed copy of sales and purchase agreement or reserve agreement; a bank’s reference letter addressed to BBL to confirm the banking relationship and type of account, size of loan and deposits with the bank; the last six months’ bank statements; and a credit bureau report from the country of residence.
Individuals earning a monthly salary need an employer’s letter addressed to BBL, confirming position, period of experience, and remuneration; income tax returns from the last two years; the last six months’ computerised pay-slips; and a work permit for those working in Thailand.
Self-employed individuals need the last two years’ balance sheets as well as a profit and loss statement and the last two years’ income tax returns.
Foreigners looking for a second home and who are interested in this mortgage can ask for more information at the bank’s head office.
Everything will be done in Thailand through BBL’s cooperation with its branch in Singapore. If all required documents are submitted correctly, the approval process may take only two weeks. Customers do not need to travel to Singapore as the bank will process the application.
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BANKING SERVICES
Expats can apply for credit cards
But Thai banks set guidelines on minimum local work experience and monthly income for foreign customers wishing to use plastic
This is the second in a series about financial products for expats gathered by The Nation. Having previopusly covered procedures for opening deposit accounts for foreigners, this is about credit-card applications.
For a credit-card application, each card issuer requires a work permit and passport from foreign applicants.
For expats, domestically issued credit cards will allow you to receive benefits from regular retail promotions, lucky prize draws, discounts and loyalty programmes. By using local cards, foreigners can also save by not having to pay the foreign-exchange fee charged when using foreign-issued credit cards in Thailand.
However, each bank has different conditions for credit-card applications.
The Bangkok Bank credit card is available to foreign applicants who are permanent residents or have had a work permit for at least one year, while other conditions are the same as for Thai applicants.
Kasikornbank requires foreign customers to have a minimum of one year’s work experience in Thailand to apply for a credit card, with a minimum monthly income of Bt50,000.
They must also provide a credit bureau’s authorisation, and their work permit must be valid for at least six month after the application date. Customers will be informed of the approval result within 16 days for applications in Bangkok and 19 days upcountry.
Siam Commercial Bank requires a work permit and minimum monthly salary of Bt100,000, compared with Thai applicants’ minimum income of Bt15,000. The bank also needs foreign customers to show a bank statement covering the past six months.
Krung Thai Bank requires foreign applicants to have had a work permit for at least two years, but their requirement for minimum monthly income is Bt15,000, the same as for Thai applicants. They must also show a bank statement covering the past three months and their passport.
TMB Bank offers two choices of credit-card applications for foreigners. The first requires lending deals with corporations of at least three years and a minimum credit line of Bt30 million. Expats employed by these companies are eligible to apply for a TMB Bank credit card. A work permits must also be shown.
The second choice is offered to individual foreigners who open a fixed-deposit account with the bank. They must use the account as collateral for their credit-card application and will receive a credit line of not more than 80 per cent of the deposit amount.
Bank of Ayudhya requires three years’ local work experience and a minimum monthly income of Bt50,000 for a classic card and one year’s local work experience and a monthly salary of Bt100,000 for gold and platinum cards. Self-employed customers should have average cash flow in their bank account of Bt350,000 a month or more for the classic card and Bt700,000 or more for gold and platinum cards. Applicants must submit copies of their passport and work permit valid for at least six months. Company employees need a copy of a payroll slip and a bank statement covering the past six months.
Remember that if any of your credit cards has been lost, stolen or retained by an ATM or if you suspect you have been the victim of fraud, contact your card issuer immediately.
In cancelling your card or putting a hold on your account, you will be liable for all transactions made before notifying the bank.