We have known that foreigners are restricted to buy only condominiums in Thailand’s real estate market, but where can they borrow a mortage to buy this type of property? Most commercial banks in Thailand, though offer a mortage for foreigners to buy condominiums, still have a multitude of financial products to service locals; meaning the area of mortgage loan for foreigners might not be specialised and still has tightened terms and conditions to be qualified for.
MBK Guarantee, a wholly owned subsidiary of MBK Group, alternatively, is another channel for foreigners to borrow a mortage loan with confidence. The company, with capital registered of THB 500 million, specialises in mortgage loan for foreigners and has native-speakers staffs to negate the communication issue. The prominent point are their friendly requirements where foreigners are not requied to be permanent residence or employed in Thailand, no restrictions for specific nationalities, no Thai spouse is required, and borrowers with age of 70 are still legitimate, for examples.
Furthermore, the loan purpose can be for buying a new or second hand condo, refinancing existing loan or releasing equity; moreover, both ready-to-move and under-construction condos are legitimate for the use of loan. One of a few conditions MBK Guarantee has is that the proposed condos must be located in prime areas such as Bangkok Metropolitan region or key resort areas such as Chiang Mai, Udon Thani, Chonburi, Petchaburi, Prachuap Khiri Khan, Phuket and etc.
In detail, the currency used for the transaction must be in Thai Baht, the loan amout can be up to 50 per cent of the property value, the minimum loan size must not be less than THB 1 million, the loan term is from 1 to 10 years, the payment is made in monthly installment required with option for balloon payment (up to 50% of loan) at maturity, fire and life insurances are required throughout the contract.
For the interest rate and fees, MBK Guarantee refers to Siam Commercial Bank’s MLR plus 2.3 percent per annum. The upfront fee is 1.25 per cent of the loan size (min THB 30,000), commitment fees accounts for 2 per cent of non loan disbursement, and prepayment fees is 2 percent of the prepaid loan amount for the first 3 years only. Other expenses are mortgage fee with 1 per cent of the loan size, duty stamp with 0.05 per cent of loan size (max at THB 10,000), while appraisal, insurance, and OUT-OF-POCKET fees are subject to the authorities.
Documents that you need are ID/passport which must be valid for at least 6 months, Marriage/divorce certificate as some cases the borrower may need the Thai spouse as a co-borrower, Spouse consent to borrow/mortgage property, Bank statements for 6 latest months, Credit bureau reports from country of residence, etc. The documents required are also different if you borrow a mortgage in the form of corporate. Other than this, you also need property documents such as Condominium title, Valuation report by preferred appraiser, depposite/installment receipts, etc.
*The article does not state that MBK Guarantee is the only financial service that offers mortgage loan for foreigners, but rather one of the channels where foreigners can borrow a mortgage loan to buy properties in Thailand with convenience.
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This article is written by Sitth Chongprasobtam, a content writer at DDproperty.com. For more information, please contact Sitth@ddproperty.com
