Preparing a Home Loan Application
If you dream of owning your own home you are likely to need a home loan. But prepare well before you apply for one, otherwise you may be disappointed.
Be thorough and truthful
Commercial banks require personal data about the loan applicant, such as name and last name, sex, marital status, occupation, income, debt, place of residence, and the purpose of the loan. They also want to know your credit or debt history to check on your financial discipline. To be successful you must provide accurate and complete information.
Will my loan be approved?
When reviewing your loan application, the Bank will consider the purpose of borrowing according to the type of residence and your ability to pay the loan back. It will look at your occupation, income, and the value of a guarantee or collateral.
- Types of residence are land, land and buildings including a detached house, a townhouse, a commercial building, or a condominium. Purposes of borrowing are to buy a residence or to refinance.
- The loan applicant must be aged 20 years or over and receive a regular income from wages or business earnings. The applicant will need to provide evidence of retrospective income for at least 6 months and have no history of financial problems such as defaulting on a debt.
- The maximum loan amount cannot exceed 70-100% of the collateral value, or the balance of a refinanced loan.
- The maximum installment period is 30 years (up to 35 years for permanent employees) or, the repayment period and the applicant’s age combined must not exceed 65 years.
If your loan is approved, the Bank will notify you within 3-7 business days after the submission of your loan application and all documents needed. The Bank will then make an appointment to sign the contract and register the mortgage at the Department of Land in the district where the title deed or the guarantee is held. If there is a co-borrower, or guarantor, you will need to make an appointment for them to sign every page of the contract. The Bank will inform you about the initial costs that you must prepare for the contract date.
Valuation of the property
As part of the loan consideration the Bank will evaluate the property value. The valuation will be based on the price evaluation of the Land Department, market prices and the purchase price.
Other expenses
Aside from the cost of purchasing a home, the deposit to be paid on the date of the sales contract, down payments, commissions, the cost of logistics, and legal costs (for example, fees by the Department of Land or Ministry of Commerce, registration fees, photocopy fees), the home buyer will also have other expenses such as fees for applying for the loan, fees for the property valuation (about 3,000 baht/plot, excluding VAT), stamp duty of 0.05% of the credit amount (this can be either at the expense of the buyer or seller depending on the agreement), the fee for registration at the Department of Land such as a transfer fee of 2% of the evaluated price, and the mortgage fee of 1% of the credit limit including fees and insurance premium. Fire insurance, and life insurance to ensure loan repayments, are usually required by the Bank. Home buyers can apply for additional loans from the Bank to cover these.
Buying a home or a condominium need not be difficult provided you prepare yourself well. Then your dream of your own home can become a reality.
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