By Netita Taechathasiri
Special to THE NATION WEEKEND
Whether you need a house to live in or for investment purposes, a home loan can usually be arranged from a bank of your choice.
The eligibility criteria differ from bank to bank. Here are the five most important factors that feed into determining home loan eligibility criteria from all banks in Thailand:
1. Income: This is the important factor for defining the maximum loan amount you can borrow. We can categorise this by two groups – those receiving a wage or salary and the self-employed. Whichever category the applicant falls into, a steady and regular source of income is a must to ensure they have the funds to pay back the banks every month.
Salary men/women. If you work for any government department or at any registered company, you belong to this group. Pay slips, bank statements and an employer reference letter are the documents almost all banks demand.
Self-employed. If you have your own company or business, or have other sources of income such as owning rental properties or holding shares, you belong to this category. If you have tax-related papers and bank statements to show, you can certainly apply for a home loan.
2. Rate of interest: Home finance eligibility is always inversely proportional to the rate of interest. If the interest rate is higher, eligibility will be lower – and vice-versa.
3. Outstanding loans: Thai banks always recommend keeping your debt-to-income ratio between 50 or 80 per cent. This is to leave a window for future loans or to pay off any existing loans. Unsettled loans could be a great limitation on your eligibility.
4 Loan term: If you choose a longer tenure, your eligibility will increase. But the downside to this is that you will end up paying more interest.
The maximum loan term of most banks in Thailand is 30 years. Age is a factor that could impact the loan term, as the repayments have to be completed before the age of 60 or 65.
5. NCB report: Banks also examine your credit repayment history from NCB (National Credit Bureau), the country’s regulator and first credit information bureau. A negative record can bring down your eligibility significantly.
Applying for a mortgage doesn’t happen overnight, and you can make the mortgage application process a whole lot smoother when you prepare well in advance of application time. Our advice is to not quit your job, make sure you clean up your credit report, pay down your outstanding debt, begin saving. You are now good to go.
With technology leading the way in everything in our daily lives, online information gathering and applications for home loans are gaining momentum. Online application is a timesaving and convenient way to apply for loans and is becoming the preferred choice for many borrowers.
A one-stop home-loan application service platform such as somjai.co is the latest and easiest way. Homebuyers no longer need to walk into a bank branch to find out what offers are available, collect information online and offline, compare to find the best rate, calculate eligibility, submit the required documents and follow up on applications.
An online service, such as the Somjai Home Loan, may offer the easiest way to go online and compare various home loan offers in the market and make a list of banks most suitable for your needs. This can save a lot of time and effort.
The home-loan expert team will always be there
to provide special consultation service and ensure
you get the best deal in the market at the best experience.
The Somjai team also provides a home loan service for foreigners interested in purchasing condominium units in Thailand. Our English-speaking staff are ready to provide prompt service and make recommendations.
Netita Taechathasiri is co-founder and CEO of Somjai Home Loan, a startup in dtac accelerate batch 6.