Property Financing Options

Foreigners generally cannot obtain a Thailand mortgage from local Thai banks to finance the purchase of their Pattaya property investment. Most of the financial institutions in Thailand provide loans for real estate purchases to Thais and Thai Companies.

In recent years Bangkok Bank (Singapore) has had a loan program for foreigners with qualification being very similar to that in the west. With the current global financial situation you are best to explore your options directly with the lending institutions.

If you cannot get a Thailand mortgage to buy your dream Pattaya property, don’t worry. Several options are available to you.

Developer Financing

Developer financing has become more prevalent in Pattaya over the past year. Deals ranging from 2-year to 10-year financing are available to buyers of new Pattaya houses and condos. These financing deals are available directly from the developers. As a result, the structure of each deal varies.

Be leery of offers for “free financing” or “0% interest”. Obviously the purchase price under these scenarios has been inflated to cover the cost of capital to the developer. It’s best to negotiate the best possible purchase price then negotiate the financing deal separate from the price.

Seller Financing

Individual property owners have recently become more open to extending financing to buyers of Pattaya houses and condos as a means to stimulate interest in their resale property. Under such an arrangement, the buyer and seller sign both a purchase and sale agreement and a promissory note.

As with developer financing, negotiate the purchase price separate from the terms and conditions of the loan. Important to note is the fact that the seller will continue to hold the title deed (Chanote) to the property until the loan repayment is made in full. Make sure your lawyer reviews your deal and ensures that all documents are updated and properly safeguarded to protect your investment.

Other Options

There are generally two other options available to foreigners to finance their Pattaya house or condo purchase. Historically, many foreign buyers had taken a mortgage against their property in their home countries. This is more difficult than ever given the economic crisis, yet still an option for some.

In some instances, the Thai spouse of a foreign national may qualify for a mortgage. In such event, the sale and purchase agreement (and promissory note) would be executed by the Thai spouse. If the foreign national is funding a substantial portion of the cost, the foreign national should register a long-term lease in his/her own name (with the Thai spouse as the "lessor" and the foreign national as the "lessee"). Consult with your attorney to minimize the tax implications of such an investment structure.

You may also use a lease structure to make your desired property affordable. Available structures include lease with the option to buy and long-term leases. Any lease for a term of more than three years can be registered on the title deed at the land office, thereby creating a property right in addition to a contractual right to occupy the house or condominium.

So don’t worry if you cannot obtain a Thailand mortgage for the purchase of your property. There are options available to you if you are patient and if you work with a qualified real estate agent. Work with our Land of Smiles Property (Pattaya) professionals to help find the best property for you.