Is there much difference in housing loan approvals granted to applicants with children and those without? My wife and I are having a disagreement, as I want to buy a house before having children because I’m worried it might be a factor in the loan approval. But my wife, who is 36, wants to have children first.
—Tawatchai
Answered by...Worapoj Kate-aram CFP
I don't think having children will be a factor in mortgage approvals. The bank will be focused on your monthly income, whether that income is consistent, the security of your job, your debt payment history, your credit record, and so on.
It may have questions about your salary and existing fixed costs, if you have other loans and your monthly take-home amount if they approve your mortgage. The bank would gauge what percentage of your income would be taken up by a mortgage payment and debts each month?
Normally a bank would set your mortgage payment at no more than 40% of your monthly income. If you meet all these criteria then you should have no problem getting a mortgage.
Plan your cash flow wisely after either receiving a mortgage or having children, because both are a major drain on funds.
This means calculating future expenses, as the cost of raising a child rises as the child ages. Mortgage costs are usually fixed but last for decades.
Here's wishing you have a warm and happy family.
I’m planning to buy property, starting with a condo worth 1.5 million baht. My girlfriend will obtain the loan but I’ll pay the instalments. The second property is a store priced at 5 million baht. The third is a shophouse in Hua Hin. My mother has been paying the mortgage but wants me to take over ownership. The loan has 1.8 million baht in principal remaining. My income is around 100,000 baht per month, but after two months off work I have no earnings. Should I invest my savings in mutual funds? I would like to let the money generate some yields. I’d like your advice on a financial plan as I want to pay as little interest as possible on property loans.
—Ton
Answered by...Attaporn Promkaewngam CFP
Once you add up the amount of debt you are due to pay, you will have a total debt of 8.3 million baht.
After calculating the interest cost, at around 5% per year, your interest will add up to 415,000 baht per year or 34,583.33 per month. That amounts to 34.58% of your total income, not including your startup money.
Normally a financial institution would make you pay 30-40% of your income for loans. The calculated amount of loan and interest payments will be tough to meet.
If your monthly income is stable enough for you to make payments on time, I believe you can work it out. I'm guessing you might not have mentioned all of your income, or else you probably would not have thought of purchasing three properties.
But if your total income per month stands at 100,000 baht net as you said, I would advise you to choose which one property would be best for you.
Don’t forget, once you have debts, they will stay with you through the good and the bad times. And the interest will continue too.
The Thai Financial Planners Association is the Certified Financial Planner (CFP) trademark licensing authority in Thailand. It is a self-regulated, non-profit group of financial advisers and experts from various organisations set up to give advice to investors. Questions can be submitted through wealthcare@bangkokpost.co.th or the TFPA webboard, www.tfpa.or.th