1. GET APPROVAL FOR A MORTGAGE

The causes of failure to secure a mortgage come from 2 major sources: property value being less than the mortgage requested and lack of eligibility of the borrower. Generally, people with stable careers or good history of savings and who can demonstrate an ability to pay the installments for the mortgage, who are not carrying much debt, have a good credit bureau rating, can afford at least 20% as down payment and have no history of emergency loans are considered good candidates for a mortgage.

If the property value is less than the mortgage requested, a bank will make an estimate of asset values for consideration. If asset values are less than the requested amount, the bank will typically not approve the mortgage.

Each bank will have different criteria for mortgage eligibility but most will consider various factors as evidence of good financial management as follows :

1. Career Stability : Government employees are usually considered eligible as they work for a stable employer: the government. These are followed by employees who have worked for large companies for at least 6 months and work in low risk jobs for example, teachers in Bangkok and vicinity are considered less risky than teachers in the 3 southern frontier provinces of Thailand where there is civil conflict. Therefore, a teacher in Bangkok would more easily get a mortgage.
2. Ability to pay installments : A borrower must have a sufficient monthly income after expenses, to pay the mortgage installments.

• Borrowers with salary not over 30,000 baht/month should not carry debt over 40% of total income.

• Stable career : Government officers are the most likely because it is the most stable organization in this country. Followed by employees of large company that has work time at least 6 months and work in the low risk area for example, teacher who work in Bangkok and perimeter will have risk less than teacher who work in 3 southern frontier province , so teacher in Bangkok will get the approval easier.
• Have an ability to pay the installment of debt : Have the income per month so much and when withheld the expenses, it is enough for pay the installment.
• Low debt load : This does not mean a borrower cannot have debt; it must not be too much or beyond one’s ability to carry. Having several debts indicates financial unpreparedness. How much debt can be considered too much per month? The Kasikorn Thai bank has the following criteria.

Borrowers with salary not over 30,000 baht/month should not carry debt over 40% of total income.

Salary between 30,000 – 70,000 baht: borrowers should not carry debt over 50% of total income.

Salary above 70,000 baht: borrowers should not carry debt over 60% of total income.

• Another criterion for eligibility for a mortgage is having savings and regular account movement. In addition, having a regular monthly income for at least 6 months and a balance of savings of about 1 to 3 months income or supplementary incomes is a consideration. These savings should have been in the account for some length of time to demonstrate the account holder has established savings habits.
• A clean Credit Bureau profile is important for eligibility for a mortgage. Having no history of delinquency and demonstration of discipline in the use of one’s money are important. You can learn more from the Credit and loans department. If you have a poor credit bureau record, it must be cleared at least 12 months before application for a housing mortgage.
• Ability to make a down payment of at least 20% is an important consideration for mortgage eligibility. Generally, banks approve mortgages that cover only 80 – 95% of the price of a house or condominium. The difference is the debtor’s burden.
• Having no history of emergency loans is another important point for eligibility. Many banks disqualify borrowers who have required emergency loans because this shows poor financial discipline. The bank will see this as an increased risk that the applicant may not have the ability to pay their debt in future.