Financing Your Home | Global Top Group
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September 24, 2017
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Financing Home

Financing Your Home

If you are thinking of buying a house or condominium in Pattaya then a big part of the whole situation is the financing. The Global Top Group can help you with this difficult situation and point you in the right direction of how to buy a condominium in Pattaya.

Borrowing To Finance Your Home

Lending money to own your own home can be affordable, a mortgage need not break the bank and in this blog we aim to give a few pointers of how to do it. Taking out a mortgage may mean a lifetime obligation and a financial burden, especially for those who have not done their calculations correct and their monthly payments are too high. There are several ways one can reduce the monthly payments and to shorten the life of the mortgage also.

Your Deposit

One such way is by making a large down payment, this will afford you greater bargaining power to get a reduced rate of interest from the financial houses. Another is to pay more back monthly than originally stipulated. Just by adding a small amount each month could take years off your mortgage, also saving hundreds of thousands of baht in the process.

Loan Interest

Given the accrual of interest, the loan balance can permanently rise. For example, a 1 million-baht mortgage with a 5% interest rate per annum over a thirty year period requires a monthly payment of 5,368 baht. But at 5%, the total interest cost will swell to 930,000 baht throughout the loan’s life. One way of combating this is to make an annual lump payment.

Higher Monthly Payments

Increasing your monthly payments is by far the easiest and most effective way to pay your loan off faster, and to reduce your interest payments. Working away early on at the principal is a powerful money saver as the small reductions in debt compound dramatically over the long term of the loan.

Lump Sum Payment

For wage earners who perhaps receive an annual bonus and can afford to use this as lump sum payment this is really a good idea. Paying five times the monthly due amount once a year could decrease the total interest by 44% and shorten the loan by over ten years. Thai employees regularly receive a bonus roughly three times their monthly salary, so a lump sum payment is manageable. The advantage of a lump sum payment is that it does not affect your monthly salary, leaving you with enough money for little luxuries or living expenses. Finally, you can combine these tactics, paying say 10% more every month plus paying a smaller lump sum payment once a year. It is without doubt that buying a home is probably the most expensive undertaking of your life, thus you should explore every avenue how to finance it as cheaply as possible, and not to pay interest that you need not.