GH Bank offers cheap mortgages

GH Bank is offering homebuyers in provinces nationwide low-interest mortgage loans and help with pre-screenings, as commercial banks tighten their lending criteria.

Mr Chatchai says the bank will help low-income earners build a track record.

President Chatchai Sirilai said the scheme, worth a combined 30 billion baht, will be offered to homebuyers in more than 200 residential projects developed by members of the 15 real estate associations and clubs nationwide.

"To facilitate homebuyers, we will have our staff at projects connected to the programme. They will help pre-screen and pre-approve homebuyers," he said. "We will also help those whose qualifications are incomplete to build their track record to more easily get a mortgage."

Interest rates for the programme will be customised and be more attractive than current rates of 3.43% per year on average. Loan-to-value and debt service ratio will also be revised for customers with good qualifications.

GH Bank on Thursday signed a memorandum of understanding with 15 real estate associations and clubs, including the Thai Real Estate Association and 10 real estate associations in 10 provinces.

The provinces are Chiang Mai, Khon Kaen, Phuket, Songkhla, Chon Buri, Nakhon Ratchasima, Phitsanulok, Nonthaburi, Rayong and Udon Thani. There are also four real estate clubs -- in Saraburi, Mukdahan, Surat Thani and Samut Sakhon -- that will soon be moved into the associations.

Members of associations and clubs are required to submit their projects to join GH Bank's special programmes, including fast track, smart fast track, regional fast track and LTF.

Homebuyers will have the normal price appraisal fee waived because GH Bank will set the price for collateral in advance. This will also help the bank speed up consideration of mortgage loans.

The programme will be rolled out on Monday. The bank aims to release 70% of the total or around 20 billion baht.

Mr Chatchai said the bank is ready to support in the near future mortgage loans for low-income earners under a programme initiated by Deputy Prime Minister Somkid Jatusripitak.

The bank will prepare home loans of over 10 billion baht for units priced at 250,000-300,000 baht for 30-year lease contracts with interest rates of lower than 3% per year.

A programme to offer homes for low-income earners will be a coordinated effort between the National Housing Authority, which will develop the houses, the Treasury Department, which will supply land plots and GH Bank, which will support mortgage loans.

Chadchart Sittipunt, chief executive of SET-listed developer Quality Houses Plc, suggested the government utilise the Treasury Department's large land plots near mass transit lines to develop housing units for low-income earners.

"There is a large plot of land sized over 1,400 rai in the Theparak area near a BTS Green Line station owned by the Treasury Department," he said. "This plot can be developed as a city for low-income earners with housing units for rent."

Because low-income earners will be pushed to live outside the city amid rising land prices in the city and near mass-transit lines, they will spend longer and pay more travelling to work. The government may consider a flat fare rate to help low-income earners.

Source: http://www.bangkokpost.com/business/finance/1278923/gh-bank-offers-cheap-mortgages