Mortgage Masterstroke
Mortgages available through Lynx Developments are a significant breakthrough for the future of real-estate on Samui.
Wednesday, April 2, 2008
The foreign real-estate market on Samui has traditionally been dominated by cash purchases only. A lack of financing options for foreigners has limited the market to those investors and individuals who could actually raise the cash to buy a property.
Financial institutions have been unlikely to lend money for a foreign property purchase and local Thai banks, in the main, are unwilling to offer mortgages to foreign buyers.
So, in many situations, buyers have had to raise mortgages on properties in other countries to get the required funds to buy a home here. Despite this financial restriction the property market on Samui is now well established. It has evolved extremely well and is currently showing a remarkable recovery after the political and legal issues that have been affecting recent investment.
The election of a new government has resulted in an upsurge in property purchases so far this year. However, up until now properties have still been limited to a relatively small number of cash-rich buyers.
Lynx Developments is known as a company that is pushing the local real-estate market to new levels, and by teaming up with Palm Construction and Global Financial Services it has created an opportunity that will significantly impact property sales on Samui. It will also make buying a home here possible for a much larger number of people. At last, a collaboration of professional and highly regarded companies has made buying a home on Samui a realistic possibility for anyone with a passport and a salary.
Lynx is a developer that has consistently offered high levels of security and peace of mind with the properties it’s built and sold. Ten-year construction guarantees and land-title insurance come as standard when you buy through them.
Palm Construction has built an excellent reputation for providing high-end European building standards and Global Financial Services has been providing mortgages and financial solutions in the UK for over 20 years. Together, these three companies can now offer just about everything that a home buyer could wish for.
Investors can already get mortgages in other Asian countries but no other area has the allure of Samui. With this simple mortgage solution Samui is now able to compete with any worldwide destination.
Together these companies have come up with a mortgage that allows buyers to finance up to 60% of the property value on a 10-year payment term. A reasonable interest rate of 7.6% is fixed for the whole duration of the loan.
Any previous financial packages that have been sporadically offered by banks in other countries, such as Singapore, have either required high set-up fees or have had prohibitive qualifying criteria which significantly restricted the numbers of those who could apply. Fortunately, neither issue apply with this offer. This mortgage is open to anyone; there’s a one-off application fee of only Bt5,000 and the mortgage is secured against the property you’re buying; with the ownership documents held in escrow until the termination of the loan.
No credit-rating, financial references, personal guarantees, additional security, secondary collateral or other assets are required. Therefore, this is solely a mortgage for that specific property and it’s completely unrelated to any other assets you may have in another country.
Hywel Williams, Chairman of Lynx, states, “This is a property investor’s dream. Our unique mortgage financing package has basically opened the door to allow a wider range of purchasers to own a dream home in Thailand, and for property investors, it finally provides a tool for leveraging investment returns in Thailand.”
Kurt Meerveld, Managing Director of Palm Construction, adds, “What we have achieved is something that can move the market. It operates like a traditional mortgage in the UK or Australia, only it’s far simpler and easy to set up. Apart from the mortgaging financing contracts, the only further documentation required is a passport. There are no high set-up fees, hidden costs or annual fees.”
Lynx Developments has several projects at different stages of development, including Amara Gardens, Amara Heights and the Amara Golf Village. Many others are planned that will provide affordable apartments, villas and condominiums for a global market; this mortgage option is available for all of them.
Together with the land-title insurance, provided by a leading international insurance company, Rodney Waller, Marketing Director of Lynx, states, “We have created a risk-free package in Thailand for property owners.”
Such a hassle-free mortgage offer opens the market up to all those people that have a steady income but no easily accessible capital. Now you can pay off the value of the home over 10 or more years making it a far more realistic opportunity.
For sophisticated property investors this offer has even greater benefits. Now you can enter the market using less capital and enjoy even better investment returns, as the property value increases over time.
For instance, if you buy a property costing $100,000 using cash, and the value increases by 15% each year for five years, the return on the investment is around 100%. However, the same investment using a 50% mortgage produces nearer a 200% return.
Samui is already a desirable lifestyle destination for investors. However, in the past some have been deterred by the lack of financing opportunities. Now Samui has every possible ingredient to encourage such investors into the market.
This is the latest major breakthrough for the future of the island. Efforts have been made to increase the number of visitors; an expanded airport; the opening of the airport to Thai Airways and other airlines; and the arrival of internationally branded hotel groups and their resort residence concepts are all important for attracting visitors.
A more stable political environment and positive economical outlook make investing in real-estate a safer proposition. And, now, the introduction of such genuine mortgage options ensures that a bigger percentage of those visitors will actually be able to buy homes without trying to juggle their finances or find large lump sums.
Everything has started well this year for the real-estate industry on Samui. Sales are rising rapidly, the diversity of buyers is increasing and the political stability has given confidence to buyers.
It’s a crucial time in the development of the real-estate market on the island; especially with a declining global economy, the potential slowdown of housing markets in other countries, and the ability to borrow money becoming increasingly difficult. Therefore the timing of this breakthrough couldn’t have been better. As interest in property is increasing the availability of such workable mortgage solutions will undoubtedly turn more of that interest into actual purchases.
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