A Bargirl Takes Out A Mortgage

I met my girlfriend in a bar about a year ago. Over the course of the next seven weeks she stayed with me most of the time. I was also in LOS for three months earlier this year. I agreed that she should go to hair school to learn a skill (see my story "The cost of rescuing your BG girlfriend" Readers Submissions 25/7/2003). Now, I do not love her in the sense that she is a stunner, or that she is great in bed. I love her because she looked after an old farang very well; I love her because I know she has had a difficult life. I want the best for her. I am not looking for her to make me happy, I am not planning to marry her. In other words, she is not the love of my life, but I still care deeply about her. She has dreams, and this old farang can help to make them come true. I had dreams when I was young.

On my first trip in 2002, we were with a group of Thai colleagues at a restaurant in Saraburi. My GF tells me that one of them tells her to ask me to buy her a house. Her Auntie says that a house in Buriram can be built for 300,000 Baht. We get to Bangkok and I sit her down and explain that I do not have 300,000 ($7,500) sloshing around to give her. I also point out to her that she will need an income to support the house. She sits there silently; she does not like what she is hearing. Somehow we agree that she goes to hair school. I figure out that she can earn enough to support herself and her family. I have written another article on Stickman on this "The cost of rescuing your bargirl girl friend". I also mention to her on my last trip that in the West we can get a mortgage, she does not believe me. But on another encounter with another group of Thai colleagues I mention this and they confirm that you can get mortgages in Thailand, I turn to her, as if to say ' I told you so'. She takes all this in.

Her latest email to me was that she is thinking of borrowing 400,000 from the
bank over 20 years, costing her about 2,650 Baht a month. So that she could get her family a house as theirs is old and leaks water in the rainy season. She says that they are worthy of pity, I also think that my GF is worthy of pity, which is why I send her to hairdressing school. I admire her determination, I really do. She deserves a second chance, if she throws it away that is her choice.

I also happen to be a pro at mortgage calculations (as well as actuarial
pensions calculations, annuities, etc), so I can explain to her that the 2,650 Baht/month will go up as interest rates rise. She is a plucky girl; I might throw in 100,000 Baht to get her started, once she has proven she can cut hair and run a business.

For those of you interested, here are the monthly repayments on a 400,000 loan over 20 years (interest calculated annually). Extending the loan to 25 or 30 years does not make a huge difference. If you change the loan amount it is pro capita i.e. a 1,000,000 loan is 2.5 x 400,000 loan.

Interest % Monthly repayments (B)
5 2,674
6 2,906
7 3,146
8 3,395
9 3,651
10 3,915
11 4,185
12 4,462
13 4,745
14 5,032
15 5,325

You can download my pension and mortgage calculator here:
http://ourworld.compuserve.comhomepages/rossuk/401k.zip

The latest addition is that she has got the mortgage, and she has just paid the first of 240 installments, and her family has started to build the house. The bank lent her 400,000 baht, without her even having a job. I have not signed any papers. Whether she realises that the bank can have the house if she does not keep up payments, I do not know. I was not in LOS to advise her, but I do admire her determination.

Now, a word to you farangs. The best advice that I have found in Stick's weekly is to take out a mortgage rather than buying a house for your girlfriend or wife (yes they do have mortgages, bank loans in LOS). Then if she kicks you out, SHE is stuck with the mortgage and YOU have not lost all your capital (OK, she gets the house which is in her name anyway). I do not mind sending my girlfriend 20,000 a month, which comes out of my regular income, which I can afford, but I am not going to give her 400,000 out of my savings. I hope you see the difference.

With a mortgage, my girl friend also has an incentive to work (and so do her
family), I have told her that I will not be around for the next 20 years to bail her out.

I do want the best for her. I really do. Maybe I can make her dreams a reality, but she also has to work hard too.

My girlfriend told the bank that she had a boyfriend who sent her money each month, but a friend of her cousin (a doctor I think) acted as guarantor. The house should be finished by January. The bank is Krung Thai, she said it was a bank for poor people, but it is the second largest bank in Thailand. The minimum lending rate is 5.75% and house loans are at MLR-0.75% (5%) and interest is charged monthly, so her repayments are 2,639 B monthly. If the loan is over 30 years repayments are 2,147 B.

Stickman says:

I never cease to be amazed by Thai banks. A farang friend with a monthly income of around 80,000 baht was turned down for a credit card while your girlfriend is given a loan when she doesn’t even have a job! Amazing Thailand! And yes, not buying things for Thai girlfriends outright but getting a loan which either they pay or you pay and they guarantee, is a good step towards ensuring that she will not just kick you out in order to keep the asset.