20190422 (Mon)
What happens when a Foreigner wants to acquire a Strata Condominium RM800,000 and needs to borrow money from a local bank?
This is more about banking. I am not a banker, so if there is anything wrong do correct me.
Foreigners are like tourists. They can come in for social visit of 90 days and exit the State any time desirable. So, the bank is worried about giving out a loan where the borrower eventually disappears and becomes non-recoverable. Although the property is charged to the bank, there can be no repayment and bank eventually need to force sale to recover the money. This is a significant risk to the bank giving the credit and unnecessary paperwork/procedures.
Therefore, bank would never loan money to a foreigner. Nevertheless, there are a few things that the bank would give exceptions:
- Proof of local presence with Sdn Bhd company and good paid up capital.
- Proof of local savings or current account with active business activities.
- Proof of local fixed deposit account which shows long term commitment.
- Lesser margin of credit as bank has higher value of property charged.
- Better terms of interest and other supporting factors like children studying in college/university or self/parent here for medical treatment.
Obviously, the above would ease the borrowing by reducing the risk of the bank. Nonetheless, many foreigners like Indonesians, Chinese from Singapore or Mainland China, Taiwan or Hong Kong, Japanese and Korean really bought into properties in Malaysia (Kuching included). Many paid cash! Some took loans like 50% of the selling price of the property.
