Owning a home is an important milestone for many consumers. Unlike purchasing other types of goods, buying a home comes with many details to consider. Therefore, those planning to buy a residence need to start studying and understanding the various related aspects early on to ensure that every step goes as smoothly as possible.

5 Essential Steps for First-Time Homebuyers to Plan with Confidence and Without Worry. Many people view buying a home at this time as a challenge due to the still-recovering economy and high-interest rates, which are factors that might suggest delaying home purchases. However, property developers are collaborating with banks/financial institutions to offer special loan promotions to make homeownership more accessible and alleviate concerns about interest rates. This presents an interesting opportunity for those needing to buy a house or condominium right now.

Thus, the key to buying a residence today lies in detailed and careful planning. DDproperty, Thailand's number one real estate platform, provides guidance on how to prepare for home buying with peace of mind, allowing first-time home seekers to study, understand, and embark on their journey to homeownership with greater confidence.

  1. Sketch Your Dream Home Specifications, Focusing on Family Members. Consumers should start by identifying and selecting their preferred style of house/condo, while also setting a budget that aligns with their financial status. Next, they should specify the desired functions, usable space, and number of rooms based on the lifestyle and actual living conditions of family members, creating a checklist to compare information from various projects. Additionally, learning about construction materials will help consumers understand the different usage characteristics, enabling them to choose projects that better meet their lifestyle needs and will be beneficial if they wish to renovate in the future.
  2. Use Marketplaces to Simplify Your Search. Data from the latest DDproperty Thailand Consumer Sentiment Study reveals that marketplace websites are the most popular technology among consumers for searching for residences, with a usage rate of 65%. Therefore, choosing to search for house/condo projects on real estate marketplace websites like www.DDproperty.com is an interesting option that saves time in this digital age, making it easier to find the right project and reducing the steps consumers need to take to match their dream home with real-life projects.

The advantage of marketplace websites is that they compile a wealth of listings for sale and rental projects from both property developers and verified agents.

Once consumers find a project of interest, they should schedule a visit to the actual project to inquire about additional information or special promotions with sales staff or agents, as well as to assess the quality of construction and the surrounding community area. This information can then be compared against the checklist to select the most suitable residence.

  1. Reserve the Right Project, Choose Your Preferred Unit, and Sign the Contract. Contact the sales staff or agent to reserve the desired unit. If it is a completed project, buyers can reserve and sign the contract immediately if they are ready to pay in cash, or they may schedule to sign the contract later if they need to apply for a home loan. For new projects that are still under construction, the project will schedule a time for buyers to sign the “Sale and Purchase Agreement” once construction has progressed to over 80-90% or when it is completed and ready for occupancy.

The Sale and Purchase Agreement signifies the mutual intention between the buyer to purchase the property from the seller and includes a deposit as a guarantee that a sales contract will be executed, clearly stating the timeframe for the transfer of ownership. At the same time, it indicates the seller's intention not to sell the property to anyone else during the specified period in the agreement. If either party breaches the contract, they will be held accountable under the law and the conditions specified. Buyers must thoroughly check the details in the Sale and Purchase Agreement, including the parties involved, the property details, the deposit amount, and the sale price. The agreement must specify the transfer date and outline the costs each party is responsible for, as well as the conditions in case of a breach of contract.

When the buyer and seller are ready according to the conditions in the agreement and the transfer of ownership deadline arrives, they will proceed to sign the “Sales Agreement” in front of officials at the land office in the area where the property is being sold to legally transfer ownership to the buyer.

  1. Understand Interest Rates Before Deciding to Borrow. Researching and understanding housing loan interest rates will help borrowers choose campaigns that align better with their financial plans, categorized as follows:
  • Floating Interest Rate is an interest rate set at the time of the loan but allows financial institutions to adjust the rate up or down based on liquidity in the financial system or the bank's cost of funds, without specifying when or how many times it can be adjusted per year. This adjustment will affect the amount the borrower has to pay per installment.

The floating interest rate is referenced against the long-term loan rate for prime borrowers, which serves as the minimum interest rate or MLR (Minimum Loan Rate), with variations depending on each bank. This type of interest rate is advantageous if rates decrease, as it will lower the monthly loan payments. Even if the actual payment remains the same, the excess funds can be used to reduce the principal more effectively.

  • Fixed Interest Rate has the advantage that if interest rates rise, the borrower will not have to pay increased interest. However, if interest rates decrease, the amount of interest the borrower pays will not decrease, resulting in higher interest payments than necessary. This can be further categorized into three types:
  1. Fixed Interest Rate for the Loan Term will have a fixed rate determined at the time of borrowing, usually based on the interest rate announced by the financial institution at the time of borrowing, and this rate will remain fixed until the loan term ends, resulting in consistent monthly payments.
  2. Fixed Interest Rate Only for the Initial Period will set a fixed interest rate only for the initial phase of the loan term, such as the first 1-5 years. After this period, the interest rate will switch to a floating rate.
  3. Fixed Interest Rate with Step-Up in the Initial Period will set a fixed interest rate for the initial phase of the loan term, with a fixed rate that varies in steps, such as a fixed rate of 3% for the first 1-2 years and 3.5% for the third and fourth years, after which it will switch to a floating rate.
  • Fixed Rate with Periodic Adjustments will have a specified period for adjusting the interest rate, with each adjustment based on the loan interest rate and bond costs, considering the current financial conditions and the financial institution's costs. For example, adjustments may occur every 5 years, with a fixed rate during each period. The advantage is reduced risk from short-term interest rate fluctuations, while the downside is that if interest rates rise, the monthly payments may increase.
  • Mixed Interest Rate combines a fixed interest rate with other conditions set by the financial institution. In addition to allowing a floating rate after the specified period, some banks may set a cap on the floating rate to prevent it from exceeding a predetermined upper limit. This type of loan often starts with a low fixed rate to attract borrowers. If borrowers can repay during the low-interest period, they can quickly reduce the principal. However, once that period ends, the interest rate may increase rapidly.
  1. Prepare Documents and Contact the Bank to Apply for a Loan. After securing a satisfactory housing loan promotion, contact the bank to inquire about the loan amount, interest rates, maximum loan term, monthly payments, and various conditions such as mortgage fees, fire insurance, or whether life insurance is required to receive special interest rates. Once sufficient information is gathered, borrowers should prepare the necessary documents as specified by the bank.

After the loan application process is completed, a representative will contact you to inform you of the loan approval results. If the loan is approved, the borrower must schedule a meeting with the representative to sign the loan agreement and mortgage agreement, as well as schedule the legal mortgage transaction at the land office to transfer ownership and register the mortgage. Once all steps are completed, the bank will provide a cashier's check for the borrower to pay the project and begin monthly payments to the bank.

Tips for Successfully Preparing to Buy a Home in a High-Interest Era. While the economic situation and high-interest rates may create hesitation for those looking to buy a residence, there are positive factors from government measures and special promotions from property developers that make homeownership more accessible. This is a great opportunity for financially prepared individuals or those with sufficient savings. DDproperty recommends ways to prepare for buying a house/condo in a high-interest era, helping you make a valuable purchase and paving the way for confident homeownership.

  • Assess Your Financial Readiness. The key to buying a house/condo is that consumers must first ensure their financial planning is stable. Establish good financial discipline from the start by creating a systematic income-expenditure record, saving money for a down payment and emergency funds, and trying to pay off existing debts to increase financial liquidity. This will help determine their ability to make monthly payments and allow them to calculate the maximum loan amount they can expect to receive. Borrowers should aim for expenses not exceeding 40% of their income and practice making monthly payments by deducting the actual payment amount for a continuous period of 3-6 months to assess their preliminary financial readiness for purchasing a home at this time.

Additionally, consumers can apply for “Pre-approval for Home Loans” with the bank to assess their financial status and repayment ability, which will consider the selling price of the house/condo indicated by the loan applicant, along with their income-expenditure records and creditworthiness, such as their financial history with credit bureaus. If the pre-approval is granted, it indicates a higher chance of loan approval. However, if it is not approved, it is advisable not to proceed with the purchase at this time, as applying for a loan later may result in losing the reservation fee, down payment, or incurring penalties for breaching the agreement with the project.

  • Calculate Long-Term Interest Rates. For tips on choosing a loan, if opting for a floating interest rate, it is advisable to choose a period when loan interest rates are likely to decrease, which can be monitored through global and domestic economic conditions and forecasts from analysts. This will reduce the interest amount the borrower has to pay. Conversely, if interest rates are expected to rise, borrowers should opt for fixed-rate loans for at least 3 years. Although the average rate for three years may be higher than a floating rate, it helps mitigate the risk of rising floating rates due to economic conditions at that time.

The best way to compare interest rates is to average the rates of each loan over the entire loan term, adjusting them to an annual interest rate for easier comparison. Borrowers should primarily consider the average interest rate for the first 3 years to determine which bank offers the lowest rate. After completing the first 3 years, they can apply for a rate reduction with the same bank (Retention) or refinance with a new bank. This approach can significantly save on interest costs.

  • Choose Projects Built at Original Costs. Recently, property developers have had to raise housing prices to align with rising costs. However, many projects are still being sold at original costs without price increases, making them an attractive option for those looking for housing. This allows buyers to acquire homes/condos with good construction standards and quality at lower prices than newly launched projects. Additionally, some developers are focusing on clearing existing stock to enhance business liquidity, leading to interesting promotions and marketing campaigns to boost sales.
  • Enhance Value with Government Measures. After the Cabinet approved additional measures to stimulate the real estate sector in 2024, it presents a great opportunity for real demand buyers to consider purchasing projects that meet government criteria, making home/condo purchases more worthwhile. These measures include:
    • Reduction of registration fees for rights and legal transactions for residences, lowering the transfer registration fee from 2% to 0.01% and the mortgage registration fee from 1% to 0.01% for residential purchases priced below 7 million baht and mortgage amounts not exceeding 7 million baht per contract from now until December 31, 2024.
    • The Happy Home loan project by the Government Housing Bank offers a fixed interest rate of 3% per year for a period of 5 years, with a maximum loan amount of 3,000,000 baht and a maximum loan term of 40 years.
    • The Happy Life loan project by the Government Housing Bank offers an average interest rate of 2.98% per year for the first 3 years, with a minimum loan amount of 2,500,000 baht.
    • The GSB Home Loan for the People project offers an average interest rate of 2.95% per year for the first 3 years, with a maximum loan amount of 7,000,000 baht per borrower.
  • Get a Home/Condo as Promised When Buying a Ready-to-Move-In Project. Choosing to buy a completed residence ready for occupancy is an attractive option for buyers, as they can see the actual condition of the property and verify its quality immediately. Additionally, buyers can apply for bank loans in the campaigns they are interested in at that time without waiting, unlike purchasing projects still under construction, where interest rates may change from what was anticipated.

Another consideration is that when buyers place a reservation and down payment for projects still under construction, they may face risks from construction delays or project suspension if they do not pass the Environmental Impact Assessment (EIA) approval, as some projects may be sold while awaiting EIA approval, posing risks to buyers later on.

Moreover, purchasing ready-to-move-in projects often comes with furniture and various amenities, including common areas and security systems, which will enhance buyers' confidence in envisioning their future living situation. Importantly, they will receive valuable promotions from both developers and banks offering loan promotions and marketing campaigns that cater to home seekers. DDproperty has also launched its latest campaign, the “H.O.M.E. Campaign”, in collaboration with leading Thai developers, spearheaded by Origin Vertical Corporation, a subsidiary of Origin Property Public Company Limited, and Britannia Public Company Limited, showcasing quality homes/condos in prime locations that should not be missed, allowing everyone to become owners while choosing a welcome gift for their new home from the following options:

      1. Home: Receive a 30,000 baht voucher from NocNoc, an online home goods and services center, allowing you to shop for home decoration in your preferred style.
      2. Organise: Free! Receive an additional 1 year of common area fees (valued at up to 30,000 baht).
      3. Manage: Free! Receive agent services from DDproperty to help you find tenants more easily (commission paid up to 30,000 baht).
      4. Experience: Free! Get exclusive feng shui advice for your home/condo from leading Thai feng shui masters (valued at up to 30,000 baht).

Interested individuals can easily own their dream residence while receiving these special offers by simply registering to purchase a house/condo participating in the campaign and transferring ownership by August 31, 2024 for projects by Origin Vertical Corporation and by November 30, 2024 for projects by Britannia Public Company Limited only! This exclusive offer is limited. For details and participating projects, visit https://homecampaign.ddproperty.com or look for projects with the red H.O.M.E. ribbon on the DDproperty.com.

About DDproperty

DDproperty is Thailand's number one real estate platform, part of the PropertyGuru Group (NYSE: PGRU), a leading real estate technology company in Southeast Asia. DDproperty has transformed the way people search for homes into an online platform, helping Thais confidently buy, sell, rent, and invest in real estate.

Currently, DDproperty is a leading real estate platform trusted by home seekers and other property seekers, holding over 62%* market share in Thailand. For more information, visit www.DDproperty.com; www.PropertyGuruGroup.com, and our social media channels including Facebook, Instagram, YouTube, and LinkedIn.