Budgeting for a home purchase: what money to prepare besides the price of the house

1. Add up the lump sums before buying, and ask clearly who pays

Separate the reservation money, the payments under the contract and the amount due on transfer day. Check which part of the price the money already paid is deducted from, and do not count it as a cost twice. Ask the seller and the lender for a written breakdown of costs, stating who is responsible for each item.

Fees, taxes, mortgage registration fees and cost-reduction measures may depend on the property type, the buyer’s conditions, the value and the date of the transaction. So ask the Land Office and the bank for estimates for your actual case, and do not treat figures from old articles or word of mouth as the amount for transfer day.

• The difference between the purchase price and the loan amount actually approved
• Appraisal fees, processing fees and collateral-related costs under the loan offer
• Items the seller has agreed to pay, and the conditions under which that entitlement changes

Sources: Bank of Thailand: Housing loans

2. Work out the monthly budget from life after you move in

In addition to the loan installment, add common area fees, water and electricity, internet, travel and the household’s other regular expenses. A cheaper house that is farther away may increase your travel costs. Try filling in the costs of two candidate houses in the same way, and look at the money left at the end of the month instead of looking only at the installment.

If the loan has a variable interest rate, ask for a table explaining the promotional period and the period after it. Compare the payments and fees over the whole period for which you intend to keep the loan. Ask how the payment is calculated when the reference rate changes, so you can assess how much uncertain income or higher expenses would affect you.

Sources: Bank of Thailand: What to compare when choosing a home loan

3. Separate what must be done right away from what can wait

Before buying furniture, try writing a list of what is necessary to move in, such as repairs found during inspection, cleaning, moving or basic equipment. Then separate out the decorations and improvement work that can be done gradually. Ask for quotations for big jobs before you decide to buy, especially for a second-hand house whose asking price does not include reconditioning.

Keep a reserve fund separate from the home decoration budget. The right amount depends on your income, your debts and the people you support. Try simulating a period when income falls or an emergency expense comes up, and see whether you can still carry the cost of the home. Using up all your savings on transfer day may leave your plans afterward too tight.

4. Use a single table before you decide to reserve

Make one set of the table for each house, stating the estimated amount, the source of the figure and the payment deadline. For any box you do not yet know, write “to be confirmed” instead of zero, so that the total budget does not look smaller than it really is.

When a major amount is still unconfirmed, such as the loan result or a big repair bill, discuss the reservation terms and what happens if the plan cannot go ahead before you pay. Keep the quotations and loan offers you compared, together with their dates, because the details may change before the day of purchase.