Get a loan to build a house on your own land
Last updated: 7 Aug 2025
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Building a home for yourself involves many processes, which differ from buying land and building with a loan. This includes understanding the construction process (basic) to oversee the project, design, water and electricity systems, etc. Important considerations include:
- Budget management, poor budget allocation, and overruns.
- Details: Construction periods may be extended due to obstacles encountered.
All of this requires experience and expertise in planning and assessing the readiness to manage major projects to determine whether this method of building is truly suitable for you.
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Taking a home loan with a bank
Similar to a home loan, a lump sum loan is taken from a bank to purchase a home. However, a home loan is a bank loan, where the bank pays the borrower the money to pay the contractor in installments. Bank loans for home construction can be categorized into two groups based on the customer's purpose: (1) Building a home on your own land, borrowing solely for the construction of the home; and (2) Buying and acquiring the land and building the home simultaneously. The two may have slightly different processes, including land acquisition and land acquisition.
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Steps for a home loan with a bank
1. Prepare a house plan/Contact a contractor
Of course, before applying for a loan with a bank, the officer will want to know the house design and details of the plan. There are several ways to obtain a house plan: search for free plans online and contact the owner to sign them, or hire an architect to design and draft the plan. This method will produce a custom-made home with customized functions, but will be more expensive than finding a pre-fabricated plan. Then, apply for a building permit for the house plan at the Land Department or the relevant district office (unless the application is illegal).
Another important requirement for the bank is a contractor's contract. A home loan requires proof of actual employment and actual contracting before the bank can approve the loan and release the installments.
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2. Prepare the loan application documents with the bank/Choose a bank
For those planning to build a home, the first thing to do is choose the bank to apply for the loan. Review their policies and promotions to calculate home loan interest rates, fees, and other relevant terms and conditions. Currently, many banks offer promotions or home loan products with fixed interest rates for the first three years (low installments). Examples include the Government Housing Bank, Krungthai Bank, Siam Commercial Bank, Bangkok Bank, and UOB. If you choose a bank, you can plan your finances and proceed with other actions.
This step involves submitting the documents from Step 1 to the bank for a home loan. Home loans feature low interest rates, averaging 6.5%, and long repayment terms of 30 or 40 years. Other documents required for a home loan are similar to those for a home loan, including:
- Identity verification documents: Copy of ID card, copy of house registration, divorce certificate, name change certificate (if applicable)
- Income documents: Employees with regular payslips for the past 6-12 months, income certificate
- Collateral documents: or documents from Section 1. Contractors must write a detailed contract outlining the expenses and amounts for each installment. The bank will pay the loan in installments.
___________________________________________
3. Prepare a reserve fund
Reserve 40-50% of the project value. A home loan requires a substantially more financial planning and preparation process than purchasing a home. This is especially true for land purchases, as banks are unlikely to grant the full loan amount. The maximum loan amount is 50-80%, and in some cases, 80% of the appraised value.
It can be seen that home construction loans differ significantly from loans for land and buildings. In some cases, home construction loans allow for a 100% loan with no down payment required. In other cases, condo purchases require additional funds. However, home construction loans differ. The bank does not provide a lump sum payment, but rather a series of installments. Therefore, it is crucial to have a reserve fund in place in case additional funds are needed during construction but the bank's installment payment schedule has not yet arrived. Therefore, having a reserve fund of 40-50% of the home's value will help prevent financial problems and ensure smooth construction and completion on schedule.
___________________________________________
Thank you for the article source: Real Estate Information
- Budget management, poor budget allocation, and overruns.
- Details: Construction periods may be extended due to obstacles encountered.
All of this requires experience and expertise in planning and assessing the readiness to manage major projects to determine whether this method of building is truly suitable for you.
___________________________________________
Taking a home loan with a bank
Similar to a home loan, a lump sum loan is taken from a bank to purchase a home. However, a home loan is a bank loan, where the bank pays the borrower the money to pay the contractor in installments. Bank loans for home construction can be categorized into two groups based on the customer's purpose: (1) Building a home on your own land, borrowing solely for the construction of the home; and (2) Buying and acquiring the land and building the home simultaneously. The two may have slightly different processes, including land acquisition and land acquisition.
___________________________________________
Steps for a home loan with a bank
1. Prepare a house plan/Contact a contractor
Of course, before applying for a loan with a bank, the officer will want to know the house design and details of the plan. There are several ways to obtain a house plan: search for free plans online and contact the owner to sign them, or hire an architect to design and draft the plan. This method will produce a custom-made home with customized functions, but will be more expensive than finding a pre-fabricated plan. Then, apply for a building permit for the house plan at the Land Department or the relevant district office (unless the application is illegal).
Another important requirement for the bank is a contractor's contract. A home loan requires proof of actual employment and actual contracting before the bank can approve the loan and release the installments.
___________________________________________
2. Prepare the loan application documents with the bank/Choose a bank
For those planning to build a home, the first thing to do is choose the bank to apply for the loan. Review their policies and promotions to calculate home loan interest rates, fees, and other relevant terms and conditions. Currently, many banks offer promotions or home loan products with fixed interest rates for the first three years (low installments). Examples include the Government Housing Bank, Krungthai Bank, Siam Commercial Bank, Bangkok Bank, and UOB. If you choose a bank, you can plan your finances and proceed with other actions.
This step involves submitting the documents from Step 1 to the bank for a home loan. Home loans feature low interest rates, averaging 6.5%, and long repayment terms of 30 or 40 years. Other documents required for a home loan are similar to those for a home loan, including:
- Identity verification documents: Copy of ID card, copy of house registration, divorce certificate, name change certificate (if applicable)
- Income documents: Employees with regular payslips for the past 6-12 months, income certificate
- Collateral documents: or documents from Section 1. Contractors must write a detailed contract outlining the expenses and amounts for each installment. The bank will pay the loan in installments.
___________________________________________
3. Prepare a reserve fund
Reserve 40-50% of the project value. A home loan requires a substantially more financial planning and preparation process than purchasing a home. This is especially true for land purchases, as banks are unlikely to grant the full loan amount. The maximum loan amount is 50-80%, and in some cases, 80% of the appraised value.
It can be seen that home construction loans differ significantly from loans for land and buildings. In some cases, home construction loans allow for a 100% loan with no down payment required. In other cases, condo purchases require additional funds. However, home construction loans differ. The bank does not provide a lump sum payment, but rather a series of installments. Therefore, it is crucial to have a reserve fund in place in case additional funds are needed during construction but the bank's installment payment schedule has not yet arrived. Therefore, having a reserve fund of 40-50% of the home's value will help prevent financial problems and ensure smooth construction and completion on schedule.
___________________________________________
Thank you for the article source: Real Estate Information
