Mortgage Default Factor of Customers in Residential Real Estate Companies: A Case Study from N.C. Housing Public Company Limited and Origin Property Public Company Limited

Abstract

          Housing loan is a credit to the individual or group of persons for residential procurement with land and/or building being mortgaged as collateral. Which has several objectives including loans for refinancing from financial institutions or banks. Not only mortgage default factor of housing loans from financial institutions but also solutions for people who were rejected housing loans from the financial institution and how to prepare themselves for housing loan applications are very important for those who need a residence. There are many factors that are considered for housing loan approvals, whether external factors or internal factors. The external factors such as macroprudential policy which set the loan ceiling and down payment (Loan to Value; LTV) from bank of Thailand, policy from financial institution. The internal factors which are from borrowers such as age, educational background, revenue, etc.
         From the study, the result discovered eight factors that affect housing loan approvals. Which is revenue does not qualify, the source of revenue is unclear, debt overload, bad credit bureau history, age, educational background, and occupation stability. The main factor of mortgage default is debt overload which conforms to secondary data from Townee Pinklao-Donwai project buyers of N.C. Housing Public Company Limited and Pause ID Condo project buyers of Origin Property Public Company Limited.
To summarize the study result, housing loan default factors mainly caused by the borrower. Naturally, If the borrower is denied credit from financial institutions, if the borrowers do not prepare themselves for financial discipline, savings, account transparency, including self-assessment and how to choose a place to suit your needs. Therefor borrowers should plan ahead in order to prepare themselves for the housing loan application.