What to look for when buying a house in Taiwan?

[Toe Tag]

I found this ballpark in another thread.

In Taipei City, mortgages seem to be broken down into 2.5 million chunks. So the first 2.5 million may be a priced at 2.3%, but for only 2 or 3 years. After then, it will rise to, say, 2.5% for the rest of the term.

For you ballpark calculators, this chuck would translate into approximately NT$ 14,000 per month thru the term of your mortgage. I'm being liberal with the figures here, but the important takeaway is that you should expect to shell out approximately 14 G's (NT$ 14,000) for every 2.5 million that you plan to borrow.

Following this rule of thumb, if you plan to finance 5 million bucks, then you should plan to lay out NT$ 28,000. Et cetera, etc.

That rule of thumb appears to be pretty outdated and useless. Either that or my wife's a far better negotiator than I realized. That's a ballpark estimate of monthly mortgage payments based on 2.3% or 2.5% interest rate. As I said, our loans are at 1.325% and 1.85%, so our payments will be substantially lower than that guy figures/d.

Moreover, I thought you wanted to know what percent of the purchase price banks will lend these days in TAiwan, a different question altogether.

As for MLS, I believe you're correct and for some reason Taiwan lacks that great resource that is available in the US.

I like the way the ballpark estimate was phrased. I'd like to hear that same sentence with new numbers for the new interest rates. And I'd love to find a chart of historical mortgage or interest rates.

What are adjustable mortgage rates in Taiwan tied to? LIBOR? (ok, LIBOR was a small joke, I am now told that adj. rates are tied to the central bank of roc rates, maybe that is the one basis here period.)

Again, I agree with your reasoning further above: nobody knows what will happen with housing prices. But I feel the same reasoning applies to interest rates too. I suppose if they get too high the government would face a popular revolt. But if they double then that guys ballpark estimate will become true again. Anyway, they seem to keep their interest rates and exchange rates under control here. Though one PRC missile lobbed over the island might take events out of their hands.

Even at the low rates here, I still think those teaser rates are dangerous. They account for some of the mortgage meltdown in the USA. Maybe accept it, but do the math, and set aside some of the extra cashflow for a rainy day is my advice.

[Toe Tag]

Are there any websites that have a historical graph of housing or rental prices here? Hmmm... maybe for reasons below this would be hard to reliably gather... In USA they also use tax records to analyze this, but even that would be spotty and unreliable in Taiwan.

I am thinking that, because there is no centralized database of selling (or rental) prices, the market is fairly balkanized. I'm not sure what the best strategy is, which companies have the most listings. We know basically what area we need to be in so maybe we should just walk the streets looking for FOR SALE signs. Or maybe RE offices in those neighborhoods tend to have listings in those neighborhoods?

Anyway, my main point is, if the market is balkanized, the market is inefficient. And if the market is inefficient, it means that prices are inefficient. In other words, the time you spend wearing out your shoe leather will be amply rewarded. It will be more rewarded here than it will in an efficient market like the USA with a centralized database. You will find stuff way overpriced and way underpriced, because its inefficient, harder to find, and less picked over.

"There are two fools in the marketplace. The first asks too much. The second asks too little." -Persian Proverb

[itakitez]

I found this ballpark in another thread.

In Taipei City, mortgages seem to be broken down into 2.5 million chunks. So the first 2.5 million may be a priced at 2.3%, but for only 2 or 3 years. After then, it will rise to, say, 2.5% for the rest of the term.

For you ballpark calculators, this chuck would translate into approximately NT$ 14,000 per month thru the term of your mortgage. I'm being liberal with the figures here, but the important takeaway is that you should expect to shell out approximately 14 G's (NT$ 14,000) for every 2.5 million that you plan to borrow.

Following this rule of thumb, if you plan to finance 5 million bucks, then you should plan to lay out NT$ 28,000. Et cetera, etc.

That rule of thumb appears to be pretty outdated and useless. Either that or my wife's a far better negotiator than I realized. That's a ballpark estimate of monthly mortgage payments based on 2.3% or 2.5% interest rate. As I said, our loans are at 1.325% and 1.85%, so our payments will be substantially lower than that guy figures/d.

...

Again, I agree with your reasoning further above: nobody knows what will happen with housing prices. But I feel the same reasoning applies to interest rates too. I suppose if they get too high the government would face a popular revolt. But if they double then that guys ballpark estimate will become true again. Anyway, they seem to keep their interest rates and exchange rates under control here. Though one PRC missile lobbed over the island might take events out of their hands.

Actually, that guy could have been quite conservative, we have a mortgage on 2.5 million, and whereas we were paying 16,000 before the crash, we are paying 11-12,000 now - and yes the rates do seem to adjust slowly, but they are capped related to the central bank, ours was something like 0.1% for 6 months, 0.2% for 18 months and then something like 0.36% for the remainder ABOVE the central bank rate.

This is part of the reason I am pondering saving up the cash required (fingers crossed in two years) and just paying off the mortgage... 6 wan down 250 wan to go!

[Toe Tag]

Having suggested that people set aside money for a rainy day, I should argue the other side. If you pay off your mortgage early, its equivalent to making an investment that pays 1.3 or 1.8%... or whatever your mortgage rate is...

[citizen k]

Having suggested that people set aside money for a rainy day, I should argue the other side. If you pay off your mortgage early, its equivalent to making an investment that pays 1.3 or 1.8%... or whatever your mortgage rate is...

Beats the 0.1% they offer on CD's right now, lol.

[Icon]

I got 2.26 from a state entity and 2.16 from a private bank, on a 70% loan.

By the way, I found out they have -fresh from the oven, the clerk didn't know until she want to a seminar the day before about this product- a house loan insurance -in case you roak and/or are unable to make the payments.

So weird, back home, you need at least fire insurance, life-house loan insurance, and engineering inspection done before the bank forks out a single cent.

I still follow my professors advice: the house is a passive asset, don't look at it as an investment, see it as just a place to live and fill your needs, disposable. Like a car or a fridge.

[TNT]

I still follow my professors advice: the house is a passive asset, don't look at it as an investment, see it as just a place to live and fill your needs, disposable. Like a car or a fridge.

An apartment yes… a house with land.. maybe not

Whats the expression?.. buy land... they don’t make it anymore

[Incubus]

I got 2.26 from a state entity and 2.16 from a private bank, on a 70% loan.

By the way, I found out they have -fresh from the oven, the clerk didn't know until she want to a seminar the day before about this product- a house loan insurance -in case you roak and/or are unable to make the payments.

So weird, back home, you need at least fire insurance, life-house loan insurance, and engineering inspection done before the bank forks out a single cent.

I still follow my professors advice: the house is a passive asset, don't look at it as an investment, see it as just a place to live and fill your needs, disposable. Like a car or a fridge.

So you bought a place? Weren't you asking people where to buy in another thread just a few weeks ago? Congratulations! Care to share your home buying experience like Mother T did?

About the insurance, be sure also to get earthquake insurance. Can't be too careful; this is Taiwan after all.

[Icon]

Not yet. I have been doing the bank rounds to see which one offers a better deal, using a quotation given to me from a property introduced by an excoworker who bought in the same development.

It is a complex of 6 new buildings, some are still under construction. Many people look for investment there but the bank warned me they have to make their own appraisal, which could be lower than the cost of the house.

Say the builders/sellers ask for 4.6 millons, but the bank people say the think is worth 4.2 and that's what they give you.

Bit different from home where people add "value" to have more money for upgrades.

And yes, fire, earthquake, theft coverage is a must. Back home, it is also a requisite.

ps.
Regarding the place itself, it is Danshui, a bit of a walk from the MRT. It's got wide green areas and lovely views. I'm not entirely convinced, even though it is the most accesible I've seen so far, in terms of proce and location, as I would like something a bit closer to civilization and with more amenities, like a supermarket.

[Toe Tag]

I got 2.26 from a state entity and 2.16 from a private bank, on a 70% loan.

Can I accurately summarize by saying that almost all loans are ARMs (Adjustable Rare Mortgages). And that all these ARMs are indexed to the Taiwan central bank rate (got to find the exact term for this). And that all banks get their money there, add their markup, and sign up punters under their terms. Some throw in teaser rates. Do they charge points? Would be interesting to share here the different deals being offered. Though the banks would say they need to charge extra for certain people, or certain houses, and for varying down payments.