Aside from getting a good career, one of the things we want in life is a decent-sized home in a good location in South Korea, but whenever you actually find a perfect house, you might feel a financial worry because of its price. There are many options when applying for a housing loan in South Korea, even for foreigners. Whether for a long-term or a short stay, there are housing loans for you to make you feel comfortable. Ziptoss has made a guide for you on how and where you can loan for a house deposit.
Housing System
You’ll need to identify the housing system first before going to the bank and applying for a loan. In South Korea, homeowners rent their apartments/homes by using three different methods: Monthly rental, Jeonse, and Half-Jeonse.
- Monthly Rent
The most common method among the three, it’s basically paying rent every month but this method is divided into two. The first is for short-term rentals, this is the most commonly understood method where you can rent from a month-to-month basis or a six-month rent contract with an agreement between a landlord and tenant. The second is more of a long-term rent here the tenant leases for a year or two and can be further extended with proper negotiation with the landlord. Key deposits are required for monthly rents and it may depend on the apartment’s quality, size, and location.
● Key Money Deposit Lease or Jeonse
If you’re living in South Korea for the first time, the method Jeonse might sound unfamiliar to you. Jeonse or Key Money Deposit is where the tenant and landlord agree to a lease of two years minimum only on key deposit payment. The tenant would only have to pay utility bills during his/her stay. This option is suitable for you if you plan on living in South Korea for the next few years.
● Half-Key Money Deposit Lease or Ban Jeonse
This method is a combination of the monthly rent and jeonse method, Ban Jeonse or Half-Jeonse is where a tenant leases for a year or two, depending on the agreement between the landlord and tenant. In terms of payment, the key deposit is lower than the Jeonse method but higher than the monthly rent method, therefore you’ll be paying a higher deposit but a lower monthly rent.
Getting a housing loan
Thankfully, most banks in South Korea provide specific packages for foreigners who are planning to get a housing loan.
Kookmin Bank
Kookmin Bank’s “KB Welcome Plus Jeonse Plan” is a package for foreigners that provides up to 200 million Won for three months to two years, and can be extended by a two-year increase for up to a total of about ten years.
Requirements:
- Your alien registration card must have evidence that you are legally allowed to stay in South Korea for the next 3 months or more and you should be at least 19 years old.
- Have worked in South Korea for at least three months
- You have signed a housing contract through a real estate company and have placed at least a 5% downpayment deposit for the house or apartment you wish to receive a loan in.
- You or your spouse(or fiance) must not own any property or have only one property on hold.
- Visa eligibility for housing loans: A-1, A-2, A-3, D-1, D-2, D-3, D-5, D-6, D-7, D-8, D-9, D-10, E-1, E-2, E-3, E-4, E-5, E-7, F-1, F-2, F-4, F-5, F-6, H-2.
Once you’re ready and if you think you’re qualified, bring the following requirements to the bank if you’re ready to apply for a housing loan:
- Your alien registration card to confirm your validity of staying in South Korea for the next three months or so.
- Residential lease contract that has a confirmed seal and signature.
- Receipt of advance payment made to hold your house or apartment.
- Documentation of confirming your employment and current income in South Korea
- Certification of alien residency
- Marriage certificate if married or about to get married.
- Any additional documentation will be requested depending on your situation.
Shinhan Bank
The housing loan package called “The Dream” (sinhan deodeulim jeonsedaechul – oegug-in) of Shinhan Bank can lend up to 200 million Won with a duration of 3 to 36 months, and can further be renewed later(once agreed to). This package is for non-locals who are eligible for bank guarantees when applying. These bank guarantees can be applied to visa holders that are eligible for housing loans(A-1, A-2, A-3, D-1, D-2, D-3, D-5, D-6, D-7, D-8, D-9, D-10, E-1, E-2, E-3, E-4, E-5, E-7, F-1, F-2, F-4, F-5, F-6, H-2).
Required documents to bring when applying for “The Dream” housing loan package:
- Your alien registration card to confirm your validity of staying in South Korea for the next three months or so.
- Residential lease contract that has a confirmed seal and signature.
- Receipt of advance payment made to hold your house or apartment.
- Documentation of confirming your employment and current income in South Korea
- Certification of alien residency.
- Marriage certificate if married or about to get married.
- Any additional documentation will be requested depending on your situation.
Other Banks
There are also other banks that provide housing loans for foreigners such as Hana Bank and Woori Bank but are not listed on their websites, but if you do visit these banks and ask for a consultation on housing loans, they have similar housing loan packages like the ones mentioned above.
Note: It’s important to visit the bank of your choice at least a week before your contract date to make sure you have all the necessary documents you need to apply for a housing loan. Also, ask about the interest, the housing loan interest rate may vary depending on your choice of bank.