Wednesday, April 26, 2017

Buying a house on a low interest rate mortgage in Korea as a foreigner

Probably not many of you know that you can buy a house on a mortgage in Korea. Here are general steps you need to go through to own property in Korea


1) Find a reliable, certified English-speaking realtor.

2) Mortgage loan available for a foreigner : around 55% of selling price
    at 3.5~4.4% interest rate/year.

3) Provide him with your budget and preference for location, house type
    and anticipated move-in date.

4) Pick some houses out of the realtor-provided list where you can see pictures of
    houses and their locations with prices.  

5) Go together to see the selected houses in person for comparison and final decision.
6) Buy without  mortgage : A  fact confirmation certificate of your alien
    registration is required.
7) Buy with mortgage : Seal certificate, proof of employment and a receipt for
    income tax withholding are required.
8) Get together at the realtor's office to review and sign a contract, paying 10% down
    payment at the same time and deciding a date for balance payment and move-in. 
9) Meet again at the office for balance payment and handover of passcode, card keys and
    other accessories for the house, and also final check on the house if there are any
    defects to repair. 
10) Apply for gas, electricity, TV and internet
11) A Judicial Scrivener will take care of all legal documentation job on behalf of you and
      you will receive a registration certificate by a registered mail within 2 weeks. And now
      you are legally and physically the owner of the house.
For info, acquisition tax is 1.1% for apartment and 4.6% for officetel. There are other costs such as registration fee, mortgage application fee and realtor's commission as well. And they vary depending on the house price but the other costs in total are not more than 1% of the house price in general. 
Around 70% of our country's land consists of mountains with residential area that is around 16% only, which indicates that there is always high demands for conveniently located, brand new houses. House prices in Korea have been fluctuating ​ over decades but it has always been upwards in a big picture. So, if you have money that can cover around 50% of your preferred house, it is better to buy one on a mortgage since the house price appreciates a way faster and higher than your salary. Since you have only one house in Korea, if you sell it 2 years after your purchase date, your sale tax will be 100% exempted.
For example, in early 2014, I bought two small apartments located within 10 minutes by walk from a subway station.
X Apt : One bedroom with a big living room and a separate closet, bought at 140 Mil won with around 3 Mil won for tax and other costs. I have had this house rented out on a deposit 20Mil won and 600K won monthly rent since then. So, all in all, the total cost was 143Mil won and my investment was 53 Mil won with 70 Mil won mortgage at 3.6% interest rate. Currently the house is priced at around 195 Mil won(52Mil Margin). I have paid around 7.6Mil won for repayment over last 3 years while my income for the rent over the same years reaches around 21 Mil won. The other Apt is more or less the same as this one.
Most recently, actually yesterday, one of my foreigner customers bought an Apt in HwaMyung at 159Mil won on a mortgage of 85Mil won(3.6% interest rate) with his own investment, 74 Mil won. Two bed rooms, a brand new Apt, 7 minutes by walk from two different subway stations. I hope that he will enjoy the earnings after couple of years as well.  
Please do not hesitate to contact me if any questions.

Ricky Choi
A certified realtor in Busan Korea
Cell: 010-4053-3582


  1. I am a foreigner living in Korea. I recently bought a property, apartment, in Busan. My real estate agent was Ricky Choi. If you are an English-speaking foreigner living in Korea, and you want to buy some property, Ricky Choi is the perfect real estate agent for you.

    First, he is nearly fluent in English. You will have no problem communicating with him in English.

    In my case, I wanted to buy an apartment in Busan. I found his information on the Internet. I contacted him and told him which location I wanted to buy an apartment.

    Within a few days, he sent me a list of (6 or 7) apartments that we could go look at. That Saturday, I met him in Busan and we went to look at those apartments. We spent about 3 or 4 hours, and it was good because I viewed many apartments and had a wide range to choose from.

    The next week, I made my choice and told Ricky which apartment I wanted to buy. Then, he went out contacting banks to find the bank that would give me the best mortgage. He found that 농협 would give me the best mortgage.

    The next weekend, I went to his office in Busan. At the meeting, I met the property owner, the property manager, another real estate agent, and a bank manager from 농협 who was prepared to offer me a mortgage. Of course, all these people spoke only Korean, so I had to trust Ricky to take care of all of the discussions for me.

    At that meeting, we signed the contract to purchase the property and made the mortgage loan application. On the one hand, the process was very complicated, but on the other hand, for me, it was very easy. They just passed me the documents and I just signed where they told me.

    The next week, the mortgage was approved. We set up a meeting to finalize the deal the next weekend. (Of course, in that week, I had to pay the down payment.)

    At that next weekend meeting, there was the property owner, the property manager, the 농협 bank manager, and a lawyer (법무사, judicial scrivener). As always, Ricky was there and dealt with all the conversations in Korean. I just had to sign the documents where they told me.

    At the end of that meeting, the process was essentially over. They handed me the keys to the apartment and I was the owner of the property from that point on. The whole process took a little more than three weeks.

    Ricky took care of pretty well everything that English-speaking foreigners can’t. He dealt with all the pertinent people – property owner, property manager, bank manager, other real estate agents, lawyers – who pretty well all speak, and do business, in Korean.

    So, if you are an English-speaking foreigner living in Korea, and you want to buy some property, Ricky Choi is the perfect real estate agent for you.