Buying a house in Japan.

[Tomthumb16]

Hi Everyone,
I'm sure this may has been discussed on the forum before but I can't seem to be able to find it.
Anyway, I'll get straight to the point, is it true that,A:You don't need a permanent residence to apply for a mortgage?
B:Bank require you to pay down 10-15% of the down payment up front?
I know there a lots of variables to these questions, but in your experience what has the case been?
TIA.

[RetireJapan]

You can get a mortgage without PR, but fewer banks will deal with you and you will probably pay a higher rate (you can renegotiate after getting PR).

I got a 110% mortgage (with PR and a stable job) so your mileage will vary. Worth talking to a few banks to compare. I found the best were the smaller regional banks (ended up going with Shonai Bank, based in Yamagata).

At some point I will get around to writing the RetireJapan Guide to Mortgages, but it is taking me a loooong time

[goodandbadjapan]

Hi - I got PR without a mortgage (although rate not as good as it would have been - they agreed to bring it down as soon as I got PR and did so).

I did put something down as a downpayment but don't think it was 10-15% and am almost sure to wasn't a requirement.

[Tomthumb16]

Thanks for the quick response guys.
One other question did you guys need a guarantor?Or do they ask you to pay extra for a guarantor company like they do with renting apartments here.
My wife and I are both foreign nationals so the option of asking the in laws to guarantee it...is not a option.

[RetireJapan]

Don't think I needed a guarantor. My memory is not great though, and I did spend two hours signing papers at one point...

[goodandbadjapan]

I remember needing a guarantor when I rented but don't recall about buying. I think I probably did what with not having PR etc.

[ricardo]

A: Yes
B: No

But... it massively helps to have PR, a decent deposit (I put down 40%, they lent me the other 60%) and a Japanese guarantor.

They key issue is how much you want to borrow in relation to your stable employment income

[Petronius]

I am through the process of getting a loan and buying a place in Tokyo so I have direct recent experience.
I have applied for PR last November but have not received it yet. I am therefore getting a loan without PR

I just got a 35 years loan from SMBC for 80% of Mansion+renovation costs, also equal to 90% of the mansion price. Total cost Mansion+renovation is 5200man.
I am therefore bringing a 20% down payment of the total + the transaction fees (6.5% of the mansion price)
The rate is 0.53% floating or 1.6% fixed, no penalty for early repayment
I plan on paying it back in 10 years but it is nice to have the option of smaller payments if needed. 10 years fixed offer is 1.35%

MUFJ did not want to give me a loan, Prestia would only loan me 80% of the mansion (excluding renovation costs).
Also checked with a small local bank who refused me the loan.
2 factors required with SMBC: I have spend more than 5 years in Japan (though not continuously) and my Japanese is good enough that I could go through all the process in Japanese only.
My real estate agent also approached the bank for me.

Other factors that might have influenced the decision (or not):
- My agent is a famous enough company and I was introduced directly to the director by a common contact.
- I have an MBA from a famous Japanese university
- I am a director in a subsidiary of my company, my company is listed
- I have a point based HSFP Visa with fast access to PR

Against me, I have only been with my current company for a year. I was living abroad for a year in 2017 and came back to Japan at the end of 2017. I was in Japan for 6 years straight before that, and 10+ years in total.

Hopefully that gives you one data point.

[Tomthumb16]

Thank you for offering such a detailed review of your process.
I have also been here for 13 years, my Japanese is fluent,I run my own business which is currently 4years + old(it's not listed tho.)
My best option may be to use Seibu Shinyo Ginko...they are the same bank that loaned me the money for my current business.
If I can ask you one other question,if you do decide to pay it off within 10 years is there any penalty payment in this case(raise of interest rate etc etc)??
TIA.

[TokyoWart]

My experience getting a mortgage in 2001 was very difficult. I did not have PR but had live in Japan for 5 years with a good job and income. Every bank refused me until my company essentially stepped in and guaranteed the mortgage but even then the maximum term they would allow was 15 years. In 2007 the bank agreed to release the company from the guarantee. I was interested in paying it off as quickly as possible (remember what was happening in financial markets in 2007) and while my bank did not apply any pre-payment penalties they did not want me to make frequent additional payments so we settled on one large additional payment each year and I completed payments in 2012.