Home loan possible for retiree?

[Snoochibear]

I'm a Japanese resident with significant retirement income. I currently work part time as well, but so far SBI Shinsei and SMBC Prestia where I have accounts with have told me I can't get a home loan if I don't have "full-time" employment. Anyone else able to qualify for home loan in Japan with retirement income?

Appreciate hearing anyone's opinion, insight or experience.

[RetireJapan]

Anyone else able to qualify for home loan in Japan with retirement income?

Not that I have ever heard of. For a residential mortgage you will likely need to be in full-time employement for at least 1-3 years with an employer the bank approves of.

Or be self-employed with several years of tax records, etc.

[northSaver]

Is it the source of the income that's the problem, or the age of the applicant? I'd have thought that pension income in particular is just as safe as employment income. Investment income, maybe less so. I think a bank would require you to take out an insurance policy that pays off the loan in the event of your death, so as long as that is affordable for the applicant (could be expensive for a retired person) then what's the problem?

(sorry, no actual experience with this, just expressing my thoughts)

[Tsumitate Wrestler]

Is it the source of the income that's the problem, or the age of the applicant? I'd have thought that pension income in particular is just as safe as employment income. Investment income, maybe less so. I think a bank would require you to take out an insurance policy that pays off the loan in the event of your death, so as long as that is affordable for the applicant (could be expensive for a retired person) then what's the problem?

(sorry, no actual experience with this, just expressing my thoughts)

Mortgage loans are all about, secure dependable income in Japan. That means a full-time job for 3 years + usually.

The brokers did not even want to see our current assets when we offered. They only wanted income statements and proof of employment.

[RetireJapan]

I'd have thought that...

There you go again, applying logic to financial transactions in Japan

[Deep Blue]

Mortgage loans are all about, secure dependable income in Japan. That means a full-time job for 3 years + usually.

No, it is about following procedures and not using logic or common sense. Obviously pension income is more secure and dependable than employment income, as you can't get fired from a pension.

OP, I'd check some of the offshore lenders. You will pay a higher interest rate, and it is likely you'll need to take out insurance for the principal amount due to your age but they might be a bit more flexible. Google Japan expat mortgages to start off your hunt - the Singaporean banks used to do this as well as one or two of the Aussies

[Snoochibear]

Loving this forum & so much appreciate everyone's input!

Yes, I also can't understand why employment income is somehow considered more secure than retirement income. I guess the FIRE people living in Japan better take this in consideration if they haven't already purchased a home.

At any rate, we'll inquire at couple of smaller lenders when we get closer to buying. In the end I guess we may need to be ready to buy with cash. So different than the US where you can easily take out a 30 year fixed loan even in your 90's.

[Tsumitate Wrestler]

Loving this forum & so much appreciate everyone's input!

Yes, I also can't understand why employment income is somehow considered more secure than retirement income. I guess the FIRE people living in Japan better take this in consideration if they haven't already purchased a home.

At any rate, we'll inquire at couple of smaller lenders when we get closer to buying. In the end I guess we may need to be ready to buy with cash. So different than the US where you can easily take out a 30 year fixed loan even in your 90's.

Mortgage loans are all about, secure dependable income in Japan. That means a full-time job for 3 years + usually.

No, it is about following procedures and not using logic or common sense. Obviously pension income is more secure and dependable than employment income, as you can't get fired from a pension.

OP, I'd check some of the offshore lenders. You will pay a higher interest rate, and it is likely you'll need to take out insurance for the principal amount due to your age but they might be a bit more flexible. Google Japan expat mortgages to start off your hunt - the Singaporean banks used to do this as well as one or two of the Aussies

I think the reasoning is pretty straightforward. Why train up staff to assess the risk of a loan funded by different income streams when these types of loans would be extremely rare in Japan? 99.9% of your clients are going to want income based mortgages, so that is what you offer. The risks are well known, and the is market well established.

It simply does not make business sense for most banks to offer such products. Specialty offshore banks, who have staff that are already trained to assess these types of risks, offer these services, along with a hefty fee.

[Deep Blue]

Wow. 99.9% - a lovely number, plucked out of thin air? ( I won’t say plucked out of your arse). I guess none of the 21 million non-regular employees in Japan ever want a mortgage to buy a home?

Do you ever talk to real people living in the real world?

You do know that not everyone is seishan with a regular monthly paycheck? Temps, dispatch workers, part timers, musicians, artists, gig workers… none of these has ever crossed your path? Or are they all in the 0.1%?

I didn’t think anyone would choose the merits of the Japanese banking system as their hill to die on but I guess I didn’t see Tsumitate Wrestler coming.

[Tsumitate Wrestler]

Wow. 99.9% - a lovely number, plucked out of thin air? ( I won’t say plucked out of your arse). I guess none of the 21 million non-regular employees in Japan ever want a mortgage to buy a home?

Do you ever talk to real people living in the real world?

You do know that not everyone is seishan with a regular monthly paycheck? Temps, dispatch workers, part timers, musicians, artists, gig workers… none of these has ever crossed your path? Or are they all in the 0.1%?

I didn’t think anyone would choose the merits of the Japanese banking system as their hill to die on but I guess I didn’t see Tsumitate Wrestler coming.

I think you have a habit of taking things rather personally? Banks certainly do offer loans to people with less solidified streams of income, but seldom do large banks deal with these clients.

Rather it is small, or local banks that are willing to take on the extra risk, or devote the time to assessing the loan. Foreigners without PR or varied streams of income, will need to shop around for a bank willing to take on the risk, and often will need a larger down payment.

Underwriting a housing loan secured by pension income is NOT a straightforward task. Why would you expect a bank to take on the risk?