Buying a house next year

[Kiyora999]

Hi everyone,

I plan buying a house next year with my boyfriend (we'll probably be married at that time).

I wanted to ask you some questions about my situation and the difficulty level to get a -good- loan.

1/ I'm a non-Japanese woman and he's Japanese, however I have the highest salary (double than him)

2/ I would have worked 4 years in Japan by then, but only 1,5 year in the same company

3/ I don't think I will manage to get PR at that time even though my salary is good and that I have a Master's degree etc.
However, I expect to get 5 years visa in my next renewal.

We're willing to buy either in Saitama or at the opposite South Tokyo or Kanagawa.
We're looking mainly for new properties or not too old houses.
The goal is to get a loan at approx our current rent price, to get rid of it asap and don't have to worry anymore about paying a rent or loan when we'll retire.

I expect us to pay between 15-25M for the house (at least 3LDK).

Do you think we can manage to get a loan in this condition even though I'm a woman and that they expect me to stop working when I have kids, even though I plan to continue working full-time?
Is it possible in Japan to get the loan divided by 2 and get each of us pay a portion?
Or do I have to put the loan only at my name since I have an higher salary than him?

What kind of fixed-rate can I expect in these conditions?

Thank you in advance for your feedbacks!

[goodandbadjapan]

When I bought my house, I had been in Japan for about 5 years, had been married for about two, and didn't have PR. In other words not that different a situation to you. The only difference was my wife and I ran our own business as opposed to being employed, but the business was less than two years old so not sure if that was preferable or not. We got the loan in my name, because the business was in my name but I'm not sure of you can get it in joint names or not. There are weird rules about even having joint bank accounts so I suspect it might be difficult. Not having PR was a bit of a stumbling block but the bank just made me promise to apply for it as soon as I was eligible. If your job is stable, it should be possible, but perhaps not easy.

[RetireJapan]

1/ I'm a non-Japanese woman and he's Japanese, however I have the highest salary (double than him)
2/ I would have worked 4 years in Japan by then, but only 1,5 year in the same company
3/ I don't think I will manage to get PR at that time even though my salary is good and that I have a Master's degree etc.
However, I expect to get 5 years visa in my next renewal.

We're willing to buy either in Saitama or at the opposite South Tokyo or Kanagawa.
We're looking mainly for new properties or not too old houses.
The goal is to get a loan at approx our current rent price, to get rid of it asap and don't have to worry anymore about paying a rent or loan when we'll retire.

I expect us to pay between 15-25M for the house (at least 3LDK).

Do you think we can manage to get a loan in this condition even though I'm a woman and that they expect me to stop working when I have kids, even though I plan to continue working full-time?
Is it possible in Japan to get the loan divided by 2 and get each of us pay a portion?
Or do I have to put the loan only at my name since I have an higher salary than him?

What kind of fixed-rate can I expect in these conditions?

Thank you in advance for your feedbacks!

Hi Kiyora

PR helps a lot, as does job stability (length of time, seishain). You can combine incomes to some extent. Current Flat 35 rates are just above 1%. If you buy a house from a real estate company they can help you get a loan.

[donpaulo]

I have some questions that perhaps will help us all better understand your decision making.

Why are you choosing a new property ?
How old is "not too old" ?

I ask because in general the Japanese consumer favor new buildings which places a premium on them. Traveling during Golden week is a good way to think about it. Why travel when everyone is going somewhere, when you take a trip on Tuesday and have the place to yourself ?

Going used while not sexy or cool, gets you MORE space at LOWER prices. I prefer more space and am very satisfied with our 77 square meter 3DK at 20% below the asking price which was already marked down because it was used. I cannot make your purchasing decisions for you or your husband but buying new is a head scratcher as far as I am concerned.

Our apt was about 13 years old when we bought it, but hadn't been lived in for about the last 5 years. Before that it was only occupied for part of the time. One of the aircon units was basically unused when we moved in. There was a leak in the roof because I refused to live anywhere but the top floor. However once that was patched its been smooth as silk (knock on wood)

Setting a goal of matching mortgage to rent is a good one, but you are not factoring things such as property tax, insurance expenses and maintenance costs. They were/are significant factor into our decision making process. Add in things like the washer, AC, fridge, hot water heater and it really starts to add up. We just replaced our hot water heater 2 years ago and it was not cheap. Shopping around didn't help much on price either.

So for example my mortgage is lower than the relative cost of rent in our neighborhood. However the property tax is outrageous and only goes higher just about every year. In fact my wife often will not read any letters from the tax folks in the evening as they cause her to become upset and lie awake at night. Its going to get worse too. MUCH worse so be prepared for that.

PR is a hurdle no doubt about it. In fact our regional bank told me to my face that they wouldn't even consider me without one. Shop around, I am sure you can find someone to give you the loan. You fall outside the "normal" parameters, but that doesn't mean you are out of the game. We had great luck with our local credit union.

On to "sharing" the loan. Yes you can share the loan. I think a better way of thinking about it is that you are responsible for the entire loan if your husband fails to pay, with the inverse being true as well. Looking at it as a "half" situation does not mitigate your costs should you divorce or he die or something terrible like that. You are still on the hook for the FULL FREIGHT of the mortgage, shared or otherwise.

If you continue to work and show regular deposits it will improve your hand when you come to re-negotiate in a few years time.

My wife and I co-signed our mortgage, although the business is in my name. I felt she did at least half the work and deserved to have her name on it. Surprisingly she didn't want to do it, but respected my 'western' approach to share and share alike. To this day I am glad we did it as partners. You can choose to have the loan in your name, his name or both. Its really up to you.

We have bank accounts in my name, her name and a shared account. Although the money simply flows around, the bank is somehow assured that being paid from account C is better than from account A. I will shrug and say I have no idea why that is, but that's for them to decide as the agency holding the loan.

You should expect to pay rates higher than better qualified candidates because you fall outside the purview of "futsu" aka normal candidates. When I signed on the dotted line they quoted us a rate higher than futsu japanese couples. I expected the 'discrimination' masked as tai hen aka difficulty. The amount was about 0.2% higher than the standard fixed rate at the time.

Within 5 years we had re-negotiated the rates lower and no doubt will be visiting them again in a year or three.

Its important to shop around. The more applications you try the better your chances at finding the proper lender who values you as a customer. So many banksters these days have lost the personal touch with their customers which is a major reason we went with the credit union. Loan agent A will treat you very differently than loan agent B even when they are from the same company. So if you don't get good "vibes" from someone, go ahead and try another person at the same agency.

best of luck and please try and answer my questions about buying "new" or "not too old".
thanks
dp

I can only speculate on the rates they would quote you. Count on them being higher. I would guess 10~20% higher.

[Kiyora999]

Thank you very much for your answers and sorry for being late.

So from what you say I understand it's always better to have a PR to get a good loan but not impossible without.
Even with it, you don't think it can be difficult to get a loan because I'm a woman? (and that they might think I'll stop working when I have kids and not being able to repay the loan)?

Why are you choosing a new property ?
How old is "not too old" ?

Because I want something without too much renovations to do when moving in. So not too old is something up to 5 years I think, but that still looks clean inside!

So for example my mortgage is lower than the relative cost of rent in our neighborhood. However the property tax is outrageous and only goes higher just about every year. In fact my wife often will not read any letters from the tax folks in the evening as they cause her to become upset and lie awake at night. Its going to get worse too. MUCH worse so be prepared for that.

Do you know where I can check the property taxes for Tokyo, Saitama and Kanagawa areas?

Thank you very much for all the advices!

[captainspoke]

...
... However the property tax is outrageous and only goes higher just about every year. In fact my wife often will not read any letters from the tax folks in the evening as they cause her to become upset and lie awake at night. Its going to get worse too. MUCH worse so be prepared for that.
...

This puzzled me when it was posted, and since Kiyora999 has quoted it, I'll offer my two cents.

We've owned for 25 years or so (single unit, wood-framed house), and our property taxes have only ever gone down.

This, in spite of some neighborhood improvements that have made our place more sellable (if it ever comes to that)--a major loop road went in 12-14 yrs ago, making anyone's commute and access to our place really easy. And as a part of that, they put in a park that's three doors away, and the sprinklers in the road (for snow) start one door away. There's another huge park (several hectares) about 5-700 meters away that was finished after the loop road.

Property taxes are one factor when considering what to buy. This last cycle (spring) we paid ¥55k and change; tax on new construction would be considerably more (4-5 times?). Also, AFAIK, renovation does not change your taxes, so savings on ten years' worth of taxes could go a ways towards improvement costs.

[RetireJapan]

Property taxes are one factor when considering what to buy. This last cycle (spring) we paid ¥55k and change; tax on new construction would be considerably more (4-5 times?). Also, AFAIK, renovation does not change your taxes, so savings on ten years' worth of taxes could go a ways towards improvement costs.

We pay about 60,000 yen a year for our 9 million yen manshon (market price is a bit higher, maybe 12 million?). Paid in installments, not too bad

[Kiyora999]

@captainspoke and @RetireJapan

Thank you very much for your inputs! It doesn't look so expensive in comparison to France, if I find something around that price I would be happy ^^

Property taxes are one factor when considering what to buy. This last cycle (spring) we paid ¥55k and change; tax on new construction would be considerably more (4-5 times?). Also, AFAIK, renovation does not change your taxes, so savings on ten years' worth of taxes could go a ways towards improvement costs.

That's indeed a good amount to consider... So as long as I look for houses in the "Used" category I won't have to pay this tax on new construction even though the house is only 1-2 years old for example?

[RetireJapan]

I believe property taxes are based on the value of the property. They depreciate buildings so a new house is seen as more valuable (higher taxes). Our manshon is 26 years old, so probably fully depreciated now and we're only paying tax on the land.

[captainspoke]

@captainspoke and @RetireJapan

Thank you very much for your inputs! It doesn't look so expensive in comparison to France, if I find something around that price I would be happy ^^

Property taxes are one factor when considering what to buy. This last cycle (spring) we paid ¥55k and change; tax on new construction would be considerably more (4-5 times?). Also, AFAIK, renovation does not change your taxes, so savings on ten years' worth of taxes could go a ways towards improvement costs.

That's indeed a good amount to consider... So as long as I look for houses in the "Used" category I won't have to pay this tax on new construction even though the house is only 1-2 years old for example?

I don't think a 1-2 yr old house will be as cheap tax-wise as our ancient place--it would be almost as much as if it were new. As RetireJapan said, it's based on the property value, and eventually the house part, thru depreciation, is valued at 'zero' and it's the land you're paying taxes on. (I'm unsure of the depreciation schedule.)

*

I'm still puzzled by what's been quoted. I've never heard of property tax going higher and higher every year (and that it will get much worse).

To guess about what's going on, if @donpaulo owns a condo then maybe there's some confusion between taxes and an increasing maintenance assessment (for some coming project)?