Owning a home in Japan is a dream within reach, but without the right financing from Japanese banks, that dream can feel miles away. Mr. LAND bridges the gap and brings your homeownership aspirations within arm’s reach by sharing expert tips that bring the possibilities right to your fingertips.

Metropolis: How does residency status impact the availability of loans for foreign clients in Japan?

ML: The array of available loans and financial institutions ultimately depends on the buyer’s visa status. Those holding permanent residency (PR) can enjoy similar options to Japanese citizens, granting them greater flexibility. However, individuals without PR face limitations. Factors such as marital status, visa type (e.g., specialist), or income level can influence a bank’s assessment. 

Higher salaries or being married to a Japanese citizen (or a spouse with permanent residency status) may offer some leverage such as being able to negotiate a lower down payment. 

Individuals currently processing their PR application are advised to await approval before seeking loans. Nonetheless, exceptions may arise based on the negotiations with the bank.

In unique cases, property issues or hazards—not the borrower—can hinder loan approval. Some banks may reject loans for properties on slopes, cliffs or lacking proper road access. In such instances, it’s wise to consider alternative bank options.

M: What is the typical loan application process for buyers and how long does it take?

The initial step involves choosing the type of loan (such as a regular bank home loan or Flat 35), determining the preferred interest rate (fixed, floating, or hybrid), and calculating monthly payment capabilities and the down payment amount. 

After this, you can apply for pre-approval from a financial institution (one to two weeks), and once pre-approved, apply for the final screening (two to three weeks). After the final screening, a loan agreement, or kinsho keiyaku, can be signed at the bank. The whole process from pre-approval to close and handover typically takes about two to three months. 

As many sellers prioritize pre-approved buyers, we highly recommend obtaining pre-approval for swift property acquisition and to ensure you don’t miss out on your dream home. Feel free to reach out to us for assistance with pre-approval. 

M: Is it possible to have loan solutions tailored to meet the unique needs and financial situations of foreign buyers?

Rather than customizing the loan itself, our approach involves introducing loan options that better suit their needs. Determining the best fit depends on various factors, including whether they have PR and other leverage points such as Japanese language proficiency, savings, and credit history.

After applying for a loan, we advise against taking out additional loans, like a car loan, to prevent complications with approval. Obtaining additional loans after pre-approval for a home loan may lead to difficulties or denial of the home loan due to existing debt.

M: What post-purchase support services are offered for loan management, refinancing, and financial advice for foreign buyers?

Most loans include a group credit life insurance policy, varying by bank and insurance policy conditions, such as death or severe disability not offsetting the loan balance.

Non-residents buying property in Japan must appoint a tax agent, or nozei kanrinin, to manage tax responsibilities. This can be a friend, relative, lawyer, or accountant residing in Japan. We offer tax agent services, including proxy payment of monthly fees. Contact us for details.

M: How can clients leverage currency exchange rates to their advantage when considering loan repayment strategies and managing currency risks?

ML: While we can’t directly control risks, it’s crucial to capitalize on favorable exchange rates. Seizing opportunities in the market, particularly when the yen is weak, is key.

Clients with bank accounts in Japan can strategically exchange currencies into yen, ensuring liquidity for swift property purchases when the time comes. This proactive approach can prepare them for real estate investments while simultaneously optimizing currency movements.

Learn more about how Mr.LAND can help you own a home in Tokyo: Discovering Mr. Land

Mr. LAND

20F Marunouchi Park Building, 2-6-1 Marunouchi, Chiyoda-ku

Main Line: 03-6261-4099

Customer Service Contact: 0120-655-572

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