Releasing equity from a Tokyo apartment, years after leaving Japan

“I used to live in Japan. I worked here, and I bought a property to live in. The plan was to stay indefinitely, but then [the 2008 financial crisis] happened. I was in the finance industry, and that changed the whole industry. […] There was a lot of turmoil. So I said maybe it’s time to move back home to the US, and kind of take over the family business.”

“At the time, no. I was thinking of just keeping it and renting it out. Maybe at some point, if we move back to Japan, we could possibly move back in. I do have a property manager. They collect the rent and handle all the communications with the tenants.”

YEN LOANS note Where a borrower holds a Japanese bank account, the monthly payment is collected from it by direct debit. Where they do not, repayment runs through a local property manager (管理会社, kanri-gaisha) and is collected from the property’s management account.

“I looked at selling, but because there’s a tenant inside, there’s a very big gap between the owner-change price, selling with the tenant in place, and the estimated sale price for a vacant property. […] So it didn’t make sense for me to sell at the owner-change price. Might as well just keep the tenant there.”

“Another reason for the equity release is that Tokyo prices have gotten crazy, so I wanted to take the profits and buy elsewhere. So I’m buying in other cities, to diversify.”

YEN LOANS note We lend against a property you already own in Japan, whether or not you live there. The loan can repay an existing mortgage and release the rest as cash, with no sale. It is sized on an independent valuation of the property, and an interest-only period of up to five years is available, with a premium on the rate during that period. Current terms are on our loan terms page.

“No, I have not. But I’ve been attending a Japan real estate forum for a couple of years, and I found out about you through them: ‘There’s this company now that can lend to non-resident foreigners, and they can do equity release.’ Which was me.”

“Equity release is very common in the States. […] And I also have a Japanese company, a godo kaisha, so getting a regular loan wasn’t too big of a challenge. I can get a loan through my company. But just doing equity release… nobody does it. I had heard that almost nobody does it, so I didn’t even try.”

YEN LOANS note You do not need a Japanese company to borrow with us. We lend to individuals, against property held in their own name; property held through a Japanese company is considered case by case. Borrowers do not need to incorporate a Japanese entity, hold a visa or have Japanese residency.

“Very easy. It was more like a US-style mortgage. The intake was very easy, just your assets and all that. And then underwriting, too: you give your personal financial statements, bank statements, US tax returns. I’m used to that style when I get a mortgage in the US. […] Pretty similar.”

“I actually misplaced the original deed, the title document. So we went through the scrivener […] to get a statement showing that I had left Japan, because the scrivener needed to trace my address. And because it was so long ago that I left Japan, all the records were archived. So we had to request the documents from the archive, so that we could affirm that I am who I say I am. It took an extra month and a half, I think. If I had the deed, it would have been much easier.”

“We kind of found that out at the end. I mean, not at the end, but the underwriting was done and approved and all that, and then the scrivener said, ‘Oh yeah, I need to have this document.’ […] We got the documents, thankfully, and everything went pretty quickly after that. First case: don’t lose it.”

YEN LOANS note To register our mortgage, the judicial scrivener needs the original title deed and an owner’s address that matches the property register. If the deed has been lost, the scrivener can confirm your identity instead, for an additional fee and at a meeting in person. If you have moved since buying, records tracing each change of address are needed; for foreign nationals who lived in Japan before 2012, these come from archived alien registration records and can take one to a few months to obtain. If either applies to you, tell us at the start, so the documents can be requested early.

“Yeah, the fees were transparent, the terms were transparent. I forget if I had an English translation or I translated it myself. I think some things were in English; I don’t remember all of them. But in any case, all the explanations of the important points were in English.”

“So, first off, […] the paperwork is ten times easier than going through a Japanese bank. Much, much easier. So much so that even if the interest rate were maybe lower at a Japanese bank, I would consider using YEN LOANS instead, just because it’s so much smoother.”

“For me it was very smooth, even though there was a delay. In terms of all the paperwork and underwriting, it was very, very easy. […] No, just on my end: to have all the property title transfer information ready to go. That’s the biggest issue.”

“It’s exactly what I wanted. My first option was to just sell the place, but because I couldn’t, the option was equity release.”