Financing a Tokyo home before the move to Japan

“I’ve worked here before, so Tokyo is already a familiar city to me — it’s always been an option for where I could live. Mid last year my partner and I were thinking about where we could live for the next 5+ years, and Japan/Tokyo was on the list. For both work and personal reasons, I frequently travel to Asia, so Tokyo makes a lot of sense in that regard. And with the weak currency, my savings stretch a little further for a property in Japan (at the time of purchase).”

“So we looked at property in Paris, Amsterdam, Sydney and Tokyo, and in the end we found the best potential home in Tokyo, which is the one I ended up purchasing.”

“Whether I could actually borrow as a foreigner. That’s always a big question, because I know how complicated everything can be in Japan. That’s why I initially only focused on properties where I didn’t need to borrow, just to skip the hassle. However, when I discovered YEN LOANS, I knew it was possible and the service/offer seemingly wouldn’t give me a lot of headache — let’s just go for it.”

“At the beginning I wanted to find a place without borrowing money, and I would have liked to just not borrow. But the more I looked, especially in Tokyo, the more I realized that paying a little more got me something a lot nicer. That’s when I started looking beyond what I’d initially wanted to pay.”

“So I spoke to my agent and said, ‘I know it’s not easy for foreigners to borrow here — in fact, I don’t even know what options I have.’ And my agent very quickly mentioned YEN LOANS. There was an immediate introduction, and that’s when I realized it was possible. I’d prefer the spread to be less, but compared with interest rates in Australia or the US, the mortgage rate even with the spread is still favorable. It’s a rate I’m willing to accept.”

“If I needed to borrow more, it would be a concern as I wouldn’t be sure if the valuation would allow me to get a higher loan. But I am aware that valuations are often lower than market price, especially in a hot real estate market — so if I discover a desirable property, I may have to accept the risk of making offers higher than their respective valuations, but within my personal financial tolerance. In my case, even with the risk, the debt I’m taking on is within my tolerance. In the end, given the valuation, I’m unsure whether the property was at a fair price, but it’s a price I’m willing to pay — and YEN LOANS helped me get there.”

“One of the first things the YEN LOANS team asked me for was a single-sheet form, a quick assessment — the intake form. With that and a rough understanding of my salary vs. repayment schedule, I knew the amount I was seeking to borrow would not be an issue. The intake form quickly verified it, and a pre-approval letter was issued very quickly.”

“Banking systems nowadays keep statements online, and having done my tax filings recently, I knew where to obtain the documents I was required to submit. Having kept an organized archive of my financial records made things easier. The forms are long — never fun to fill out — but with the right documents, and nothing unusual/complicated about my income streams or employment, it was a fairly straightforward process.”

“With express mail services, things arrived in a day or two, and the YEN LOANS team had prepared the return packages for me to send documents back. The only thing I really had to do was sign. The logistical challenge — which was specific only to my case as a frequent traveler — was to work out which country I would be in when the forms were needed. I planned with the YEN LOANS team fairly early to identify the due dates of all signed documents, and worked backwards from there.”

“A digital copy was sent ahead of the physical one, and there was always an English translation of the Japanese copy. When the physical documents arrived, the YEN LOANS team made sure I knew exactly where to sign so there’d be no mistakes.”

“I don’t actually know, because the loan documents and the money were all already figured out. We made sure the money was where it needed to be at least a few days ahead of time. On the closing itself, I don’t think I did anything.”

“I contacted you later that day, like, ‘Hey, it’s all almost done’ — and you said, ‘Oh, we were closing today?’”

“Honestly, I wasn’t really aware of it. I was making an assessment of the company based on the service I was receiving as a potential client. The offerings and numbers were clear. There was a document listing all the fees and costs, and the YEN LOANS team was always available to clarify any questions I may have — the different layers of fees, some fixed, some percentage-based. Wanting to do my own homework, I worked out what I was willing to accept as a cost; it really is my decision.”

“It was a leap of faith, but as a startup YEN LOANS seemed very professional and I wasn’t too worried. Besides, options for foreigners and English speakers are limited: if there’s one company that seems decent and the person I’m dealing with is pleasant to work with, it’s a good option for me to consider.”

“I don’t know if it’s normal or not, but there was a limit on the mortgage duration based on the building’s age. I don’t know how different that would be with a local bank if I were a resident. I’d have liked a 30-year loan, but this is something I can work with. The spread I also wish could be better, but it’s definitely acceptable. The penalty for paying everything off early — there’s a fee, but that’s fairly standard and I was aware of it.”

YEN LOANS note A loan term may not run beyond 50 years from the building’s construction, so an older building shortens the term available. Pricing is 1-month TIBOR + 3.50%, reset monthly. Early repayment carries a fee in the first three years and none from the 37th month. Lending is secured on strata-titled apartments; detached houses fall outside our criteria.

“For a foreigner, it’s challenging for me to figure out how I will be paying my monthly installments. That took a little while to figure out. At the end of the day, I was able to do all of it through my property manager [whom YEN LOANS introduced to the borrower]. As a rental property until I eventually move in, any transaction that takes place happens within Japan under the supervision of my property manager. When there is a rental income, the tenant deposits rent directly to my property manager, and he arranges for all expenses associated with my property from a bank account under his company (with finances/transactions completely transparent to me), and that includes my mortgage payments each month. […] If there was no property manager, I actually wouldn’t know who else I could go to. So if there is some provision on that front for people that do not reside in Japan (i.e. no local bank account), that would actually be extremely helpful.”

YEN LOANS note This is how every YEN LOANS mortgage is set up. A yen mortgage is repaid in yen each month, and most non-resident borrowers hold no Japanese bank account to pay from, so repayment runs through a local property manager (管理会社, kanri-gaisha): the monthly payment is collected from a management account you keep funded from wherever you bank. This borrower lets his property, so the rent covers it; where a property is not let — you live in it, or it stands empty between tenants — you fund the account directly and it works the same way. If you do not already have a manager, we introduce one before your first payment falls due, and the manager’s fee is agreed with them directly — it is not a YEN LOANS charge.