Q: I’ve been in Japan for 3 years now, and am on a specialist in humanities visa. I’d like to buy a home, but I’ve heard that it can’t be done without Permanent Residency. Do I have any options?

A: Until a few years ago it was virtually impossible for a foreigner to get a mortgage without first getting Permanent Residency. Fortunately, things are beginning to change and at the time of this writing there are a few firms willing to lend to foreigners living in Japan who don’t have a Japanese spouse or Permanent Residency status.

To increase your chances of attaining a loan, you should observe some simple guidelines. A mortgage is more likely to be extended on your primary residence than on vacation property. The theory is you’re your mortgage payments will replace your monthly rent costs. Mortgage providers also want to see stability of income. If your income is erratic or decreasing over a two or three year period then your chances of receiving a loan diminish. Another point relates to how large your monthly mortgage payments are relative to your income. Your monthly income must be comfortably sufficient to cover your monthly mortgage payments.

The minimum required down payment for a mortgage is usually 15% to 20% of the total purchase price. Under some circumstances a down payment can be as small as 5%, but this is not available to everyone and additional fees are often applied.

Some institutions will now allow foreigners to receive a mortgage without having a Japanese guarantor. You will however need to list a Japanese national to act as a point of contact should the lending institution be unable to reach you because you are outside of Japan.

By applying for a mortgage through Objective Trading, clients receive a significant discount on the total establishment costs by virtue of our relationships with lending institutions.

Money Matter Q&A