Mortgage

Today I signed the contract for my mortgage. Apart from well and truly confirming that I am now middle-aged, why is this significant?

Well, I got it from a big Japanese bank (Bank of Tokyo-Mitsubishi UFJ (MUFG), one of the three megabanks), I’m foreign, and I don’t have permanent residence. According to received wisdom in the expat community here, that should have made it impossible. And yet I signed (strictly, stamped my hanko on) all the contracts today. The money will be there when I buy the flat, I have 35 years to pay it back, and the interest rate is barely over 1%; I got a discounted rate because I only borrowed 80% of the value of the property.

That seems to be the only thing that really mattered; it was the condition that the estate agents passed on when talking about the application.

I am married to a Japanese citizen, and she has signed the guarantor papers. However, as far as I can tell, that was only because we are going to jointly own the flat, and thus I can’t secure a mortgage on it without her agreement. They certainly didn’t require any evidence of her income, which is probably just as well; in the most recent year we can provide evidence for, she earned nothing, because she hadn’t gone back to work. And even now, three days a week part-time wouldn’t pay the mortgage. Indeed, we had to fill the application forms in again, because the initial forms were sent out on the assumption that I would be the sole owner of the flat, so only I signed them. The mortgage contract itself is purely in my name.

I’m also not employed on a massive salary by a major company. In fact, I’m self-employed, and earn less than the average Japanese salary. (Not vastly less, mind you, but less.) I do have three years of stable income from self-employment to show, which I imagine was important. Certainly, they asked for evidence of that, and were quite particular about the form of the evidence.

I’m not aware of any personal connection to important executives at MUFG. Of course, my students sometimes turn out to have surprising connections, but I hadn’t mentioned this to any of them, so I think we can rule that out.

On the other hand, the estate agents said that MUFG was the only bank that would give me a mortgage without permanent residence, and as far as I can tell from their flyers they normally work with the Bank of Yokohama, so presumably there was a problem with them. So, speculating, MUFG may have changed their policy so that they offer mortgages to foreign residents who look likely to stay put, regardless of their current visa status (as long as they have one; I had to produce my Alien Registration Card). It could be limited to people married to a Japanese citizen, but my wife’s involvement appears to have depended entirely on that fact that she will be a joint owner of the flat, so maybe not.

The application process was fairly smooth and painless. As I mentioned, it took a couple of attempts to get the application forms right, and I sent some documents they didn’t want, so I had to send the right ones afterwards. The only personal contact was a phone call from the security company backing the mortgage. It went as follows.

“This is the MUFG mortgage guarantee company. Am I talking to David Chart?”

“Yes.”

“Did you apply for a mortgage of umptymumble yen over 35 years?”

“Yes.”

“Please tell me your address.”

“Here you go: [address]”

“And your date of birth.”

“[Date of birth].”

“Thank you very much. We will take the application forward.”

(My address and date of birth were both, of course, on the application forms; those questions were presumably to confirm that they really were talking to me.)

Obviously, the whole conversation was in Japanese, and the estate agents said that the bank wouldn’t lend money to a foreigner who couldn’t speak Japanese, so maybe that was the most important language exam I’ve ever taken. Fortunately, it was really, really easy. (Thinking about it, no-one at the bank today asked whether I could understand Japanese or read kanji; they just took it for granted. Maybe it’s a formal condition. If so, I don’t know why, nor what their standard for “can speak Japanese” is.)

In any case, the concrete fact is that MUFG has given a standard-terms 35 year 80% mortgage to a self-employed foreigner without permanent residence. If you’re a foreigner trying to get a mortgage in Japan, I suggest giving MUFG a try.