Once you embark on a certain course of action, even if the motivation is basically speculative, matters often progress of their own accord. Though we hadn’t yet secured the plot of land we liked, the fact that for a month it was ours for the taking made us feel strangely possessive of it. It is only a ten-minute bike ride from our apartment, and in the weeks after our visit to A-1 we would drop by just to have a look at it and imagine what a house might look like sitting on it. Sometimes we would address a pressing consideration, such as: What is the Internet capability in this leafy corner of the city? It was a real consideration since our work depends on online access, and one day we asked the carpenter next door, who just happened to be outside puttering around, what sort of access he had. He didn’t, and didn’t seem to know anything about it since he didn’t need the Internet for his work and wasn’t a technophile. While we admired his resistance to the irresistible pull of modern life we also felt slightly taken aback. Were we thinking of moving into the Ozarks?
Later, we met another neighbor who assured us that optical fiber connections were available in the area, but the seed had already been planted. What about the water we’d be consuming from the well we’d have to dig? The carpenter said it tasted terrible and that he only used it for washing, while the other neighbor thought it tasted better than the city water he used to drink. We knew there was no accounting for taste, but that’s quite a gap in perception. The realtor said something about the depth of the wells: that the carpenter’s was shallow and the other neighbor’s much deeper, but that information only made us more confused and obligated to do even more research into the matter. In other words, coming to a decision about the land was going to be even more complicated than we’d thought.
We also had to seriously think about our money situation. It became clear with each piece of information we obtained on the land and on the house we might build with A-1 that our budget was too low, and in the back of our minds we always knew this. The ¥15 million limit was always more theoretical than practical. Though we hadn’t chosen it arbitrarily–it represented all the money we had in various savings and investment schemes in Japan–we had entered into this project more or less in the spirit of research. We wanted to see if it could be done, and though we soon found out it could, the quality of housing that was available at that price wasn’t up to any standard of living we aspired to. Until we actually moved out of Tokyo we had assumed that we never would find anything we could afford because we didn’t want to move, but the earthquake forced us to reassess our priorities, one of which was to live relatively free from financial anxiety. Even before 311 our income had been dropping steadily. Outlets for our writing and translation services had dried up owing to reasons that other freelance writers can describe more vividly than we can, but the truth was that we were spoiled by our lifestyle. We didn’t make much money, but we lived as we wanted and were comfortable. We were also too old for whatever it is you call the “job market.” We have a financial portfolio in the U.S. that we never touch and which should support us in our twilight years without much trouble (as long as the American economy doesn’t enter into full-blown depression, which could very well happen). Moreover, our stash of money in Japan has not grown at all in more than a decade. Whether it’s because of bad exchange rates, the sad performance of the stock market, or the endless zero-interest policy of the BoJ, every investment scheme we’ve attempted here has demonstrated no growth at all, and if Abenomics fails, as we think it will, there’s no telling what will happen to that money. So maybe it’s best to get our savings out of stocks and foreign currency and even Japanese cash and into something useful, like a house. We fully expect to have to work the rest of our lives, and that’s not a problem because we enjoy what we do. We are both healthy and have never had the bad fortune to suffer chronic or debilitating illnesses, so the only sticking point is our abode. Paying rent for the kind of place that’s comfortable enough for our needs is fine unless a financial setback happens, like a serious illness or our main employer going belly up. If we bought a place then we’d at least be guaranteed a roof over our heads. We’re not worried about the nonexistent resale value because we assume we’ll live in the place we buy for the rest of our lives. That’s why it has to be something we really, really want.
But it’s also why we thought we had to pay cash. Constitutionally, we are both averse to debt owing to events that happened in our respective childhoods, and except for a few things that were bought on credit for the sole purpose of establishing a credit history we have never accumulated debt and have always paid cash, even the two times we bought automobiles. However, the decision to pay cash for a home was made on principle: having avoided interest payments we came to believe there was something immoral about them. Now we were faced with a dilemma. If we were to build the home we wanted to live in we would have to either borrow money or dip into our stateside portfolio. Another problem with the former is that several years ago, for strictly academic purposes, we went to a bank in Tokyo to talk about a housing loan. That particular bank was advertising easier terms for loans and we wanted to put their rhetoric to the test. As it happens, there was truth in their advertising. We brought along our financial records and they found them satisfactory enough to grant us a full loan at very low variable interest. However, they would need more information and once we got into particulars there was a snag. The figures we were giving them were for gross income, but in Japan the loan inspection process relies on net income, meaning the amount of money you earn after you subtract expenses. As freelance writers, we deduct practically everything since practically everything is allowed, and because we don’t have kids our tax bracket is relatively high considering how little we actually make, so to reduce that bracket from 15 percent to 10 percent we squeeze every little deduction we can. Unfortunately, that practice left us at a mere ¥5,000 below their annual income requirement. There’s no way they could lend us money.
Since then, our income had dropped even more, what with the recession and the shrinking of the worldwide publishing business. After expenses are deducted we barely made ¥2 million in 2012 (though it’s really low we still pay the highest possible annual premiums for national health insurance). So we knew that no major bank would lend us money, but there are alternatives. Several years ago we were doing research on major home builders and visited one as a couple who was truly interested in their wares. The salesman, of course, wanted to know our financial situation and we were honest enough about that since we figured it would give us an out afterwards, so that he wouldn’t bother us with followup phone calls, but he wasn’t fazed by our pecuniary circumstances. Many of his company’s customers borrowed money through JA, the local agricultural cooperative, and his company could easily arrange a loan for us if we decided to buy one of their houses, land included.
A-1 essentially told us the same thing, though their lender of choice was SBI Mortgage, a consumer finance company that worked as a kind of convenience store for money services. Though housing loans were their main business, they also sold life insurance and other financial products. The interest rate would be higher than that of a bank but not by much, and they offered Flat 35 loans, which were guaranteed by the government housing loan corporation. Considering our income we didn’t think we could qualify for a Flat 35 loan but N at A-1 assured us that we probably could through SBI Mortgage. (It should be noted that SBI Mortgage is not related to SBI the “web bank,” though we thought it was and after hearing about the service mistakenly went to SBI’s home page and filled out their loan simulation forms to see if we qualified. Naturally, we did and after that we kept getting calls from their reps offering us terms.)
In any event, N made an appointment for us at the SBI Mortgage branch in Tsukuba. He and the architect would meet us there and help us out with the application process. We still hadn’t bought the land yet and were still working out how much extra money we would need. Even if we went ahead and applied for a loan it wouldn’t be for the full amount, a strategy that would probably make it easier for us to get a loan, but it was still something we had to think about. N added that while we were in Tsukuba to talk about financing we could stop by the showroom of the housing fixtures company that A-1 uses and look at kitchens and bathrooms. Matters really were progressing beyond our control.
Tags: housing loans