Last week, FMI held two seminars on investing in Japanese real estate in Taiwan—one in Hsinchu and another at our Taichung office. The main theme of these seminars focused on mortgage approvals for purchasing Japanese property. Why focus specifically on loans? For a long time, there have been various misconceptions in the market regarding buying property in Japan, the most common being that you cannot secure a mortgage for Japanese real estate. This rumor has deterred many investors over the years, but the reality is that FMI's buyers can not only apply for mortgages but also have a strong track record of successful approvals. When loans are rejected, the reasons are frequently personal rather than standard practices in the Japanese real estate industry.

As we have rapidly expanded in Taiwan over the past year, we noticed that some clients with solid incomes and stable finances still encounter difficulties getting their loans approved. Why is this? In reality, Japanese mortgage assessments function as a risk management mechanism. Banks evaluate an applicant's repayment capacity over the next 20 to 30 years, rather than simply assuming a higher income guarantees approval. As a result, clients with seemingly similar profiles can end up with completely different outcomes.

Emphasizing Long-Term Repayment Capacity

Based on our analysis, some applicants fail to secure loans not because of insufficient income, but because banks cannot verify the stability of their income sources and financial structure. I often remind clients that complete tax filing documents, proof of income, and asset verification are just as important as absolute income figures. In other words, if an applicant's income sources are complex or relevant documentation is lacking, it can negatively impact the approval result. For instance, some clients own multiple properties and assume that real estate directly demonstrates financial strength, making mortgage approval easier. However, the issue is that Japanese banks assess overall repayment capability rather than sheer asset scale. If an applicant holds multiple properties but all of them are mortgaged, or if their ratio of personal loans and other borrowings is high, it will affect the review process.

Credit history is also a crucial evaluation criterion. Never assume that occasionally paying a credit card bill late is harmless; once a history of late credit card payments, delayed loan repayments, or other credit anomalies is identified, it can impact the bank's risk assessment of the applicant. To financial institutions, a stable and sound repayment history reflects long-term creditworthiness far more accurately than short-term financial strength.

Are Multiple Properties a Plus?

It is also worth noting that Japanese mortgage evaluations assess not only the buyer's personal qualifications but also the quality and age of the property being purchased. Banks typically analyze properties based on their intended use, location, market acceptance, and future earning potential. Even for the same buyer, purchasing different types of properties—such as primary residences, investment apartments, income-generating real estate, or vacation rentals—can lead to varying loan terms, approval standards, and ultimately different outcomes.

Knowing yourself and your enemy ensures victory in every battle. With years of accumulated experience, FMI understands that successfully helping clients secure loans does not rely on a single exceptional qualification, but rather on ensuring their overall financial situation meets the strict review requirements of banks. We believe many clients may not be familiar with these nuances or only understand them partially. We wanted to host these seminars to help overseas buyers comprehend the evaluation logic of Japanese banks, which is far more important than simply comparing bank loan interest rates. Would ordinary real estate agents or developers tell clients these key insights? Not necessarily—especially since the chances of getting mortgages approved for secondhand or renovated properties are extremely slim, and agents often just urge you to pay entirely in cash rather than taking the time to analyze mortgage strategies. I have always advocated for transparency and openness, and that is what sets FMI apart.