Job change dilemma

[SZQ]

As some of you may know, I got my PR recently and I am in the early phases of buying/building a home. All I have done so far is search online for some properties and visit a few display homes (Mitsui Home, Hebel, etc).

I have been fully employed since I arrived in Japan and worked for the same Japanese company for 4+ years (IT industry). Not the best job in the world but it's stable. Recently I received an opportunity from a much smaller and less stable company offering a 20% pay rise (not huge but significant, my wife doesn't earn much). The company has been around about 8 years but doesn't have much capital, and only has a couple of full time employees and quite a few part timers. They offer full remote work and an English speaking environment which appeals to me.

So the question is, do you guys think it's a wise move to make considering I would need to get a home loan? Having read various posts it seems banks prefer a stable job over higher salary. Would the banks refuse a loan or just increase the rates to mitigate the risk?

I am going to speak to a few more hosuing agents this weekend and ask them but just wondering what this community thinks. Thanks!

[beanhead]

NO. Do not change your job just before applying for a loan.
Many banks require a few years with the same employer. 3 years or 5 years, if I remember correctly.
If the new job looks like it makes sense for you in your career, take it and put off the plan to buy a house/apartment for a while.

[SZQ]

Thanks for the reply beanhead.

Most people are telling me the same although some people say it's more about consistent employment history regardless of the employer if it's in the same industry.

I'm in my early forties so don't really want to put off buying a house any longer. Not sure the timing is great to build new with prices going up so I'll look into second hand houses as well, maybe faster to complete the process. I'll ask the new company if they would be willing to wait a few months but that may be a little too optimistic.

Cheers!

[Moneymatters]

I have to concur it is supposed to be evidence of stable employment/income not necessarily the same employer. but even a year with the new employer might be better than a month before an application..

I also think it's prudent for foreign residents to err on the side of caution if we want to ensure we get the best possible terms.

Now. in terms of the job change. (Ignoring the additional 20%. Which won't be 20% after tax and maybe not be 20% even comparing net to net.).
What else will you have gained from this job within 1-2 years. A company around for 8 years should be OK for the next couple.
Giving up stability for such a small increase should have another payoff that isn't financial. In terms of training, skill dev, exposure, contacts you might make, etc.
The english speaking environ might appeal right now but if you have stagnated / less nihongo jouzuness (that's a word look it up!) that might limit future career moves.

[mighty58]

I have heard, anecdotally, stories of Japanese bankers jumping ship to the likes of Goldman Sachs, doubling or tripling their salaries in the process, but being declined on mortgage applications due to the perception of having a less stable employment. Usually this is limited to recent job changes, where the applicant with no track record in the company is perceived as a higher risk to be unemployed soon. The willingness to loan will obviously depend on the individual bank though.

[SZQ]

Thanks for the replies guys.

We will make a decision this weekend after talking with the property agent. But it seems like the best thing to do is stay at my current job for now, at least until we confirm what we want (in life ).

Another factor buzzing around in my head is that a fully remote job would open up other areas much further away to settle down such as Fukuoka or Sapporo where I think land would be cheaper so we would need a much smaller home loan. But if I lost my job we would be stuck there.

A lot to think about. Unfortunately both my wife and I are indecisive and procrastinate a lot .

Anyway, I appreciate the advice. I guess there's no rush.

[beanhead]

We will make a decision this weekend after talking with the property agent. But it seems like the best thing to do is stay at my current job for now, at least until we confirm what we want (in life ).

Anyway, I appreciate the advice. I guess there's no rush.

As you probably know, most property in Japan is not really seen as much of an investment opportunity. Prices in general, do not go up, as they do in the UK, the US or Australia.
So, if you buy a place, assume that you are living in it for 20 or 30 years. If you are not sure whether you will stay that long, then think again. Of course, the rules of most consumer mortgages also do not allow you to sublet, so the option to rent out a place for a few years here is also not really viable for most people.

I think the job decision is a separate one, personally. Evaluate that on its own merits, with the understanding that if you do move jobs, getting that loan would be very difficult if not impossible.

[SZQ]

Yeah, we have decided to stay here permanently. Receiving my PR was the deciding factor. All things considered, there aren't that many countries I'd rather settle in than Japan, maybe Singapore. Despite my poor Japanese language ability, life here suits me and my wife, and we're getting old so less enthusiastic about trying somewhere new.

So, my future house won't be treated as an investment, just somewhere to live and retire in comfort. But a lot of things to consider such as location, loan amount, future job opportunities, when I want to retire etc.

[eagleyes]

Do not change job before you get a loan. Do it after. Once the loan is signed and the house yours, you can change job as much as you want. Try to ask the company that is proposing you to change if they can hold for some time or you keep a good relationship with them and ask them for other opportunity at later time.

Also, if I may share my personal experience, I do not know if your wife is Japanese or if you have any specific reason to stay here permanently but if not, I would definitely consider carefully about settling permanently in Japan.
Japan can be a very difficult country to live in fact. I love Japan. I visited 1st time in 2004, settle from 2010 but now I am over it and I am planning to go back to Europe. The society is too conservative, not foreign friendly. I would add that I speak fluently Japanese but this has not helped me at all to get the career I would have in another country. My friendly advice is be careful for such kind of cultural setback. It can show up "just like that".

[SZQ]

Thanks for the advice eagleeyes. Appreciate it.

I decided to stay at my current job until the house is sorted. Unfortunately we are still looking. It's a tough process and can be demoralising but we'll keep looking. Maybe need to lower our expectations and compromise a bit more.

My wife is not Japanese but she is Asian. I understand your warning and agree that some things here can be difficult but no country is perfect. I was born and raised in the UK but from an ethnic minority. In the 5 years I've been here I've had far fewer issues than in the UK (I do love the UK though and very grateful to have been raised there).

I am slightly introverted so more than happy to spend time on my own or with my wife only. However, we have made some very good friends here who help us out when we need and we socialise often. I know we'll never be treated like Japanese and I was never under the illusion that we would be, and I'm ok with that. That's another reason why finding a good location for our house is critical. The people and facilities will make a big difference. So we are happy here. Retirement maybe another story though.

Career wise I totally agree. I've pretty much hit a ceiling in my company. Could definitely go higher and earn more in Europe but it's not priority for me. I like having a good work-life balance and the life part here is good for me. Salary is average but to mitigate that I recently registered as a freelancer/sole proprietor (kojin jigyo). So I am doing part time work for the other company that wants to hire me. It's a nice arrangement as I get to choose how much extra I work vs extra income I make, and who knows what it will lead to. I missed the deadline for the blue tax return though so deductions will be less through the white tax return next year.

I'm in my mid-forties now so I really don't want to move abroad again and, with the yen tanking, don't think I can afford to

Everyone's situation is different I guess. I hope your move back to Europe goes well!