Mortgage to buy a house!Explaining the flow of examination, check items and points to prevent failure

Mortgage screening is in two stages

Everyone must pass the screening to get a mortgage to buy a home.

Mortgage loan screening consists of two stages, "preliminary screening (provisional screening)" and "main screening", and is generally carried out according to the following schedule.

1 Advance application

2 Preliminary examination

3 Formal application

4 Main examination

5 contract

There are differences in the application method, examination body, points to be seen, etc. between the preliminary examination and the main examination as follows.

Preliminary examination (provisional examination)

Preliminary screening is conducted by financial institutions, and in most cases, applications are made on the official website of each financial institution. Depending on the financial institution, it may be called "provisional examination" or "simple examination" instead of "preliminary examination", but basically the nature of "preliminary examination" is the same.

The financial institution confirms the approximate repayment ability at the present time based on the information such as the annual income self-reported by the applicant on the dedicated form. If the procedure goes smoothly, you will be able to receive the result email from the day after the application to one week.

Main examination

In the main examination of mortgages that can be applied after passing the preliminary examination, multiple companies such as financial institutions, mortgage guarantee companies, and group credit life insurance companies are the examination bodies.

The points seen in this examination are not only the annual income, but also the asset value of the property you are considering purchasing, the health condition of the applicant, etc.

Two weeks to one month after the application, the result of the main examination will be notified, and at that time, the borrowable amount, interest rate, repayment simulation, etc. will also be sent.

What you need for a mortgage loan

In some cases, a withholding slip is required for the pre-screening of a mortgage, but basically it is often a simple self-assessment.

On the other hand, in this examination, it is necessary to submit some documents, although it depends on whether the occupation is a company employee or a self-employed person.

Basically, if you ask a real estate company for the documents related to the house you plan to buy, they will be ready for you.

What is checked in the mortgage loan examination?

We have explained that the mortgage pre-screening and the main screening are different, but let's take a look at the specific items that will be checked in the main screening.

Based on the results of the "FY2018 Survey on the Actual Situation of Private Mortgages" by the Housing Bureau of the Ministry of Land, Infrastructure, Transport and Tourism, we will tell you in the order in which the examination organizations place importance.

Health

The most important item for mortgage loan conditions is "applicant's health condition".

Mortgage contracts often require that you take out group credit life insurance (group credit), and in the unlikely event of a policyholder, the insurance money will be used for the loan balance. I am.

If you take out life insurance, including group credit, you are obliged to notify you of any illnesses you have had before, and in some cases you will not be able to take out insurance. If that happens, you won't be able to get a mortgage.

Age at the time of borrowing / payment

Due to the size of the loan, mortgage repayments are often long-term, such as 20 or 35 years. Therefore, from the perspective of financial institutions, it is natural to set the age at which the policyholder's loan is paid off.

The age at the time of payment set by many financial institutions is up to 80 years old. Based on this, the length of the mortgage also sets an upper limit on the age at the time of borrowing.

If you are an office worker, it is said that it will be difficult for you to pass the examination from your 40s when the retirement age is gradually approaching, so if you think about buying a house, you should apply as young as possible.

Collateral evaluation

During the mortgage repayment, the mortgage on the property is held by the lender's financial institution. This is because the financial institution sells the property and collects the loan debt when repayment becomes difficult.

In that case, the amount that can be borrowed has a great influence on how much asset value the property has. This is "collateral evaluation". If the house you are considering buying is a second-hand property, the older it is, the lower the mortgage rating.

Length of service

The first thing that the lender's financial institution wants from the policyholder is stable loan repayment.

From the perspective of financial institutions, if you are currently working but quit immediately, it is highly likely that you will not be able to repay your loan. For this reason, mortgage loan screening generally has a standard of "more than two years of service."

However, some financial institutions sell that "the length of service is not a condition of the contract".

annual income

Annual income is also an item that is said to be "the number one reason for failing a mortgage loan examination." If you have a high annual income, it is not easy to pass a loan examination with a high amount of borrowing.

The annual income referred to here is not the high amount but the "repayment ability considering the repayment burden rate for the borrowed amount". In other words, if the amount you want to borrow is not so large, you may pass the examination even if your annual income is not high.

Joint guarantee

If you have a guarantor, it will be a relief for financial institutions for stable repayment. In some cases, the husband is the contractor and the wife is the guarantor, as there is a possibility that the loanable amount will be increased.

Country of Citizenship

Most foreign nationals apply for a mortgage on the condition that they have permanent residence.

Since mortgage repayments are long-term, it is determined that foreign nationals may return home due to visa expiration during the repayment period and may be delayed in repayment.

However, recently, some mortgages are available provided that the spouse of the contractor is Japanese national.

Debt status and repayment history such as card loans

"Personal credit information" is also one of the items to pay attention to when looking at the repayment ability of the applicant.

The delinquency record when using a credit card is checked. If you are paying off other loans such as cars or musical instruments, or if you have a lot of credit cards, you are more likely to be considered "in debt" and disadvantaged in the examination.

Be careful if you have had at least one experience within 5 years that your credit card payment was not withdrawn due to insufficient balance in your account.

If you are overdue for more than 3 months, your personal credit information will contain the words "transfer" and you will not be able to pass the mortgage pre-screening. Even a few days late may result in a record of "delinquency."

Three points to be careful not to be dropped in the examination

So what should we be careful about in advance so that we will not be rejected in the examination?

Do not randomly apply for examination to multiple financial institutions

Personal credit information includes the history of examinations by financial institutions as well as the record of delinquency when using a credit card. Don't apply for more than one just because you're worried about passing your mortgage review.

Understand and organize the borrowing situation other than mortgages

In addition to the mortgage you apply for this time, let's get a firm grasp of the repayment status of the loan you have already taken and the revolving payment of your credit card.

Personal credit information can be disclosed by JICC (Japan Credit Information Reference Center Corp.), CIC (Credit Information Center Corp.), National Bank Personal Credit Information Center, etc., so if you are worried that it is not on the blacklist Let's check in advance.

Check if there is any difference between the contents of the preliminary examination and the main examination.

If there is a change such as a drastic decrease in income or an increase in the amount of borrowing during the period from the preliminary examination to the main examination, it will be difficult to pass the examination under the desired conditions. It is best to apply for the same pre-examination and main examination declarations as much as possible.

What should I do if I fail the mortgage examination?

If you fail the final mortgage examination when you buy a house, you can apply again if you have six months to apply until the next application.

After half a year, the mortgage application history listed in your personal credit information will disappear. After half a year, take the following measures and apply again.

Change financial institutions

The screening criteria are set independently by the financial institution, so if you apply for a different institution from the previous one, you may pass the screening.

Lower the repayment burden rate

If you reduce the amount of annual repayment to 25% or less of your annual income, it will be easier for you to pass the examination. This is a rate called the "repayment burden rate", which is set at 35% by many financial institutions.

Increase the down payment

Simply increasing the down payment will reduce the amount of borrowing and increase your chances of passing the examination. If possible, try it within a reasonable range.

Consider using a pair loan

If it is expected that the annual income of one householder will have a significant impact on the examination, you can apply for a pair loan by adding up the annual income of the couple. If you have an annual household income, you are likely to increase the amount you can borrow.

summary

If you are thinking of buying a house, it is important to study in advance the screening criteria and points to prevent you from failing in preparation for the upcoming mortgage loan screening.

Most people use a mortgage to buy a house, so if the plan to buy a property is delayed, it will greatly affect your life plan.

Even if you should fail the examination, please take measures so that you can pass the examination by holding down the points introduced.