I am in the process of trying to get a loan for a new home and just got some disappointing news from one of the banks (UFJ). When using their simulator with my regular annual salary, I got an amount that I was looking for. However, I also have some side income from Airbnb (not hosting but running experiences) that I've reported on my Japanese tax forms (and technically registered as a company sole proprietorship (個人事業) running out of my home address).
The pre-review went through without issue but after submitting documents for the real review (which includes both my annual salary + side income), I was told that because technically the loan will be for a home + work office (自宅兼事務所), the actual loan amount is much lower and I would need to give a higher down payment than I was planning.
In reality, there is no "work office", at the time I registered with the tax agency I just thought it made sense to put my home address since all the side income was coming from Airbnb, which I accessed through my computer / phone.
On paper, it does look like a home and work office loan request but really all I am doing is using my home computer to set up appointments (so hardly a traditional work office).
I think it's funny that if I applied without the side income I would be fine but because I am technically making a bit more money from home I am now at risk of a lower home loan. My main priority is to get a loan for the actual amount I was hoping for (without falling victim to huge interest rates of course).
Some questions if anyone has insights:
- Is this scenario common to other banks? Admittedly, we haven't gotten word from the other banks we applied to yet but we're a bit worried we'll get the same message from other places.
- Is the lower loan due to the fact we applied online vs. in person? If we actually spoke to a bank employee in person would there be an opportunity for consideration/negotiation?
- My wife floated the idea of changing the work office address to her parents' house or just filing a close of business form (閉業届） as she says banks will need proof that our house won't be used as a work office. Would this be the path of least resistance?
- If we did go to the close of business route, would there be any issue of getting the loan, and then restarting the side job after the loan is signed?
Appreciate any advice!
by commander_rc