Buying the land next door

Until we heard that we would be getting the loan for the house, there was no certainty about the whole project. We had been waiting for that approval for as long time.
The prospect of immediately being able to start construction brought home the stage of procedings that we are now at. With characteristic dithering and apprehension I have decided to pursue purchasing the adjoining land.

One of the things that brought this on was seeing how our house will fit our small piece of land quite well, but that it has a poor relationship with the larger piece of land that we were hoping to buy later. If the bank would give us the money, it will be better to but the land at the outset and incorporate it into the design.

Fortunately we were aware of this when designing the house and it is desinged such that the house will fit as well onto the two pieces of land as just the one.

On hearing from the bank that they had approved the loan I asked them for the extra for the land. As they have stopped doing martgages for buying land with later construction (last month) we will have to apply for a new loan for the land, and then re-apply for the building loan (due to the new location of the house and our new financial situation).

In applying for the land loan we will need a contact of purchase (subject to financing), which in turn requires fixing a price with the current owner. So this was the first thing to sort (and we are awaiting his response to our offer). Also, the survey will need to be done again and the planning application will have to be amended.

This is all going to put the project back a month or two and we will incur some extra bills, but it seems the only way to go about things. It could be said that we should have applied for planning for the house on both bits of land from the start, but the builder wouldn't do this as we only owned one and and that getting a loan for just that one would be hard enough.

So now we are waiting for a reponse from the owner of the land. Should be in by next Tuesday.

Survey

The survey happened in August while we were on holiday.
It revealed that there is 75cm of hard concrete-like substance over the whole land. Below that it is also firm enough to build on. Measurements were taken at the four corners and at the centre point, based on those corners.

This means that as things stand we will not be requiring any extra groundworks.

Mortgage application

I do not yet have Permament Resident status in Japan. This was the main limiting factor in choosing who to apply for the mortgage with.

Being self-employed didn't seem to matter too much as I have been correctly filing taxes for 4 years. However, when starting my business I wanted to show as little profit as possible to pay no more tax than necessary. Part of this process involved paying my wife to lower my income and get me down to a cheaper tax band. The effect this has now is that,to the bank, we appear to be doing not quite as well as we are. (my wifes salary cannot be counted as she has been receiving it for less than two years).

I wrote a cover letter to explain this situation and it may have helped to smooth things out.

Below is a list of the documents that Shinsei Bank require for the loan application.
ID card, drivers license
Group life insurance (mandatory, paid for)
Tax return for 2005,6,7
Certifacte of tax payment available from tax office (sono1 sono2)
Copy of certifed register of real estate
Location map of property plus a map with route to station
Contract of purchase (land)
Description of important matters concerning sale of land
Contract of construction
Application of construction (builder applies for this) if we don't have it yet explain in cover letter and say when we will get it
Certification of constuction from above
Plan for house
Recorded map can be taken from land record office
Survey map from real estate agent
Gaijin card
Other loan - explain that there aren't any in cover letter
Say that there are no other loans
Say that there is no other property

With Shinsei Bank a contract with the builder is required before loan application may be made. Also, planning must be approved by the local office. This means that a lot of detail has to be decided on in terms of the design of and location of the house before you know if you will get the loan or not. This also involves some expense for the designer, planning application and survey of the land.

Our planning approval came through on August 20th and we had a positive response from the bank by August 25th. So getting approval was quick, but getting all the documents together took some time.