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This time, it was distributed on CONSPIRIT's official channel on YOUTUBE.
Episode 20: Boost your quality of life with real estate management!I would like to send you the contents.

The topic on this episode of the Conspi Channel is how "residual value" home loans work.

It is also said that if this system becomes widely adopted, it could dramatically change Japan's housing market.
This time, I would like to talk about the basics of this ``residual value'' loan.

Basic Mechanism

This is already common when buying a car."Residual value type" loan.
The basic mechanism is to subtract the future asset value from the purchase price and take out a loan for the remaining amount.

For example, if you have a property with a purchase price of 50 million yen, you would normally take out a mortgage for this amount.
In contrast, with a residual value loan, the seller presents the value of the asset at the end of the mortgage as the "residual value," which is then deducted from the mortgage.
For example, if the seller states the residual value is 20 million yen, you can purchase the property by taking out a loan for the remaining 30 million yen.

From the buyer’s perspective,
Lower monthly loan paymentsIt will be done,
Residual value is not included in the principal amount, so no interest is charged..
In other words, it lowers the barrier to purchasing real estate.The biggest advantage of residual value loansIt will be.

Three payment methods

So how will the settlement be done at the end of the mortgage? There are three main settlement methods.

1. Buy the house for its residual value

2. Take out another loan

3. Sell and move

Also, if you sell the property and move, you may be able to make a profit if the asset value at the end of the sale is higher than the residual value.

By the way, the company currently offering this residual value mortgage as a product is:November 2019This is Shinsei Bank, which started from here.
The residual value at the time of purchase will be set by Shinsei Bank, and at the end of the loan,
① Sell and pay off
② Repay in full with your own funds
3) Restructure the remaining balance into a loan until age 80
④ Switch to a reverse mortgage

You can choose from four different patterns:

However, because this is a new system, there are various restrictions, such as the target areas being limited to Tokyo and parts of Kanagawa Prefecture, and there being designations for construction companies.
Given that this system is not widely available at financial institutions other than Shinsei Bank, it can be said that it is still in its development stages.

The reason why this residual value loan has attracted attention again is that"Basic Plan for Housing and Living" announced by the Ministry of Land, Infrastructure, Transport and Tourism in March 2021In this speech, he mentioned "utilizing various financial methods such as reverse mortgages and residual value loans."

The idea is for the public and private sectors to work together to utilize financial methods to support home ownership and reduce housing costs for the public.

It is true that housing costs account for a significant portion of income, and reducing these costs is likely to encourage consumption among the public.
Therefore, the idea is that this should be a national policy, and the public and private sectors should work together to move forward with it.

point

However, it's not all good.
Of course, there are some points to be careful of..

The first thing that comes to mind is, of course,Even after you pay off the loan, the residual value remains..
You will be forced to pay it all in one lump sum, sell it and pay it off, or take out an extended loan.
Reducing the loan burden during your working years, when expenses such as your children's tuition fees are high, is a major benefit, but on the other hand, when you reach old age and your income drops, there will still be a residual value remaining, so unless you are someone who can save up a lump sum, it may not be reassuring.

In short, everyoneConsider your career and income life cycle and decide whether it is beneficial or not.It is that.

You need to look beyond just the superficial benefits and also think about how you will live in the home and pay it back after the repayment period is over, but it is certainly a useful system.
Please keep an eye on future developments.

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