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Old 18.04.2012, 10:26
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No mortgages for Americans?

Hi all… thought I'd start another housing thread just because I love them.

Swiss husband and I are on the brink of signing a contract for neubau, getting the contract reviewed with VZ when they bring up the fact that they would not offer us a mortgage because I am American.

So we ask Axa Winterthur, who gave us some great mortgage offers last month and said they would be glad to finance us. I call them and they said they do not offer any mortgages for Americans and that my Swiss husband does not qualify for the loan amount we need on his own.

We are now kind of freaked out that no banks are going to offer us a mortgage because I am American. We both have good salaries and have saved up for the 20% and then some, but we'd have to have over 30% of the house price for my husband to secure a loan for us. We just don't have that much right now.

This is infuriating!!! I have money, earn money, but cannot buy a house like the Swiss.

We are now afraid we have to back down from signing the contract because of my citizenship handicap.
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Old 18.04.2012, 10:30
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Re: No mortgages for Americans?

I can offer no help but I feel your pain.

Is it legal to be rejected as an applicant because of one's citizenship? (Although I understand the bank's side of this too.)
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Old 18.04.2012, 10:32
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Re: No mortgages for Americans?

I even just received a mail about another flat we'd requested information on. They said there were still a few free flats because so many people have tightened their financial restrictions that "diverse" people have trouble acquiring loans.

I can only assume this means foreigners are having trouble buying. I guess it's not really a help to have a Swiss spouse unless I chuck the US citizenship away as soon as I can.
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Old 18.04.2012, 10:44
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Re: No mortgages for Americans?

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I even just received a mail about another flat we'd requested information on. They said there were still a few free flats because so many people have tightened their financial restrictions that "diverse" people have trouble acquiring loans.

I can only assume this means foreigners are having trouble buying. I guess it's not really a help to have a Swiss spouse unless I chuck the US citizenship away as soon as I can.
Diamondscan, I feel your pain, and I am sorry you are going through this, which, I imagine, must be pretty frustrating.

I don't think it's a question of "foreigners", as much as "US citizens". If you search, you will see a few threads of US citizens having trouble banking in Switzerland due to the major hassle imposed by the US government on banking data collection and reporting in Switzerland. This thread, in particular, was full of good info and interesting links, even though it was not specifically related to mortgages.

I think you can, and should, write to your Congress representative and complain. If I was the bank and I had the option to choose, I would probably do the same - avoid clients where I have the hassle of increased reporting and compliance requirements, and a foreign goverment sticking ints nose into my affairs. It doesn't lessen the fact that indeed it is a PITA, especially, as you say, because those who take the brunt are the regular people who live here, earn a regular salary, pay taxes, and naturally would like to make investments in the country.

I read somewhere that PostFinance was a bit more open with banking with US citizens, maybe worth checking into this? Good luck!
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Old 18.04.2012, 10:53
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Re: No mortgages for Americans?

Do you have to chuck your US nationality if you become Swiss?

We had the same problem when we got here - we had to buy the house in my name only as my UK husband had not got a B permit. He is now Swiss, so have reversed the situation.

Those people having problems putting together all the conditions to obtain a mortgage are NOT just Americans. The whole procedure is being tightened up re 20% being the absolute minimum deposit, which some banks had relaxed in the recent past, and the use of the 2nd pension pillar- and it is just about going to get much worse. What the builders are not going to tell you though, is that Zurich is in a very inflated housing bubble which is likely to burst fairly soon, and that many people has withdrawn from buying on advice of their financial advisors, press and TV reports. People are very nervous about buying at the mo, in areas like Geneva and Zurich, where prices have gone through the roof.
Wish you the best of luck. Have a look at other relevant threads here- to see what people think about the current situation.

Not sure about your age, but it is possible they might also be concerned that you might one day want children, and be a full-time mum (as is still often the case, and not just in Switzerland).
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Old 18.04.2012, 10:55
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Re: No mortgages for Americans?

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I think you can, and should, write to your Congress representative and complain. If I was the bank and I had the option to choose, I would probably do the same - avoid clients where I have the hassle of increased reporting and compliance requirements, and a foreign goverment sticking ints nose into my affairs. It doesn't lessen the fact that indeed it is a PITA, especially, as you say, because those who take the brunt are the regular people who live here, earn a regular salary, pay taxes, and naturally would like to make investments in the country.
Thank you for the link. I will be sure to check it out tonight.

I was already planning on getting more active and writing to my representatives (If I can call them that). I will not be quiet about the difficulties the government is making on being an American abroad.

The whole thing makes me sick. Soon the only thing I'll be able to do with my money is stick it under my mattress.
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Old 18.04.2012, 10:58
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Re: No mortgages for Americans?

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They said there were still a few free flats because so many people have tightened their financial restrictions that "diverse" people have trouble acquiring loans.

I can only assume this means foreigners are having trouble buying.
do you mean "so many banks" (rather than people) have tightened financial restrictions?

Not only foreigners are affected. I think this is affecting everybody. I was told yesterday by a real estate agent that banks are now much stricter in financing real estate (new or old) which exceeds their own valuation. And they are starting to apply the 2nd pillar fund restrictions...
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Old 18.04.2012, 11:00
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Re: No mortgages for Americans?

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Do you have to chuck your US nationality if you become Swiss?
Yes, if I want anyone to accept my business. My husband would not be accepted if he had dual-citizenship. It is not a question of being Swiss or not, it is simply a question of being a US citizen and having those obligations for the government to pry into your financial life. I never thought I would be considering dropping my citizenship, but it is honestly a black mark on any person here.

I understand why banks don't want to touch us either, they've been burned a lot. But I just wish there were actually exceptions from both sides for people who live and work here.
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Old 18.04.2012, 11:01
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Re: No mortgages for Americans?

I can only second what BokerTov says - this is a direct result of the FATCA nonsense the US government has saddled us with. Our government has thrown the baby out with the bathwater and turned ordianry US citizens overseas into toxic customers. Thanks to this legislation and it's onerous reporting requirements, few banks are willing to take on the hassle and extra expense that the average US customer represents to them - we simply are not worth it. This hurts us not only as innocent individuals who can no longer get access to services necessary to conduct daily life, but will ultimately hurt US interests overseas.

Please write your US senator and congressman/woman, describing how the US laws are hurting honest tax-paying US citizens. Additionally, you should tell your story to American Citizens Abroad, a lobby group advocating for our interests:

http://www.aca.ch

We expats need get the word out, as the US media and John Public seem to think that every American overseas is a tax-dodging billionaire. This legislation made it into law because our congresscritters have no idea of who it would affect or how.


I'm very sorry this has happened to you, and hope you can find a solution.
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Old 18.04.2012, 11:02
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Re: No mortgages for Americans?

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do you mean "so many banks" (rather than people) have tightened financial restrictions?

Not only foreigners are affected. I think this is affecting everybody. I was told yesterday by a real estate agent that banks are now much stricter in financing real estate (new or old) which exceeds their own valuation. And they are starting to apply the 2nd pillar fund restrictions...
Haha, yes I meant "banks"… But not just banks because they aren't the only ones offering mortgages. And somewhere in the red tape I think people are making up the rules at the banks…

I have heard about the second pillar fund restrictions too, which we weren't planning on using. But seems like there is a big crackdown. It may put us off buying for years. And I'd be so crushed if we miss these interest rates.
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Old 18.04.2012, 11:17
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Re: No mortgages for Americans?

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it is simply a question of being a US citizen
Actually even being considered a US resident is enough.

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it's onerous reporting requirements
Not only that but also the penalties associated with misreporting. Considering how complicated the whole thing is and the fact that not even the powers that be have managed to issue proper guidance it is actually quite easy to screw it up unintentionally. For a financial institution the risks and costs by far outweigh the benefits.

I watched an interview of the Florida representative to the House yesterday. He stated - trying to quote from memory: "Cracking down on fiscal fraud committed by foreigners who open bank accounts in the US to evade their own fiscal jurisdiction risks to damage our economy and our banking sector, so we're not going to do it. Also, these people would face severe penalties in their home countries if caught evading tax - so we aren't going to report them."
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Old 18.04.2012, 11:22
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Re: No mortgages for Americans?

If you think Stadt Zurich is bad - you should see the prices of the properties in the "low" tax communities nearby. 3m CHF is the starting point for a family house
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Old 18.04.2012, 11:37
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Re: No mortgages for Americans?

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Hi all… thought I'd start another housing thread just because I love them.

Swiss husband and I are on the brink of signing a contract for neubau, getting the contract reviewed with VZ when they bring up the fact that they would not offer us a mortgage because I am American.

So we ask Axa Winterthur, who gave us some great mortgage offers last month and said they would be glad to finance us. I call them and they said they do not offer any mortgages for Americans and that my Swiss husband does not qualify for the loan amount we need on his own.

We are now kind of freaked out that no banks are going to offer us a mortgage because I am American. We both have good salaries and have saved up for the 20% and then some, but we'd have to have over 30% of the house price for my husband to secure a loan for us. We just don't have that much right now.

This is infuriating!!! I have money, earn money, but cannot buy a house like the Swiss.

We are now afraid we have to back down from signing the contract because of my citizenship handicap.
Have you tried Post Bank? They accept American customers as of now.
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Old 18.04.2012, 11:51
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Re: No mortgages for Americans?

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But seems like there is a big crackdown. It may put us off buying for years. And I'd be so crushed if we miss these interest rates.
Low interest rates are coupled with high prices and vice-versa. If you miss the low rates, you will miss the high prices as well..!
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Old 18.04.2012, 12:02
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Re: No mortgages for Americans?

I suspect the issue has nothing to do with banks not liking Americans (we had no trouble opening a bank account as gringos), and more to do with the fact that the typical Swiss mortgage structure is very much like a synthetic lease with a very long tenor and immigration for US citizens is very difficult. for example, obtaining a mortgage in the States is almost impossible for non-resident aliens, and not especially friendly even for those with green cards.
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Old 18.04.2012, 12:09
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Re: No mortgages for Americans?

The issue is more to do with the fact that the majority of banks here now consider US citizens high risk due to the way the US government is operating. This is not really a case of the Swiss banks being discriminatory rather they are now seriously considering if it is worth the trouble when considering the level of disclosure the US government is likely to impose.

The simplest solution for the banks is to avoid US citizens even if they have money
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Old 18.04.2012, 12:13
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Re: No mortgages for Americans?

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...

We expats need get the word out, as the US media and John Public seem to think that every American overseas is a tax-dodging billionaire. This legislation made it into law because our congresscritters have no idea of who it would affect or how.


....
I'm a Brit, and I feel for you - that legislation makes you out to be criminals:

http://www.irs.gov/businesses/corpor...236664,00.html

And this stuff is like that Bill Bryson book when he explains the US Tax Return:

http://www.irs.gov/businesses/corpor...255061,00.html

I don't know how you Americans understand this utter blabla:

"
13. How do I value my interest in a foreign pension or deferred compensation plan for purposes of reporting this on Form 8938?
In general, the value of your interest in the foreign pension plan or deferred compensation plan is the fair market value of your beneficial interest in the plan on the last day of the year. However, if you do not know or have reason to know based on readily accessible information the fair market value of your beneficial interest in the pension or deferred compensation plan on the last day of the year, the maximum value is the value of the cash and/or other property distributed to you during the year. This same value is used in determining whether you have met your reporting threshold.
If you do not know or have reason to know based on readily accessible information the fair market value of your beneficial interest in the pension plan or deferred compensation plan on the last day of the year and you did not receive any distributions from the plan, the value of your interest in the plan is zero. In this circumstance, you should also use a value of zero for the plan in determining whether you have met your reporting threshold. If you have met the reporting threshold and are required to file Form 8938, you should report the plan and indicate that its maximum is zero. "
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Old 18.04.2012, 12:14
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Re: No mortgages for Americans?

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The issue is more to do with the fact that the majority of banks here now consider US citizens high risk due to the way the US government is operating. This is not really a case of the Swiss banks being discriminatory rather they are now seriously considering if it is worth the trouble when considering the level of disclosure the US government is likely to impose.

The simplest solution for the banks is to avoid US citizens even if they have money
Exactly. I'm not sure how reversible something like this is. You can bet I'll be writing congress, but once all the banks in Schweiz decide to blacklist Americans, what do we do?

I will have to think very hard about what to do when I get that red passport.
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Old 18.04.2012, 12:17
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Re: No mortgages for Americans?

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The issue is more to do with the fact that the majority of banks here now consider US citizens high risk due to the way the US government is operating. This is not really a case of the Swiss banks being discriminatory rather they are now seriously considering if it is worth the trouble when considering the level of disclosure the US government is likely to impose.

The simplest solution for the banks is to avoid US citizens even if they have money
the issue is that no bank is going to take risk that has a tenor that is longer than your right to stay in the country. so unless you can demonstrate a legal right to stay permanently in Switzerland, no bank is going to give you a mortgage, same problem a Swiss citizen would have in the US.

I have yet to meet a fellow gringo who had any problem opening a bank account here, although of course all of the Swiss banks will close an American's account the minute their B permit expires.
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Old 18.04.2012, 12:19
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Re: No mortgages for Americans?

I'm an American, and have a mortgage, but I also have Swiss citizenship. I don't think you need to give up American citizenship just to get a mortgage. You can't get it back once you do.
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