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Old 13.01.2013, 18:52
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Oh, Mortgage ....

My virtual friends,

We are planning to take a burden in the face of mortgage soon... These are just plans for now, but I have already a lot questions. The main one is WHAT WILL HAPPEN WITH THE DEPOSIT OF 20% that we provide if the life will turn so that I will have to move back from Switzerland.

Do I understand correctly, that the bank will sell the apartment, take what we owe to it and the left-overs for us? So everything depends on the market price of the apartment? Or there is another scenario possible?

Thank you.
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Old 13.01.2013, 18:57
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Re: Oh, Mortgage ....

How about less pessimistic scenario and if it is life turn to leave for good, before you do it you sell the property so that someone else worries about his/her bond. You sell the house you get your money back!
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Old 13.01.2013, 19:37
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Re: Oh, Mortgage ....

So you are thinking of buying something and are already contemplating leaving the country and just dumping the keys at the bank????

Why just not bother?

On the other hand, if you just are not clear on how mortgages work and you just phrased your question here bizarrely, why don't you go and make an appointment with an advisor at your favourite bank and ask him/her to explain how mortgages work and what kind of mortgages they have available? Establishing a relationship with the bank where you might get the mortgage might make things simpler in the long run....
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Old 13.01.2013, 19:47
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Re: Oh, Mortgage ....

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So you are thinking of buying something and are already contemplating leaving the country and just dumping the keys at the bank????

Why just not bother?

On the other hand, if you just are not clear on how mortgages work and you just phrased your question here bizarrely, why don't you go and make an appointment with an advisor at your favourite bank and ask him/her to explain how mortgages work and what kind of mortgages they have available? Establishing a relationship with the bank where you might get the mortgage might make things simpler in the long run....
I may not have put the question very clearly, leaving the country was just an example, what can happen else...hm, lose my job, can't find a new one....etc. so what the bank can do with my apartment?
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Old 13.01.2013, 20:13
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Re: Oh, Mortgage ....

If you fear that you can't make the payments in the case of a job loss - should you be buying now?


(I'm of a conservative bent when it comes to the roof over my head. I may take out a mortgage, but I make sure that I have sufficient reserves either pay off the loan or to tide me over should things go pear shaped.)

There are some insurance policies you can take out to guarantee the mortgage payment - but these tend to be very expensive; you might be better off just stashing that money away. But if you are concerned about continued employment in your field, look into it - making sure to read the fine print. If you can't pay the mortgage you probably can no longer afford the premiums on these policies just when you need them.

Worst case: you default on the loan, the bank takes the property plus sends you to the cleaners. Not pleasant.

While I firmly believe that property ownership is a very good thing, I would be wary of extending myself beyond my means - we are in a property bubble and an economic downturn. Now where have I seen this scenario before?

Bottom line: only buy what you can comfortably afford.
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Old 13.01.2013, 20:14
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Re: Oh, Mortgage ....

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I may not have put the question very clearly, leaving the country was just an example, what can happen else...hm, lose my job, can't find a new one....etc. so what the bank can do with my apartment?
The same thing that would happen in any country, when you buy a house you are responsible for the risk. If you buy and the value goes down that`s your problem, flip side, if the value goes up you get the increased value.

Whether you HAVE to sell when leaving Switzerland is another question and may vary Kanton to Kanton and I am not sure if it`s also dependent upon visa/ permit type. I know we could keep our property if we left (from the Kanton not sure about whether the bank would agree as it would become an investment property).

If you plan leaving then you would sell the house. The bank is going to get involved if you stop making your payments.

Yes you could lose your job but how would you pay your rent then? It`s a similar problem.

I agree with other poster you need to see an advisor.
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Old 13.01.2013, 20:20
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Re: Oh, Mortgage ....

Sorry to put a damper on your house-buying ambitions, but it seems to me that you're far too far down the track already. If you don't understand the process of buying and disposing of a home, and of bank loans, then stop, take a deep breath and do a lot of research. Granted, maybe this thread is part of your research, but I truly hope you're not taking on a mortgage "soon" (as you stated).

There are so many things you need to understand, not just about loans, but about your rights as a foreigner in Switzerland, the costs of buying a home, the costs of maintaining it ... etc, etc, etc.

Good luck, seriously -- but please go and do the research!
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Old 13.01.2013, 20:36
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Re: Oh, Mortgage ....

On a serious note, buying a property is a serious enterprise and you shouldn't get engaged in process unless you have 100% certainty where you will be within next 10-20 years. Obviously you cannot guarantee anything in life, job loss and other calamities. However you must be mature enough to know what you want to do with your life in the future and take calculated risk. Get familiar with securities in form of insurance e.g. mortgage insurance against job loss and what you can do with collaterals in order to avoid pitfalls. Here is just an idea how it all works but you are urged to use professional advise:

http://www.bcv.ch/en/content/downloa...realiser_votre
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Old 13.01.2013, 21:50
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Re: Oh, Mortgage ....

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Sorry to put a damper on your house-buying ambitions, but it seems to me that you're far too far down the track already. If you don't understand the process of buying and disposing of a home, and of bank loans, then stop, take a deep breath and do a lot of research. Granted, maybe this thread is part of your research, but I truly hope you're not taking on a mortgage "soon" (as you stated).

There are so many things you need to understand, not just about loans, but about your rights as a foreigner in Switzerland, the costs of buying a home, the costs of maintaining it ... etc, etc, etc.

Good luck, seriously -- but please go and do the research!
Thank you for taking care
All these positions I understand, read so much on the forums and made calculations....Maybe it was a stupid question of mine, as I answered it myself)))
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Old 13.01.2013, 21:52
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Re: Oh, Mortgage ....

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If you fear that you can't make the payments in the case of a job loss - should you be buying now?


(I'm of a conservative bent when it comes to the roof over my head. I may take out a mortgage, but I make sure that I have sufficient reserves either pay off the loan or to tide me over should things go pear shaped.)

There are some insurance policies you can take out to guarantee the mortgage payment - but these tend to be very expensive; you might be better off just stashing that money away. But if you are concerned about continued employment in your field, look into it - making sure to read the fine print. If you can't pay the mortgage you probably can no longer afford the premiums on these policies just when you need them.

Worst case: you default on the loan, the bank takes the property plus sends you to the cleaners. Not pleasant.

While I firmly believe that property ownership is a very good thing, I would be wary of extending myself beyond my means - we are in a property bubble and an economic downturn. Now where have I seen this scenario before?

Bottom line: only buy what you can comfortably afford.
Thank you for the warm words and explanations.
I think we have to asset the property with a specialist so that to be sure that it wont lose its value quick.
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Old 14.01.2013, 11:49
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Re: Oh, Mortgage ....

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Thank you for the warm words and explanations.
I think we have to asset the property with a specialist so that to be sure that it wont lose its value quick.
Most importantly, you have to accept that in Switzerland property values really do go down at times, and up at others. There's no general expectation that eventually prices will rise like there is in many other countries. For example, the apartment we bought in 2007 cost us around 70% of the original purchase price when new in ~1985. Sure, there's always a premium on new properties, but that difference is not solely responsible for the drop.

So even if you do stay for five years or more, you may still be out of pocket if you _need_ to sell, depending on market conditions at that time. And also bear in mind that it's not unusual for a property to be on the market for six months or a year before a buyer is found, during which time more and more interest would be accumulating on your loan if you couldn't make the payments.
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Old 14.01.2013, 13:00
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Re: Oh, Mortgage ....

Oh come on folks! I think it's eminently sensible to ask the "what if" questions before taking on a financial commitment like a mortgage so it's a bit harsh to castigate the OP for trying to consider all eventualities. Life has a habit of throwing curve balls at us, after all.
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Old 14.01.2013, 13:09
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Re: Oh, Mortgage ....

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Oh come on folks! I think it's eminently sensible to ask the "what if" questions before taking on a financial commitment like a mortgage so it's a bit harsh to castigate the OP for trying to consider all eventualities. Life has a habit of throwing curve balls at us, after all.
I dont think it's the "what if" question as much as the fundamental lack of knowing the first thing about what a mortgage is or means that provoked a somewhat harsh reaction...
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Old 14.01.2013, 13:29
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Re: Oh, Mortgage ....

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I dont think it's the "what if" question as much as the fundamental lack of knowing the first thing about what a mortgage is or means that provoked a somewhat harsh reaction...
Hands up who's never been in that situation at some point in our lives. Moreover, even if we think we know what's involved, systems vary between countries and what might pertain in the UK, for example, doesn't necessarily pertain here.

ASSUME makes an ass out of u and me

There's no such thing as a stupid question
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Old 14.01.2013, 13:36
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Re: Oh, Mortgage ....

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Hands up who's never been in that situation at some point in our lives. Moreover, even if we think we know what's involved, systems vary between countries and what might pertain in the UK, for example, doesn't necessarily pertain here.

ASSUME makes an ass out of u and me

There's no such thing as a stupid question
With all due respect, to repeat answers to the same questions (especially when you certainly know they are somewhere there on the EF already answered) over and over again ad nauseam, is a tedious task. I feel quite guilty if I don't and feel to be arsed if I do Yet want to be helpful so I provide clues to search engine.
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Old 14.01.2013, 16:26
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Re: Oh, Mortgage ....

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Hands up who's never been in that situation at some point in our lives. Moreover, even if we think we know what's involved, systems vary between countries and what might pertain in the UK, for example, doesn't necessarily pertain here.

ASSUME makes an ass out of u and me

There's no such thing as a stupid question
I'd like to buy a car, but what do I do when the car runs out of gas? Do I just leave it on the side of the road, and lose the deposit I paid for it? Can I just bring it back to the dealer to put more gas in it?

Knowing what a down payment is and how it works is hardly some sort of specialized regional knowledge.
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Old 14.01.2013, 16:32
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Re: Oh, Mortgage ....

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I'd like to buy a car, but what do I do when the car runs out of gas? Do I just leave it on the side of the road, and lose the deposit I paid for it? Can I just bring it back to the dealer to put more gas in it?
Hope this helps:

The cars are bla bla bla...
They are propelled by bla bla bla ...
You can refill them by bla bla bla ...
The gearbox is used for bla bla bla ...
Don't buy the car if you bla bla bla ...
Use search engine bla bla bla ...

But most of all I would advice to get some driving lessons with instructor
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Old 14.01.2013, 16:34
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Re: Oh, Mortgage ....

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With all due respect, to repeat answers to the same questions (especially when you certainly know they are somewhere there on the EF already answered) over and over again ad nauseam, is a tedious task. I feel quite guilty if I don't and feel to be arsed if I do Yet want to be helpful so I provide clues to search engine.
And yet when some of the answers are rubbish (see yours below) , what the hell is wrong with asking the same questions again?

Ask enough times, get enough answers and you should have all bases covered.

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On a serious note, buying a property is a serious enterprise and you shouldn't get engaged in process unless you have 100% certainty where you will be within next 10-20 years. Obviously you cannot guarantee anything in life, job loss and other calamities. However you must be mature enough to know what you want to do with your life in the future and take calculated risk. Get familiar with securities in form of insurance e.g. mortgage insurance against job loss and what you can do with collaterals in order to avoid pitfalls. Here is just an idea how it all works but you are urged to use professional advise:
I know loads of people who have bought both here and abroad then sold up and moved to another country - within five years. They've all made a handsome profit.

There are many reasons to be hesitant in buying but not knowing what you're going to be doing in twenty years is not one of them.
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Old 14.01.2013, 16:43
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Re: Oh, Mortgage ....

Buying a house, just like any other investment, it could be profitable and it could be a loss.

But, if you know that you might move on in few years I would contract a short term mortgage, because exit fees from a mortgage contract can be VERY annoying.

Also, if you contract a real estate agent to sell the house you will have to pay him a fee too. So you have to calculate this in advance.

Anyway, before buying I would study the market for a while to get a feeling of what is a good deal. This country still experiences a positive and steady migration so I would not worry about losing money.
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Old 14.01.2013, 16:48
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Re: Oh, Mortgage ....

"you shouldn't get engaged in process unless you have 100% certainty where you will be within next 10-20 years"

if everybody thought like that, nobody would build or buy houses. nobody has 100% certainty on where they will be in the next year, let alone the next 10 or 20!
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