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Old 09.01.2017, 17:26
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amogles amogles is offline
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Re: Mortgage tips and risks

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How does this work? Do they regularly approximate the value of my property? How reliable is this?
If with reliable you mean accurate, not very accurate. The accurate value of a property is a fluffy concept anyhow. If somebody desperately wants to buy, they will overpay, but people are also selling below value because time isn't on their side..

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Bonus question: In what circumstances would modern flats in Zurich lose so sharp in value? Increasing interest rates? What was the cause last time?
If interest rates pick up, I can definitely see prices slide. The general state of the economy / employment is also an important factor. Nobody has a crystal ball.

Another factor that affects prices is the tax rate of the Gemeinde. Some Gemeindes lower taxes to attract richer people and this pushes up property prices. But sometimes Gemneindes also overstretch themselves and may need to put taxes back up with the inverse effect.

But independently of cause, if she is putting in 300 K in cash (plus whatever she has saved up herself), prices would have to slide quite significantly before there was an equity problem.

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Understood. But what is a realistic scenario that would force you to sell? Even if you can't afford to pay the interest anymore, you just move somewhere cheap and rent that expensive flat to someone else.
Rules on mortgages are different if you don't inhabit yourself. For example if you're taking money out of your second pillar, you would be forced to pay that back if you moved out.

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would the pension of parents count as a valid income? Is their advanced age not an issue?
I think that's a question for the bank. Some banks have different sets of conditions for pensioners.

You also have to consider, if push comes to shove and the bank come knocking on the parent's door and asking for a big chunk of their savings / assets, would your friend want her parents to live their last years in poverty just because she mis-speculated on her appartment?

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Definitely not a loan. They want to buy her a flat, or rather a part of it. Does it mean there would be tax? Then can they own the flat together and eventually she inherits it?
I think you do pay tax if you receive a large present like that. But being parents maybe not. I'd talk to a tax consultant. Does she have siblings? If yes, then possibly the parents can't actually leave such a large chunk of their estate to one daughter alone.
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