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Old 09.01.2017, 18:35
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Re: Mortgage tips and risks

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So let's run the numbers. Capital of 200, Mortgage 800. Flat value goes down from 1000 to 700 (who calculates that and how?). LTV is now 114%. We raise the capital by 240, the mortgage is now 560, LTV again 80%. Correct?

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How does this work? Do they regularly approximate the value of my property? How reliable is this?

Bonus question: In what circumstances would modern flats in Zurich lose so sharp in value? Increasing interest rates? What was the cause last time?
They will do it once the house prices have considerably dropped. They will do it based on what the house/apartment is worth at that day. Same as they do it now. They could already today say your 1M house is overpriced and only worth 900k.

My bet on the actual cause? A cancellation of the bilateral agreement with the EU which causes a relocation of many multinationals and its workforce out of Switzerland with the result of lot of unneeded housing. Read up on what happened in the 1970ies.

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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.
Your job moving aboard and no replacement job in Switzerland.
If many people have to sell, because of too high interest or no longer a job, and no one buys prices drop. IF interest rises so will rent.

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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?
Tax depends on the canton. In some cases gifts are treated like inheritances and are tax free when from parents to children.

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would the pension of parents count as a valid income? Is their advanced age not an issue?
She has a lower salary than that. I was thinking maybe the parents can use their pension for the Tragbarkeit?
You have to discuss this finer details with the institute which will give the mortgage.

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Yes of course. I was already calculating that, not having to pay the rent, she could save about 40'000 per year. That's 600'000 after 15 years.
That's perfect. Two things: Must be a nice flat for so much rent saved. It may be hard not to touch the money.
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