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Old 10.01.2017, 10:47
Urs Max Urs Max is offline
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Re: Mortgage tips and risks

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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?
The debt situation may still be worth taking a closer look:

There's that thing called Solidarhaftung, Solidarschuldner. What it means is that the parents join the child as s debtor WRT to the mortgage, every Solidarschuldner can be held liable for the full debt. Generally speaking the bank should be interested in such an arrangement as two debtors lower its risk; the benefit for the child, and this is a guess, may be that the parent's income may become usable for the affordability calculation for the child. It may be useful to ask multiple banks.

As odd as it may sound, but one thing to mind with fixed-rate long-term mortageges is the creditor's debt quality:
If the bank goes bankrupt the credit comes due immediately. If that were to happen after interest rates have risen, your friend may need to pay more after refinancing with a different bank. Bankruptcy is near-impossible for most Kantonalbanken because most (I think there are three exception) are protected by Staatsgarantie, i.e. the respective Kanton guarantees the respective bank's debts. So assuming comparable conditions, your friend will proabably want to get the mortgage from a Kantonalbank. I guess the risk is very small but perhaps better be safe than sorry.

Another issue will be to get an overview over currently offered interest rates. The newspaper "Finanz und Wirtschaft" (the local equivalent to the Wallstreet Journal) periodically (once a month I think) publishes a short overview and recent trends plus their short-term outlook; this old article shows what you can expect, I think the article is part of the front page.The paper is available at most not-too-small kiosk, it's published on Wednesdays and Saturdays.
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The risk of cancelling the bilaterals seems to have abated, but another risk not really considered by many is the impact of the trend against tax avoidance and the pressure put on CH by the EU. Without a favourable enough tax regime, some multi-nationals will leave for cheaper countries.
Also cue the national vote next month on corporate tax reform, Unternehmenssteuerreform III.
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