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Old 15.09.2012, 10:28
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Mortgage questions

Hi all

I had a few urgent questions on mortgages and was not sure which thread to put them on and thats why created a new one.

I am looking for a mortgage and am talking to UBS, CS and AXA.

I started with a new job this month and therefore have a 3 month probation period. Do banks give mortgages in this period ? The reason I am asking is I applied for a private credit some years back and it was refused due to this probation period.

Also I am considering pledging or withdrawing 2nd pillar funds to buy the property. Is it true that I cannot rent the property out later if I use PensionFund assets in any way ?

Good weekend and thanks for feedback in advance.
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Old 15.09.2012, 10:39
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Re: Mortgage questions

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Hi all

I had a few urgent questions on mortgages and was not sure which thread to put them on and thats why created a new one.

I am looking for a mortgage and am talking to UBS, CS and AXA.

I started with a new job this month and therefore have a 3 month probation period. Do banks give mortgages in this period ? The reason I am asking is I applied for a private credit some years back and it was refused due to this probation period.

Also I am considering pledging or withdrawing 2nd pillar funds to buy the property. Is it true that I cannot rent the property out later if I use PensionFund assets in any way ?

Good weekend and thanks for feedback in advance.
With borrowing money it always depends.....as you can be sacked with 1 months notice without any reason, I doubt it's a big deal, probably will more depend on your relationship with the lender.

You can now only use some of the 2nd pillar, 50% in theory but could be more depending on contribution level. You can't rent the house as its your main residence, that's why you get the pension advance. If it ceases to be your main residence you must repay the advance.
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Old 15.09.2012, 11:05
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Re: Mortgage questions

Thanks for the quick answer. But is the case same with pledging as I am not withdrawing. Even pledging does not allow renting later or what ?
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Old 15.09.2012, 11:33
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Re: Mortgage questions

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Thanks for the quick answer. But is the case same with pledging as I am not withdrawing. Even pledging does not allow renting later or what ?
Yes, as you can only do it for your main residence.

Tom
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Old 23.09.2012, 11:00
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Re: Mortgage questions

Since this a mortgage question and the most recent thread, I will throw my question in here I think...

Does anyone know if any of the banks, insurance companies etc, still offer mortgages with a less that 20% deposit required?

Thank you!
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Old 23.09.2012, 11:07
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Re: Mortgage questions

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Since this a mortgage question and the most recent thread, I will throw my question in here I think...

Does anyone know if any of the banks, insurance companies etc, still offer mortgages with a less that 20% deposit required?

Thank you!
That sort of lending is exactly the reason prices have risen to high levels recently, people are not putting up more money they are borrowing the price rise 100% be aware that if prices fall you will be required to put up more deposit, also you can't 'just go bankrupt ' & loose the debt like in the UK & USA.
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Old 23.09.2012, 12:17
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Re: Mortgage questions

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Since this a mortgage question and the most recent thread, I will throw my question in here I think...

Does anyone know if any of the banks, insurance companies etc, still offer mortgages with a less that 20% deposit required?

Thank you!
I found a company called Previa Consult who are based in Bulle who were/are offering mortgages with 10% deposit. Website is www.hypotheque24.ch. I never used them, but they might be worth checking out.
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Old 23.09.2012, 12:19
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Re: Mortgage questions

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Since this a mortgage question and the most recent thread, I will throw my question in here I think...

Does anyone know if any of the banks, insurance companies etc, still offer mortgages with a less that 20% deposit required?

Thank you!
yes, they will. i know someone who just put down 10%. they had a higher mortgage rate though.
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Old 23.09.2012, 13:51
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Re: Mortgage questions

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Since this a mortgage question and the most recent thread, I will throw my question in here I think...

Does anyone know if any of the banks, insurance companies etc, still offer mortgages with a less that 20% deposit required?

Thank you!

Some, try the "local bank" and hope that you have a real estate agent with some influence. This has worked for others I know.
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Old 03.10.2012, 16:31
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Re: Mortgage questions

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Since this a mortgage question and the most recent thread, I will throw my question in here I think...

Does anyone know if any of the banks, insurance companies etc, still offer mortgages with a less that 20% deposit required?

Thank you!
Hi

UBS and CS will accept 10 percent deposit but you have to pledge the rest 10 percent from the 2nd or 3rd pillar.

Cheers
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Old 03.10.2012, 16:44
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Re: Mortgage questions

Just curious - Why not wait until your probationary period is up rather than pledging or even spending retirement funds? Any good investment advisor will tell you not to withdraw retirement funds until you actually retire or they won't grow sufficiently. Mortgaging your future for your present, so to speak. Plus, you never know what will happen in those three months and it leaves you the flexibility to rent it out later.
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Old 03.10.2012, 17:49
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Re: Mortgage questions

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Just curious - Why not wait until your probationary period is up rather than pledging or even spending retirement funds? Any good investment advisor will tell you not to withdraw retirement funds until you actually retire or they won't grow sufficiently. Mortgaging your future for your present, so to speak. Plus, you never know what will happen in those three months and it leaves you the flexibility to rent it out later.
But pledging is just pledging. Assuming everything goes well, you pay the mortgage and the house price doesn't sink the funds stay in the pension to grow for retirement. Not entirely risk free, but no riskier than sticking cash down.
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Old 03.10.2012, 17:55
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Re: Mortgage questions

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Thanks for the quick answer. But is the case same with pledging as I am not withdrawing. Even pledging does not allow renting later or what ?
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Yes, as you can only do it for your main residence.
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But pledging is just pledging. Assuming everything goes well, you pay the mortgage and the house price doesn't sink the funds stay in the pension to grow for retirement. Not entirely risk free, but no riskier than sticking cash down.
Fair point on the pension still being around if it is pledged but not used, but also see above quotes. I get the impression OP would like to have the option to rent the house in the future - but it sounds like even pledging pillar funds eliminates that possibility.
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Old 03.10.2012, 18:31
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Re: Mortgage questions

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Fair point on the pension still being around if it is pledged but not used, but also see above quotes. I get the impression OP would like to have the option to rent the house in the future - but it sounds like even pledging pillar funds eliminates that possibility.
True it does. Depends why you would want to rent. If you are moving inside Switzerland or EU (I think) you would have to leave the pension and find the funds that were previously pledged. If you are moving outside the EU then you can/ must cash your pensions and can use the funds to give to the bank.

Then the question becomes can I continue to own a house while not residing in Switzerland. Which I think the rules are Kanton by Kanton.

Personally, I wouldn't let probationary period itself put me off buying, Swiss labor law you don't have that much security really anyway. Unless you are feeling awkward, not getting along with your boss, hear rumblings about the imminent self implosion of the company, these would be more serious warning signs.

Same with pledging the pension on the assumption you see it as a one term purchase to live in. Who knows what happens in the future which is why I asked all these questions when we bought but what basically was my conclusion that Switzerland is not a place to buy short term (even mores than other countries). Any capital gains are taxed heavily and given that current prices are high you want to make sure you get value. Buying a house to live in long term, interest rates are very low and you can secure a consistently low housing cost for the next 10 years.
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Old 03.10.2012, 18:44
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Re: Mortgage questions

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You can now only use some of the 2nd pillar, 50% in theory but could be more depending on contribution level. You can't rent the house as its your main residence, that's why you get the pension advance. If it ceases to be your main residence you must repay the advance.
I wasn't aware of the 50% rule. Hast that come in during the last 2 years?

I understand that if you have a 20% deposit from 2nd Pillar, then you must use as you main accommodation at least 20% of the house. So if it is split into 4 apartments for example, you could live in one. Not sure if that 20% is by value or floor area. I would imagine value.

There are various exceptions also, like while it is being built, or renovated, you don't have to live in it. Possibly others I could imagine: if you are ill, working away for 6 months. If it is genuinely your house, rather than speculative, there are probably workable solutions.
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Old 03.10.2012, 18:52
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Re: Mortgage questions

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I wasn't aware of the 50% rule. Hast that come in during the last 2 years?
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Yes, this year IIRC, it's to take pressure off property prices. BTW it's 50% of the fund, not a percentage of deposit.
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Old 03.10.2012, 19:08
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Yes, this year IIRC, it's to take pressure off property prices. BTW it's 50% of the fund, not a percentage of deposit.
There is also a percentage of the deposit they will only accept pension contributions up to. That is you have to put some cash down it can't all be pension pledge/ cash in. From memory it was very high, around 80%, so you could pledge or use your pension for 80% of the deposit (with UBS 18 months ago).
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Old 03.10.2012, 20:18
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Re: Mortgage questions

As from July 1st this year you must pay at least half of the minimum 20% deposit in actual cash but you can use your pension fund for the other 10% up to a maximum of 50% of its value.
There may be some exceptions if you search around but for all the big banks and insurance companies this is certainly enforced.
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Old 03.10.2012, 20:22
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Re: Mortgage questions

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There is also a percentage of the deposit they will only accept pension contributions up to. That is you have to put some cash down it can't all be pension pledge/ cash in. From memory it was very high, around 80%, so you could pledge or use your pension for 80% of the deposit (with UBS 18 months ago).
That is interesting. Things have changed a lot then. 2 years ago I withdraw all 2nd pillar as a deposit, and was able to use it all. No cash needed at that time (ZKB), only transaction costs.
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Old 03.10.2012, 20:35
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Re: Mortgage questions

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As from July 1st this year you must pay at least half of the minimum 20% deposit in actual cash but you can use your pension fund for the other 10% up to a maximum of 50% of its value.
There may be some exceptions if you search around but for all the big banks and insurance companies this is certainly enforced.
I prefer smaller banks that don't insist on the 20%, that rings alarm bells for me. Either the property is not a good buy, or the bank is inflexible and doesn't understand that this really is the property deal of the year. The smaller banks will negotiate on properties postcode by postcode. Being a foreigner, not understanding the subtleties of the local market, that expertise means a lot. You can still put down 20% or more, and get a better rate, but at least you know they were willing to lend more. Better to have the safety margins in case you are ill for a while, loose a job, etc.
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