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Old 11.03.2015, 16:24
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Mortgage application criteria?

I was wondering what the criteria - in general - is in this country to get a mortgage?

- I believe one must have 20% in cash for the asking price of the property right?

- Is there also a rule of thumb of how much one can actual loan for purchasing property based on yearly earnings or is it based on something else?

- Must the applicants have lived in CH for a certain number of years? Permit type?

Any pointers are highly appreciated...
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Old 11.03.2015, 16:37
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Re: Mortgage application criteria?

20% is the minimum, but 10% can come out of your Swiss company pension if you have one. It used to be the whole 20% was possible, but I think that changed recently or is about to change.

Yes, it's based on your yearly earnings. UBS has a mortgage calculator you can play with.

http://www.ubs.com/ch/en/swissbank/p...000,90000,2.00

Buying here depends on you nationality and whether it's your main home or a second home. More info here:

https://www.ch.ch/en/real-estate-foreign-national/
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Old 11.03.2015, 16:41
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Re: Mortgage application criteria?

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20% is the minimum, but 10% can come out of your Swiss company pension if you have one. It used to be the whole 20% was possible, but I think that changed recently or is about to change.
Quick question: Change to a higher or lower percentage?

Ah OK.. You mean that the pension part can be a higher part than the 10% - I take it...

I have seen similar calculators on the Credit Suisse site as well but nothing about for how long these run? Is it 10, 15, 20, 25, 30 years as a preset? Doesn't look like I can change any of these anywhere!

I want to get rid of a mortgage in less than 10 years...

Last edited by Frank2k; 11.03.2015 at 16:47. Reason: Just realized...
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Old 11.03.2015, 17:00
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Re: Mortgage application criteria?

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Quick question: Change to a higher or lower percentage?

Ah OK.. You mean that the pension part can be a higher part than the 10% - I take it...

I have seen similar calculators on the Credit Suisse site as well but nothing about for how long these run? Is it 10, 15, 20, 25, 30 years as a preset? Doesn't look like I can change any of these anywhere!

I want to get rid of a mortgage in less than 10 years...
20% is the minimum usualy

Mortgages don't get paid off here, it is not tax effective in the least.

Gop see a bank and ask them directly, you'll get on far better than hearing half truths and myths here.
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Old 11.03.2015, 17:01
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Re: Mortgage application criteria?

The 10% from the pension does not apply to 3a pension.

As an example, I raided one of my 3a accounts and put down just over 20% of the sales price, and my wife 12%, so 32% of the sales price, but we still got a interest-only mortgage.

Tom
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Old 11.03.2015, 17:04
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Re: Mortgage application criteria?

If I recall correctly, the percentage amount of cash downpayment required is also dependent on the price of the property. If the property is selling for over 2million Sfr more than 20% is required.
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Old 11.03.2015, 17:07
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Re: Mortgage application criteria?

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Quick question: Change to a higher or lower percentage?

Ah OK.. You mean that the pension part can be a higher part than the 10% - I take it...

I have seen similar calculators on the Credit Suisse site as well but nothing about for how long these run? Is it 10, 15, 20, 25, 30 years as a preset? Doesn't look like I can change any of these anywhere!

I want to get rid of a mortgage in less than 10 years...
No, the maximum you used to be able to take out of your pension fund was 20%, but that's now been reduced to a max of 10%. So for a 20% downpayment you also need 10% in cash. Note you can't use the pension for for a second/holiday home, only if the property will be your main residence.

Well, Swiss mortgages are not usually paid off as there are tax advantages to be had by keeping them going if you're a resident of Switzerland. UBS has an overview of their products - max period before renegotiation is 10 years.

http://www.ubs.com/ch/en/swissbank/p...omparison.html

Bear in mind that if you sell after a few years you might take a massive hit on the capital gains side if you're resident here too unless you buy an equal or more expensive property. Not sure if that applies if you live abroad and only have a place as a second home, but it may do.
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Old 11.03.2015, 21:48
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Re: Mortgage application criteria?

I'll start this with, I'm not a home owner, so these are only the rumours that I've heard, but...

Another thing to keep in mind is that the bank will value the house that you are looking at buying. If they value it at lower than you pay, they will still only give you a mortgage for 80% of their valuation. i.e. if they value the property at 1 million, but the seller is asking for 1.1 million, the bank will still only offer you 800k, meaning that you need to find the 100k difference in valuations plus the 20%. Therefore, 200k cash plus 100k pension.

Also be aware that the bank may revalue your house at any time as well. So if in 6 months they decide that the house mentioned above no longer justifies a 1 million price tag, but is now 900k. Having already paid up 300k, you will need to stump up a nice sum amount of cash (~80k) to ensure that the mortgage does not breach 80% of the banks valuation.
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Old 11.03.2015, 22:58
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Re: Mortgage application criteria?

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Another thing to keep in mind is that the bank will value the house that you are looking at buying. If they value it at lower than you pay, they will still only give you a mortgage for 80% of their valuation. i.e. if they value the property at 1 million, but the seller is asking for 1.1 million, the bank will still only offer you 800k, meaning that you need to find the 100k difference in valuations plus the 20%. Therefore, 200k cash plus 100k pension.
And likewise, the opposite can happen, i.e. (as in our case), we put down less than 35% of the sale price, but got an interest only mortgage, as the mortgage was for less than 65% of the VALUE.

Tom
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Old 19.03.2015, 13:37
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Re: Mortgage application criteria?

Some good mortgage information here:

Swiss mortgage info
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Old 19.03.2015, 16:37
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Re: Mortgage application criteria?

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And likewise, the opposite can happen, i.e. (as in our case), we put down less than 35% of the sale price, but got an interest only mortgage, as the mortgage was for less than 65% of the VALUE.

Tom
how less Tom?, 30% , 25% ?
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Old 19.03.2015, 16:48
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Re: Mortgage application criteria?

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I'll start this with, I'm not a home owner, so these are only the rumours that I've heard, but...

Another thing to keep in mind.............................................. .................................................. ..
.................................................. .................................................. ......
................Having already paid up 300k, you will need to stump up a nice sum amount of cash (~80k) to ensure that the mortgage does not breach 80% of the banks valuation.
Hello,

I will like to start by saying that as the author of this quote stated in the first paragraph....yes there are a lot of 'RUMOURS' going around regarding home buying....and that is all it is .

I am a home owner and at no point did/have we experience the valuation issues stated above.

At the start of the process with our swiss high street bank, we brought up the valuation of the property, as this is custom of the banks back home in the UK, the bank told us that we could do that privately if we wanted too, because they had a different way of assessing. I know there focus was more on one of the pages of the selling document of the house we were buying, this page had various things including the building insurance/value.......

Yes, you do need at least a 20% deposit and if you have the funds to spare you could increase the deposit .... that is up to you.
But at least 10% of it must be cash.

Permit status also comes into play, but that will be clarified at the onset of the process, in our case, we bought our home were they would only allow 'c' permit for reasons best known to the ''powers that be'....but that is most often not the case.

We had all sorts of scare mongering stories when we decided to buy ...and I say 'scare mongering' stories....a lot which we later on found out were baseless.

If you wish to take the step of getting onto the property market, I will encourage you to sit down .... look at your finances, do your sums and make sure you go for something affordable, so that if the unexpected happens it will cause you no stress and follow your HEAD.

Yes the property market has its ups and downs hence why one hopes to make the decision to buy when it is most favourable, .....it is basically the same thing one would do when thinking of starting a business....hopefully no one should jump into starting a business without doing their sums and forecasting for 'x' number of years.

Upon arriving in Switzerland years ago and saw what was offered for rent and the cost....we made our decision there and then that if we were going to stay on ..... we would get a place of our own as soon it was wise to do so .... personally, I was not willing to enrich some landlord unnecessarily if I could afford to be my own 'landlord'.

Finally I would also like to add that the best way to gather the 'correct' information about something has important as this is by approaching the 'subject expert/professional'.
I will encourage you to do this.
Right from the onset,we had meetings with the our Bank's Mortgage Advisor and another with a Private Mortgage Advisor, they were both very helpful and gave similar information.
All we were asked of at the initial meeting were our total income, savings etc (for the deposit), residency status and if we had the documents of the property we had in mind, a copy from the seller (but not essential).
It was stress free contrary to some scary stories we had read about or told verbally.

I wish you all the very best.

p.s.
If you want the details of the Mortgage Advisors, you are welcome to send me a pm.
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Old 27.07.2016, 18:50
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Re: Mortgage application criteria?

Does anyone know if the banks will lend the approximately 5% required notary and transfer fees in Canton Vaud?
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Old 27.07.2016, 19:18
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Re: Mortgage application criteria?

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Does anyone know if the banks will lend the approximately 5% required notary and transfer fees in Canton Vaud?
It depends. you have to ask. My bank said no. But when I bought my last house with my ex they did.
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