Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation  
Reply
 
Thread Tools Display Modes
  #1  
Old 28.08.2016, 12:40
Junior Member
 
Join Date: Jan 2013
Location: Bottmingen, BL
Posts: 51
Groaned at 0 Times in 0 Posts
Thanked 42 Times in 13 Posts
sylwia has no particular reputation at present
Question about buying a property/mortgage

Dear All,
I've been told that to be granted a mortgage loan, one is requited to pay a deposit/down payment of 20% of the property price. Now, that's a lot of money, so my question is: do you happen to know of any ways of obtaining a loan/financing a loan with a lower deposit?
Reply With Quote
This user would like to thank sylwia for this useful post:
  #2  
Old 28.08.2016, 13:03
Wallabies's Avatar
Forum Legend
 
Join Date: Sep 2011
Location: Winterthur
Posts: 3,219
Groaned at 311 Times in 176 Posts
Thanked 3,314 Times in 1,577 Posts
Wallabies has a reputation beyond reputeWallabies has a reputation beyond reputeWallabies has a reputation beyond reputeWallabies has a reputation beyond repute
Re: Question about buying a property/mortgage

20% is pretty standard
Reply With Quote
The following 2 users would like to thank Wallabies for this useful post:
  #3  
Old 28.08.2016, 13:04
st2lemans's Avatar
Forum Legend
 
Join Date: Dec 2010
Location: Lugano
Posts: 31,918
Groaned at 2,390 Times in 1,738 Posts
Thanked 38,865 Times in 18,320 Posts
st2lemans has a reputation beyond reputest2lemans has a reputation beyond reputest2lemans has a reputation beyond reputest2lemans has a reputation beyond reputest2lemans has a reputation beyond reputest2lemans has a reputation beyond repute
Re: Question about buying a property/mortgage

It 20% only when it's your primary residence, otherwise it's 50%.

Plus another 3 or 4% for the costs.

Tom
Reply With Quote
This user would like to thank st2lemans for this useful post:
  #4  
Old 28.08.2016, 13:07
JagWaugh's Avatar
RIP
 
Join Date: Apr 2009
Location: Eglisau
Posts: 7,249
Groaned at 46 Times in 45 Posts
Thanked 14,131 Times in 5,506 Posts
JagWaugh has a reputation beyond reputeJagWaugh has a reputation beyond reputeJagWaugh has a reputation beyond reputeJagWaugh has a reputation beyond reputeJagWaugh has a reputation beyond reputeJagWaugh has a reputation beyond repute
Re: Question about buying a property/mortgage

Quote:
View Post
Dear All,
I've been told that to be granted a mortgage loan, one is requited to pay a deposit/down payment of 20% of the property price. Now, that's a lot of money, so my question is: do you happen to know of any ways of obtaining a loan/financing a loan with a lower deposit?
You could try talking to different banks, but in general they all do roughly the same calculation.

As to borrowing the 20% somewhere else, few companies would knowingly lend you that deposit at anywhere near a reasonable rate.
Reply With Quote
This user would like to thank JagWaugh for this useful post:
  #5  
Old 28.08.2016, 14:28
Forum Legend
 
Join Date: Jun 2007
Location: Ticino
Posts: 3,006
Groaned at 93 Times in 65 Posts
Thanked 3,908 Times in 1,561 Posts
Snoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond repute
Re: Question about buying a property/mortgage

If you don't have the 20% to start with, that would already be a red flag to most banks. Even more so now as banks are reportedly becoming more difficult in granting mortgages than they have been, and they still use a 5% interest rate to ascertain whether you can afford the mortgage or not.
Reply With Quote
The following 6 users would like to thank Snoopy for this useful post:
  #6  
Old 28.08.2016, 14:34
Guest
 
Posts: n/a
Re: Question about buying a property/mortgage

As well as evidence of financial security, the 20% acts as a buffer for the bank against a fall in house values. It's been discussed many things, but Swiss property prices don't always increase over time, especially a new build, so it's an additional security against the bank losing money in the event of a mortgagee defaulting.
Reply With Quote
The following 3 users would like to thank for this useful post:
  #7  
Old 28.08.2016, 14:39
Junior Member
 
Join Date: Jan 2013
Location: Bottmingen, BL
Posts: 51
Groaned at 0 Times in 0 Posts
Thanked 42 Times in 13 Posts
sylwia has no particular reputation at present
Re: Question about buying a property/mortgage

Thank you all for your input.
Reply With Quote
  #8  
Old 28.08.2016, 15:43
Member
 
Join Date: May 2012
Location: Basel
Posts: 145
Groaned at 0 Times in 0 Posts
Thanked 122 Times in 66 Posts
jjake has no particular reputation at present
Re: Question about buying a property/mortgage

Just to be on the safe side, I think most banks actually loan up to 80% of their valuation. I.e., if the price is higher than their valuation of the property, more than 20% of the purchase price would be needed (+the transaction costs).
For example, if the price is 1.1M but they value it at 1M, they will provide a max. mortgage of 800K => 300K is needed
Reply With Quote
The following 4 users would like to thank jjake for this useful post:
  #9  
Old 28.08.2016, 16:01
Forum Veteran
 
Join Date: May 2007
Location: Basel
Posts: 577
Groaned at 13 Times in 7 Posts
Thanked 256 Times in 157 Posts
SwissMorgs is considered knowledgeableSwissMorgs is considered knowledgeableSwissMorgs is considered knowledgeable
Re: Question about buying a property/mortgage

Perhaps stating a well known fact, but just in case you are not aware, you can use your pension. Obviously this only works if you have something in it!
Reply With Quote
This user would like to thank SwissMorgs for this useful post:
  #10  
Old 28.08.2016, 17:03
Forum Veteran
 
Join Date: Nov 2007
Location: Vaud
Posts: 1,467
Groaned at 115 Times in 75 Posts
Thanked 1,624 Times in 911 Posts
yacek has a reputation beyond reputeyacek has a reputation beyond reputeyacek has a reputation beyond reputeyacek has a reputation beyond reputeyacek has a reputation beyond repute
Question about buying a property/mortgage

You'll find many, many threads on this forum regarding the downpayment.
In a nutshell: 10% can be pledged as a collateral or taken out as a downpayment from your 2nd pillar pension. Another 10% must be cash. And the house price does not include notary fee and tax, which in some cantons is as big as 5%.
BUT: I've heard that sometimes the property developers will offer a 10% loan, and that some banks are "elastic" and do not always require the 20%.
On the other hand the mortgage interest rates in Switzerland are at the lowest level ever, and if they happen to go up, prices are very likely to go down. Of course nobody knows these ifs and whens, but remember this no US, UK or PL, you have to always pay down your mortgage, no personal bankruptcy, defaulting or "walking away" and leaving bank with the house. Especially important if you have assets/properties in other countries that could be repossessed.
Reply With Quote
  #11  
Old 28.08.2016, 17:52
Forum Legend
 
Join Date: May 2007
Location: Lugano
Posts: 6,383
Groaned at 125 Times in 92 Posts
Thanked 7,672 Times in 3,588 Posts
Mrs. Doolittle has a reputation beyond reputeMrs. Doolittle has a reputation beyond reputeMrs. Doolittle has a reputation beyond reputeMrs. Doolittle has a reputation beyond reputeMrs. Doolittle has a reputation beyond reputeMrs. Doolittle has a reputation beyond repute
Re: Question about buying a property/mortgage

Assuming you currently rent, one option you might want to consider is a Miet/Kauf. This might allow you to live in a home which you will ultimately purchase, and a portion of the rent is applied towards the purchase price.
Reply With Quote
This user would like to thank Mrs. Doolittle for this useful post:
  #12  
Old 28.08.2016, 20:24
Forum Legend
 
Join Date: Sep 2006
Location: na
Posts: 11,042
Groaned at 34 Times in 30 Posts
Thanked 26,115 Times in 8,069 Posts
meloncollie has a reputation beyond reputemeloncollie has a reputation beyond reputemeloncollie has a reputation beyond reputemeloncollie has a reputation beyond reputemeloncollie has a reputation beyond reputemeloncollie has a reputation beyond repute
Re: Question about buying a property/mortgage

Another thing to consider that may affect the amount of cash you need upfront is the reservation deposit.

How this is handled, how much money is required - or the area norm - seems to vary widely, as does whether or not this money can be counted as part of your down payment funds.

In SZ, (where we are) the norm is 10% of the purchase price, payable into an escrow account (or whatever they are called here) on signing of the Vorverkauf contract. Note I said norm... as you would imagine, you can try to negotiate a different deal if you know that you are not in a bidding war with other interested buyers. The 10% we needed to put down to reserve the property was not counted as part of the bank's down payment, so essentially we needed a minimum of 30% cash upfront.

At which point you might as well toss in another 4% to get rid of the second more expensive Hypothek as well as the need for amortization.

On the other hand, you'll read posts here where a much smaller amount was required for the reservation contract - possibly as little as 10 or 25K.

But the point is, make sure you understand what is the norm in the area you are buying, and make sure you have that cash on hand.

And make sure you understand the terms of the reservation contract, should you find yourself hit with a bout of Buyer's Remorse.

All the best...
Reply With Quote
  #13  
Old 28.08.2016, 22:09
me.anon's Avatar
Forum Veteran
 
Join Date: Jan 2012
Location: thun
Posts: 2,173
Groaned at 49 Times in 33 Posts
Thanked 2,876 Times in 1,394 Posts
me.anon has a reputation beyond reputeme.anon has a reputation beyond reputeme.anon has a reputation beyond reputeme.anon has a reputation beyond reputeme.anon has a reputation beyond reputeme.anon has a reputation beyond repute
Re: Question about buying a property/mortgage

Be aware that if property values start dropping and you are a borderline case, the lender may come back and demand additional payments to maintain his safety margin of 20%.
Reply With Quote
The following 2 users would like to thank me.anon for this useful post:
Reply




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Mortgage broker suggestion - buying non-primary property in France saiya-jin Finance/banking/taxation 1 19.09.2015 20:40
Buying Chihuahua in CH - question about place and prices IzabelaInZug Pet corner 34 24.01.2015 19:07
Question about buying a commercial space annastorm Business & entrepreneur 1 05.05.2011 15:09
Q's about income tax, buying property, coporate laws/ tax etc SwissRob78 Finance/banking/taxation 6 30.12.2010 11:00
Buying property - tips on property surveyance Taffy Housing in general 2 19.05.2010 11:05


All times are GMT +2. The time now is 21:53.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2021, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0