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Old 22.04.2019, 18:52
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Home mortgage and ownership, US person

Hello and happy Easter
My wife (Swiss) and I (US) are interested in buying a house we’ve seen. She has the cash, I have the income for the payments.

Her dad wants her to be the sole owner because she brings the cash, which I understand. On the other hand, I don’t want to remain indefinitely liable for the loan if I’m not part-owner of the object.

I have no reason to expect problems, but want to be precautious of the worst case scenario.

Another factor is US property tax, which we are interested in minimizing, however I understand this would only apply to capital gains or income tax?

Does anyone have ideas how to manage this fairly? Maybe I agree to pay her, over time, equal to her down payment and we share ownership. Maybe she and her dad buy the house and I agree to pay the interest payments.

Cheers,
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Old 22.04.2019, 19:01
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Re: Home mortgage and ownership, US person

To get the mortgage, if she doesn't have the funds to pay all of the payments, you legally must be co-owners.

Tom
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Old 22.04.2019, 20:03
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Re: Home mortgage and ownership, US person

Are you sure a bank will give you a mortgage seeing as you're American?
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Old 22.04.2019, 20:15
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Re: Home mortgage and ownership, US person

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Are you sure a bank will give you a mortgage seeing as you're American?
They won't.

My daughter and her husband bought a place in AG, but it's 100% in his name, as despite her being Swiss, she is also US, so a big no-no.

Tom
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Old 22.04.2019, 20:22
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Re: Home mortgage and ownership, US person

May depend on who they're asking. We nearly hiccupped with our mortgage because I was American at the time we applied, but we're with UBS so a few phone calls sorted it out and we were okay. But that was back in 2011 so don't know what the banks are like now. Most cantonal banks won't touch Americans for an ordinary bank account so doubt a mortgage with them would be possible.
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Old 22.04.2019, 20:23
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Re: Home mortgage and ownership, US person

The banker asked us how we planned to split the „shares“ in the Grundbuch. And she said it was possible for my wife to have 100% although most people split 50-50. She said that we both would sign solidarily for the debt regardless of what is in the Grundbuch. Is the Grundbuch not the indicator of ownership? Or maybe both names are shown in the Grundbuch and next to one is 0%, as pointless as that sounds.
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Old 22.04.2019, 20:43
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Re: Home mortgage and ownership, US person

what? I have a few accounts at Raiffeisen and ZKB and never had issues. But that’s right, it depends who you talk to. We met with ZKB for business clients because my wifes father has his business and other properties with them and she has another mortgage with them as well. They already sent an offer with Zusage for the mortgage on this property.
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Old 22.04.2019, 20:52
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Re: Home mortgage and ownership, US person

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what? I have a few accounts at Raiffeisen and ZKB and never had issues. But that’s right, it depends who you talk to. We met with ZKB for business clients because my wifes father has his business and other properties with them and she has another mortgage with them as well. They already sent an offer with Zusage for the mortgage on this property.
Do they know you're American? Filled in W-9's for the accounts?
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Old 22.04.2019, 20:58
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Re: Home mortgage and ownership, US person

They know
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Old 22.04.2019, 21:09
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Re: Home mortgage and ownership, US person

Like a lot of things in Switzerland, it depends on who you know. And that‘s not necessarily a bad thing. Hope all goes well for your purchase.
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Old 22.04.2019, 21:12
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Re: Home mortgage and ownership, US person

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They know
Then you may be lucky.

And yes edot, that too. We've been banking with UBS ever since we moved here in 1998 so long time customers.
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Old 22.04.2019, 21:56
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Re: Home mortgage and ownership, US person

Thanks, but I’m still not sure if I even want to be co-owner. Considering if we were ever to divorce; being liable for the payments and possibly not living there sounds risky. It doesn’t seem logically possible to me, but from the bankers info it may just be. So, still looking for creative ideas for a fair solution. Thanks again.
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Old 22.04.2019, 23:40
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Re: Home mortgage and ownership, US person

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Thanks, but I’m still not sure if I even want to be co-owner. Considering if we were ever to divorce; being liable for the payments and possibly not living there sounds risky. It doesn’t seem logically possible to me, but from the bankers info it may just be. So, still looking for creative ideas for a fair solution. Thanks again.
If you wish to use your personal income to help qualify for a mortgage, then I would rather expect the bank to want to hold you personally responsible for interest payments, even if you move out and even if you divorce.

Quite frankly, expecting anything else sounds dangerously close to misunderstanding what a mortgage is. Especially in this country: In the US you can normally pay off a mortgage early without penalty. This is not the case here.
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Old 23.04.2019, 07:39
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Re: Home mortgage and ownership, US person

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Then you may be lucky.

And yes edot, that too. We've been banking with UBS ever since we moved here in 1998 so long time customers.



In all honesty they don't care whether you're long term or not, if they decide you may be a risk for them, they will just close the account, the screw ups are too expensive to deal with.
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Old 23.04.2019, 07:40
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Re: Home mortgage and ownership, US person

Maybe I am not making myself clear. I think I've written all this already though.

Q1) Her dad wants her to be the sole owner (in the Grundbucheinteilung.) This is what scares me. Does this seem reasonable of him, since she is putting up the cash? Obviously I am looking to reduce my risks in this situation.

Q2) In the case of divorce though; if she is the sole owner in the Grundbuch does the house count as Erungenschaften?

Q3) I was thinking of suggesting that we are both 50/50 owners in the Grundbuch, and I pay her half of what she put in, or I pay amortization equal to what she put in. Are these reasonable suggestions?

Q4) If neither of these are viable or reasonable, then I was thinking she should buy the house with her dad, and I pay them rent. If US taxes come into play, this would also be a reason not to buy a house here.
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Old 23.04.2019, 07:41
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Re: Home mortgage and ownership, US person

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If you wish to use your personal income to help qualify for a mortgage, then I would rather expect the bank to want to hold you personally responsible for interest payments, even if you move out and even if you divorce.

Quite frankly, expecting anything else sounds dangerously close to misunderstanding what a mortgage is. Especially in this country: In the US you can normally pay off a mortgage early without penalty. This is not the case here.

Take a floating LIBOR mortgage, you can pay off any time you want to and lets face it, interest rates certainly aren't going up any time soon.



The US needs to raise rates first, followed by the EU, maybe the UK too before the Swiss can even think about raising their rates
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Old 23.04.2019, 08:11
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Re: Home mortgage and ownership, US person

This article helped clear some things up. I think the banker wasn't quite correct in her explanation of Alleineigentum.

https://www.tagesanzeiger.ch/leben/w...story/31614804
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Old 23.04.2019, 08:57
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Re: Home mortgage and ownership, US person

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Thanks, but I’m still not sure if I even want to be co-owner. Considering if we were ever to divorce; being liable for the payments and possibly not living there sounds risky. It doesn’t seem logically possible to me, but from the bankers info it may just be. So, still looking for creative ideas for a fair solution. Thanks again.
You are not divorced yet this is on your mind. I am all for going into things with eyes wide open but this seems a bit over the top. Perhaps your past experience (from your previous posts) is on your mind.

When other family members start getting involved it is a good time to assess the situation and consider whether to move forward.
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Old 23.04.2019, 09:24
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Re: Home mortgage and ownership, US person

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Take a floating LIBOR mortgage, you can pay off any time you want to and lets face it, interest rates certainly aren't going up any time soon.

Just keep in mind that the LIBOR will disappear and you have a clause in the contract for the replacement.
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Old 23.04.2019, 10:46
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Re: Home mortgage and ownership, US person

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Q2) In the case of divorce though; if she is the sole owner in the Grundbuch does the house count as Erungenschaften?
Depends from where the funds came from.

If it is from money she had from a inheritance/gifts it will be Eigengut (own asset) and solely hers.

If it is from money she had prior the marriage depending on the matrimonial property regime it can be Eigengut (own asset) or Gesamtgut (joint asset).
With Errungenschaftsbeteiligung (Contribution to jointly acquired property, the default) it would be Eigengut.

If it is from money she earned during marriage and you have Errungenschaftsbeteiligung it would be Errungenschaft (acquired assets).
https://www.ch.ch/en/matrimonial-regime/

The problem at divorce time would be to prove where the money actually came from. The linked article from the Tagesanzeiger shows up one possible solution: Societe Simple with an written contract which handles the details.
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