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Old 20.05.2021, 00:51
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Existing Mortgage Question

Hi All,

Need some advise on an issue which is ongoing.

To summarise, I own a property which has a mortgage in CH, however I had moved to UK few years ago and kept my property and mortgage there.

At the time of purchasing the property many years ago, of course I had a permit but deregistered with the Gemeindehaus prior to moving to UK. I had someone renting the property temporarily but unfortunately this person had informed the mortgage company in person that I no longer live in Switzerland (opened my bank letters which is illegal but oh well).

As a result, the mortgage company is asking to provide a valid permit (B permit I believe) by a certain date or I should move my mortgage elsewhere but unsure of the consequence if I don't produce a valid permit.

Can anyone advise if the mortgage company can do this? Circumstances can change at any time in people's life so not sure the legality behind their request or their threat...

Any advise would be helpful, thanks!
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Old 20.05.2021, 08:59
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Re: Existing Mortgage Question

Well, I am sure that somewhere in the T&C there is a clause that you need to notify them when you change addresses.


They gave you a mortgage based on your permit and residency in Switzerland. That you no longer are so I assume they are well in their right to do that.
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Old 20.05.2021, 09:03
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Re: Existing Mortgage Question

The bank has a risk profile on you that has changed.

You clearly cannot provide them the permit. You need to speak to them.

They will likely terminate the current mortgage because a) you're not living their and b) you're not Swiss-resident. They may offer you different products at less favourable interest rates to cover their risk and the change of use of the property.

Which bank is it? Where is the property?
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Old 20.05.2021, 09:06
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Re: Existing Mortgage Question

You need to check your contract - for example, mine has something along these lines which gives them the right to cancel:

- change of circumstances significantly affecting your financial situation according to customary bank assessments

If you have something similar in your contract, then since they wouldn't have given you a mortgage in your new situation it's wouldn't be unreasonable for them to argue that this is a significant change and you now fail their customary assessment clause.
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Old 20.05.2021, 09:14
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Re: Existing Mortgage Question

Our mortgage is with one of the major Swiss banks. Our contract clearly states that the mortgage is linked to our residency status, and the moment that expires/changes, we either payout in full OR need to renegotiate the mortgage with the international division of this bank. I'm assuming you still have your mortgage documents so you can check the conditions in your own contract?

I was also of the understanding that B permit holders are able to buy houses to live in BUT we have no right to rent them? You'd better check into this for yourself, as you might have other authorities very interested in your situation, so I do hope you've been declaring that rental income.....
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Old 20.05.2021, 09:36
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Re: Existing Mortgage Question

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Hi All,

Need some advise on an issue which is ongoing.

To summarise, I own a property which has a mortgage in CH, however I had moved to UK few years ago and kept my property and mortgage there.

At the time of purchasing the property many years ago, of course I had a permit but deregistered with the Gemeindehaus prior to moving to UK. I had someone renting the property temporarily but unfortunately this person had informed the mortgage company in person that I no longer live in Switzerland (opened my bank letters which is illegal but oh well).

As a result, the mortgage company is asking to provide a valid permit (B permit I believe) by a certain date or I should move my mortgage elsewhere but unsure of the consequence if I don't produce a valid permit.

Can anyone advise if the mortgage company can do this? Circumstances can change at any time in people's life so not sure the legality behind their request or their threat...

Any advise would be helpful, thanks!
You breached your contract with the bank, you'll now need to find a mortgage provider who will give you a mortgage based on foreign residency.

I do have a little sympathy though, what sort of cretin opens your post and informs the bank?!
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Old 20.05.2021, 09:43
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Re: Existing Mortgage Question

He says it was opened. It could well be that the renter returned the letter to the bank stating that OP does not live thereÖ.. without opening it.

Have you never opened a letter by mistake because it was in your mailbox???
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Old 20.05.2021, 09:55
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Re: Existing Mortgage Question

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He says it was opened. It could well be that the renter returned the letter to the bank stating that OP does not live there….. without opening it.

Have you never opened a letter by mistake because it was in your mailbox???
Yes I have, but I wouldn't dream of meddling in someone else's business (i.e. informing the bank). OK, maybe I would if a murder had happened or something! I'm just going off what the OP has written and am not sure if it's worth speculating what might have happened. Either way it has happened and now the problem needs resolving.
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Old 20.05.2021, 10:02
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Re: Existing Mortgage Question

I think the OP needs to keep his tenant sweet because no tenant and no mortgage won't be a happy mix.
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Old 20.05.2021, 10:08
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Re: Existing Mortgage Question

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Have you never opened a letter by mistake because it was in your mailbox???
Yes, several times.

Plus, mail from banks and such often has no return address, so the only way to know where to send it is to open it!

Tom
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Old 20.05.2021, 10:15
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Re: Existing Mortgage Question

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Can anyone advise if the mortgage company can do this? Circumstances can change at any time in people's life so not sure the legality behind their request or their threat...

Any advise would be helpful, thanks!
I would assume they can do this, but get your mortgage contract and read it carefully to check.

Don't be surprised if you get an immediate demand for repayment of the mortgage if you ignore this.
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Old 20.05.2021, 10:27
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Re: Existing Mortgage Question

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As a result, the mortgage company is asking to provide a valid permit (B permit I believe) by a certain date or I should move my mortgage elsewhere but unsure of the consequence if I don't produce a valid permit.

Can anyone advise if the mortgage company can do this? Circumstances can change at any time in people's life so not sure the legality behind their request or their threat...
You are right, peopleís circumstances do change and that is precisely why your mortgage contains a serious of clauses setting out you agree to do should it happen to you. And it would seem you have fallen at the first hurdle... informing them of your change of address....

If you fail to comply with their request, then you can expect that they will terminate the mortgage and the outstanding amount will become payable on demand, meaning you will be given a number of days to pay the amount in its entirety. At this stage they may be willing to offer you a commercial loan, but the fact that they canít rely on you to comply with the basic terms of a contract will not work in your favor.

If you fail to reach agreement with them or fail to find another source of financing then you can expect they will move to have the property disposed of in order to recover the amount outstanding.
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Old 20.05.2021, 11:37
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Re: Existing Mortgage Question

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You breached your contract with the bank, you'll now need to find a mortgage provider who will give you a mortgage based on foreign residency.

I do have a little sympathy though, what sort of cretin opens your post and informs the bank?!
I was thinking of perhaps asking a foreign bank or a UK bank to pay off the remaining mortgage outstanding as their risk will be low given the amount outstanding isnít a lot. But of course, the interest rate that Swiss banks offer vs a foreign bank will be different.

He had a grudge against us on something silly unfortunately so I guess this was his way of payback haha
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Old 20.05.2021, 11:42
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Re: Existing Mortgage Question

you might find that a foreign bank is not interested as it presents some challenges to secure the loan against the asset.

firstly, call your bank. Do that now.

You might find that one of the smaller Kantonal banks have an appetite for your business as well as Raiffeisen, if that is needed.

and I am not surprised you have an issue with the tenant, his opening of the mail and communicating with the bank is wrong and cockish.
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Old 20.05.2021, 11:42
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Re: Existing Mortgage Question

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Our mortgage is with one of the major Swiss banks. Our contract clearly states that the mortgage is linked to our residency status, and the moment that expires/changes, we either payout in full OR need to renegotiate the mortgage with the international division of this bank. I'm assuming you still have your mortgage documents so you can check the conditions in your own contract?

I was also of the understanding that B permit holders are able to buy houses to live in BUT we have no right to rent them? You'd better check into this for yourself, as you might have other authorities very interested in your situation, so I do hope you've been declaring that rental income.....
Iíll have a read of the mortgage contract tonight but from what Iíve been reading, I guess itís finding a company who will either provide a mortgage to a foreigner or pay the mortgage off in full.

I believe at the time we were still registered for tax in Switzerland so all the rental income was being declared but this was a while ago...
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Old 20.05.2021, 12:14
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Re: Existing Mortgage Question

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I believe at the time we were still registered for tax in Switzerland so all the rental income was being declared but this was a while ago...
This could be another problem for you, if renting your property you should have been declaring it on a Swiss tax return even though you don't live here.
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Old 20.05.2021, 12:19
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Re: Existing Mortgage Question

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I was also of the understanding that B permit holders are able to buy houses to live in BUT we have no right to rent them? You'd better check into this for yourself, as you might have other authorities very interested in your situation, so I do hope you've been declaring that rental income.....
Correct, however the property can be rented as the OP no longer has a B permit, so that restriction does not apply & he can no longer live in it!
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Old 20.05.2021, 12:26
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Re: Existing Mortgage Question

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I was thinking of perhaps asking a foreign bank or a UK bank to pay off the remaining mortgage outstanding as their risk will be low given the amount outstanding isnít a lot. But of course, the interest rate that Swiss banks offer vs a foreign bank will be different.

He had a grudge against us on something silly unfortunately so I guess this was his way of payback haha
Do you have the cash to pay it off in full? That would be an easy way to fix it.
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Old 21.05.2021, 12:34
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Correct, however the property can be rented as the OP no longer has a B permit, so that restriction does not apply & he can no longer live in it!
Interesting! So moving "off piste" from the original post - if I was ever to leave Switzerland, give back my permit and do all the other exit bits and pieces, I could still keep my house and rent it out (and declare for Swiss taxes)? My truehand advised it wasn't possible....have I been misinformed??
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Old 21.05.2021, 12:56
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Re: Existing Mortgage Question

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Interesting! So moving "off piste" from the original post - if I was ever to leave Switzerland, give back my permit and do all the other exit bits and pieces, I could still keep my house and rent it out (and declare for Swiss taxes)? My truehand advised it wasn't possible....have I been misinformed??
The restriction is to buy rental properties with a B permit, when you don't have a permit that restriction no longer exists. If you had a C permit & left you could also rent out sans permit. You probably need to pay off your pension fund if it was used for the purchase. It's a Force majeure.
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