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Old 19.09.2012, 19:46
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why would I want to take over Schuldbrief?

We are looking at buying a house. Today we viewed a house, and the owner (a builder who owns a number of houses) was keen to explain that there was a Schuldbrief on the house in favour of Raiffeisen bank that we could take over.

I couldn't understand why this would be a Good Thing. He did not talk of low interest rates or along those lines...it was about capital.

We anyway will need to get a mortgage....so I suppose we anyway will have to go through valuation process so the bank can be sure of their security.

Any ideas?? Thanks
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Old 19.09.2012, 19:53
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Maybe you can reduce purchase price by taking it over?
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Old 19.09.2012, 19:58
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Re: why would I want to take over Schuldbrief?

I would seek professional advice and tread very carefully
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Old 19.09.2012, 20:12
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Re: why would I want to take over Schuldbrief?

It may be the cheaper option for you, as otherwise a new Schuldbrief has to be "issued" which costs arround 0.25% and 0.35% (depending on the canton) of the whole sum of your mortgage.
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Old 19.09.2012, 20:19
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Re: why would I want to take over Schuldbrief?

If it smells like crap, then it probably is.

Check with an attorney!
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Old 19.09.2012, 20:32
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Re: why would I want to take over Schuldbrief?

If I recall correctly, the builder is trying to help you. If you have an existing Schuldbrief you pay less money to take it over than to have the notary create a new one, which you'll need if you get a mortgage.
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Old 19.09.2012, 20:32
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Re: why would I want to take over Schuldbrief?

Bear in mind that the Schuldbrief is not your mortgage.

Speak to your bank - the one issuing your mortgage.

KTipp recommends taking over the Schuldbrief whenever possible, as the cost of a new one, as a previous poster pointed out, is generally .25-.35% of your mortgage.

http://www.ktipp.ch/beratung/1024923...ef_uebernehmen

IN the example given the writer asks if he should take over an existing Schuldbrief of 400K - Ktipp points out that a new Schuldbrief in that amount would cost ca. CHF1400. If what you are considering is more than that amount, do the math.

The KTipp article also points out that if the existing Schuldbrief does not cover your mortgage, your bank may ask for a new one in the remaining amount - at your cost.

The existing Schuldbrief can be transfered from Raffeisen to your bank if your mortgage is not with them.

--

We took over the seller's existing Schuldbrief - saving ourselves several thousands. But as always YMMV - speak to your mortgage lender to determine what is best for you in this particular situation.


ETA:

More on the Schuldbrief , from the ZH Notariat:
http://www.notariate.zh.ch/gru_hyp_sch.php
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Old 19.09.2012, 20:35
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Re: why would I want to take over Schuldbrief?

I can definitely recommend taking over the Schuldbrief. If you are not being charged for it that is even better. Some owners will sell it on at 50% of what it would cost to issue a new one and that is a good deal also. The fact that it is made out to one bank rather than an other is not a problem. The notary will have that changed.

It is not suspicious, it is totally normal.
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Old 19.09.2012, 21:45
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Re: why would I want to take over Schuldbrief?

In Switzerland a Schuldbrief is a document issued for a fee by the county (Bezirk) book of deeds against a real property. There can be several Schuldbriefe, in various amounts, recorded against a property. If there is more than one, they are recorded in a specific order of seniority. The total of all Schuldbriefe against a property can even exceed the value of the property, although that would be pointless and expensive. The owner of a property can request the issuance of new junior Schuldbriefe in arbitrary amounts as necessary. It seldom makes economic sense to cancel an existing Schuldbrief, except, perhaps, to break it into smaller pieces. When a property is sold, in theory the seller hands all the Schuldbriefe with the keys to the new owner. In practice, Schuldbriefe usually go from one bank to another.

Schuldbriefe are used to secure debts, usually mortgages. When a bank issues a mortgage, it wants in exchange to hold the most senior Schuldbriefe against the property totaling at least the value of the mortgage. When a mortgage is paid down or paid off, the debtor can request the return of his Schuldbriefe, usually in order from most junior to most senior.

So, if the seller is simply offering to hand you the existing Schuldbriefe instead of cancelling them, you should accept with thanks. There's no advantage to the seller to cancel Schuldbriefe, but if he does so and you need a mortgage, he can cause you extra costs at the book of deeds, and he knows that. So he might ask for compensation to turn over the Schuldbriefe to you. Bear in mind that any such compensation must be mentioned in the official sales contract; to do otherwise is criminal.

Another possibility might be that the seller wants you to take over his existing mortgage. The reason might be that his mortgage carries a higher rate of interest than the current (low) rate, and therefore the bank would penalize him substantially if he paid off his mortgage early. It might make sense for you to take over his mortgage if he thanked you for this favor with an appropriate reduction in the sales price or with some other consideration. Again, any such compensation must be mentioned in the official sales contract.
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