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Old 24.07.2015, 18:14
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Mortgage before construction (12+ months before delivery)

Hello, all.

It is my first ever attempt to purchase real estate and since it is kind of "once in a lifetime" experience, I want to ask for an advice to not to do stupid things.

So I found the house of my dreams which is inside our budget, and even though I haven't saved all the cash needed, I decided to try. As a general rule, we need to have 10% in cash, 10% in 2nd Pillar and 5% more in cash for "notary charges". I have 8% in cash, 2% in 3rd pillar (i believe it can be considered as cash) and around 13% in 2nd pillar, so I am pretty close.

5% for the notary, which is quite a lot, will need to be paid on delivery, which is at least one year from now. So I have more than a year to save that money, and it seems to be possible.

So I signed the reservation contract and paid 20K. Now I need to request withdrawal from my 2nd and 3rd pillars and, of course, find a financing. This is where I need an advice.

Currently I am in progress of "approval" from UBS. I started with them because it is my bank and because they are partners of the project. I understand that having mortgage with the bank that manages your everyday banking and salary might have both pros and cons. Anyway, I needed something to start with and it was UBS.

I am not sure what exactly it will be if I get approval from them - is it a contract or letter or anything else... Since the rate is not yet fixed and the money doesn't go anywhere - I doubt it is going to be something which will bind me legally. But if any of you knows - please share it.

Another question - when is a good moment to try other banks to get better rates and to negotiate rate with UBS? I doubt it is now, because even UBS won't tell me the rates because it is too early. They offer forward mortgage (fixing the rate before), but for only 12 months maximum, which will add around 0.25% to the rate. Still not sure if it is worth to do it and when...

Thank you for any advice or recommendation.
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Old 24.07.2015, 18:56
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Re: Mortgage before construction (12+ months before delivery)

3p is cash. We put up 1/3, half me (3p), half my wife (cash from inheritance). We got the mortgage from a third bank (KB, our main accounts were UBS, but seller was with the KB, so it was simpler and we got a good 10 year interest only rate). To release the 3p took a couple days, but was simple.

Notary was 3%.

Tom
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Old 24.07.2015, 19:03
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Re: Mortgage before construction (12+ months before delivery)

Yeah, it seems that withdrawal of 2nd pillar will take much more, up to 3 months as they say. And we are still waiting for the notary to prepare papers...

The main question - does the bank tie you to their mortgage on such an early stage (when even rates are not yet known).
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