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  #21  
Old 04.09.2017, 14:57
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Re: Mortgage & house buying for dummies!

How much should we budget for additional fees? Estate Agents fees, Stamp Duty (Swiss equivalent), Notary fees etc. Roughly, I don't doubt it varies from canton to canton.... Wallis fyi.

Cheers
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Old 04.09.2017, 15:20
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Re: Mortgage & house buying for dummies!

As buyers we did not have any agency fees or stamp duty.
We only had notary costs. These were less than 1'500 francs. Meaning the entire cost of the notary was less than 3'000 francs (the seller paid half).

Now we are selling and again we do not have agency fees as we are selling directly to an investment firm.
We will have capital gains tax and notary costs, but again the latter we will only be paying half, the buyer is paying the other half.
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Old 04.09.2017, 15:52
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Re: Mortgage & house buying for dummies!

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How much should we budget for additional fees? Estate Agents fees, Stamp Duty (Swiss equivalent), Notary fees etc. Roughly, I don't doubt it varies from canton to canton.... Wallis fyi.

Cheers
Roughly: 1% for each.

There is no stamp duty but maybe a property transfer tax and high notary fees for the sale contract, mortgage contract and deed.

In general cantons with an open notary market are much more expensive than cantons where the notaries are appointed.

Wallis:
Property transfer tax 1% (under 500k) up to 1.5% (over 1M)
https://parlement.vs.ch/common/idata...r_2_GES_GR.pdf

https://www.preisueberwacher.admin.c.../notariat.html

https://www.blick.ch/news/hauskauf-w...-id129117.html
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Old 04.09.2017, 16:23
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Re: Mortgage & house buying for dummies!

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HELP!!

Firstly, the deposit. We would likely borrow it from family, and pay them back over a couple off years? Is this going to be a problem with the bank? It is not a problem in the UK, they couldn't care less where your deposit comes from. However someone I know here had money "gifted" to them by family, and had to pay tax on this before she could use it towards the property. Obviously as it would be a loan, we wouldn't want to pay tax on it.

Thank you!!!!


Maybe this point was already addressed, but here are some personal tips from one who is in the midst of buying a second property in CH.


- In general, mortgage financing bank is requesting 20% as self assets and loan is not considered as such since it has to be paid back. What you could do is to agree with you family to make a gift to you (documented by a gift letter) and of course within the family you can treat it as you like.


- Also local loan are not counted as every application for a loan in CH is registered in ZEK (https://www.zek.ch/de-ch/kredit-leasingnehmer) and banks are checking this before allowing finance. Many do not know that.


- Generally speaking (and I may spark another discussion here), I believe that buying a property for self-living is a wise move. Property prices may go down a bit but in a long run there are very likely to increase. Interest is extremely low (yes, it may change) and interest payment are not even comparable to rental fees so for the same apartment you pay much less monthly fees. The only bottleneck for many is 20% self assets.


Hope it helps.
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Old 04.09.2017, 16:35
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Re: Mortgage & house buying for dummies!

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Banks' affordability criteria are simple and more or less uniform: minimum 20% downpayment, of which at least 10% in hard cash, the rest could be pillar 2+3, and 5%*(mortgage amount) [for interest if worst comes to worst] + 1%*(property price) [for maintenance] < 1/3 of your income. If you satisfy these criteria, you should generally be able to find some bank that'd take you and you can start negotiating before you shop around for best rate.
Probably not relevant here as the OP seems to have a fairly simple set up excluding the family borrowing part, but in my experience banks are not the same.

Maybe for simple salary based income, but in our case one bank was happy to consider (net) rental income from a UK property and the property equity as part of our savings buffer; another refused both, which made a difference of about 25% in the amount they would lend.

I've heard people say the same about investments - some banks will consider the income, others won't.
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Old 04.09.2017, 16:36
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Re: Mortgage & house buying for dummies!

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The only bottleneck for many is 20% self assets.
Hardly a bottleneck if you save money towards this each month. 20% is not that high. Moreover, half of that can come from a pension fund and so does not have to be cash. So really if you have a good pension fund amount and are willing to use it to invest in the property you want, you only need to find 10% of the property value in cash.
We were offered this option, but did not take it and paid 20% in cash.
In Switzerland it's fairly easy to get onto the property ladder and a smart move too as rents are so high, in some cases easily double or triple the monthly mortgage payments.
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Old 04.09.2017, 16:40
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Re: Mortgage & house buying for dummies!

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Maybe this point was already addressed, but here are some personal tips from one who is in the midst of buying a second property in CH.


- In general, mortgage financing bank is requesting 20% as self assets and loan is not considered as such since it has to be paid back. What you could do is to agree with you family to make a gift to you (documented by a gift letter) and of course within the family you can treat it as you like.


- Also local loan are not counted as every application for a loan in CH is registered in ZEK (https://www.zek.ch/de-ch/kredit-leasingnehmer) and banks are checking this before allowing finance. Many do not know that.


- Generally speaking (and I may spark another discussion here), I believe that buying a property for self-living is a wise move.
-Property prices may go down a bit but in a long run there are very likely to increase.
-Interest is extremely low (yes, it may change) and interest payment are not even comparable to rental fees so for the same apartment you pay much less monthly fees.
-The only bottleneck for many is 20% self assets.


Hope it helps.
Said the seller or the notary or the property agent

-Wise move if and only if one is sure to stay for numerous years in the same location. With today's market and jobs being exported, it's not sure for many.

-Property prices rising? Sure, they already raised 60-70% in average in last few years, they are expected to reach 1000% increase tomorrow.
Credit Suisse report 2017 are also saying the property prices are reducing in 2017 (around 2%) but who are these clowns?


-Less monthly fee? that's not taking into account the possible loss of property value. Same as, at the end of the period, the rate will have to be renegotiated at the new existing rates (= massive risk) and if it's based on libor, it can also fluctuate. On top of that, rents are also slighty lowering, based on CS report 2017. And that's because no one count the actual replaying the debts into the monthly calculations because if one was trying to refund the actual 1M borrowed, it will be even more money monthly.


- The only 20% asset? there's a reason why it was established, to avoid numerous from getting debt they can afford and try to avoid a bubble bursting and protecting the banks...

Sorry but, I don't buy it. (what you say, not the actual property )
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Old 04.09.2017, 16:49
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Re: Mortgage & house buying for dummies!

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Sorry but, I don't buy it. (what you say, not the actual property )

Fair enough! All what you said above is true, however I haven't met a single person in the Western world (not only CH) who was regretting buying a property in the recent 20 years. Of course there may be exceptions and examples, but if you carefully select your property (location, conditions, price vs market price, easiness of selling, environment, etc.) you are very likely to benefit from it.
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Old 04.09.2017, 16:54
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Re: Mortgage & house buying for dummies!

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Fair enough! All what you said above is true, however I haven't met a single person in the Western world (not only CH) who was regretting buying a property in the recent 20 years. Of course there may be exceptions and examples, but if you carefully select your property (location, conditions, price vs market price, easiness of selling, environment, etc.) you are very likely to benefit from it.
I don't understand the point of that post - first you make a statement about your personal experience, which proves nothing, then you doubly undermine it in the next sentence anyway.

- may be exceptions
- likely to benefit

We, yes - much the same as betting on the horses; I'd hope the odds are better in the housing market, but there are plenty of people who've paid over the odds or just been unlucky, and very much regret it now.
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Old 04.09.2017, 17:05
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Re: Mortgage & house buying for dummies!

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HELP!!

Myself and my husband are thinking of buying an apartment. We need some help understanding how this works in Switzerland. I only have a clue how it works in the UK and the OH's family have only ever rented, so he has no clue.
If you or your husband speak German reasonably well you should consider "Der Weg zum Eigenheim" by the Beobachter. It's comparable to the "... for Dummies" series - won't make you an expert (of course not) but it'll give you a good understanding of the journey you think about embarking. Perhaps just as importantly you'll have at least a concept of the major pitfalls and what to do about them.

To me this and many others by the Beobachter are "must read" stuff.
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