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Old 26.01.2021, 16:39
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Getting mortgage approved in time

Hi Everyone,

I will be moving to Switzerland in the second half of the year (say August). However, I have found a property that I would like to purchase with a mortgage, and the seller would need the majority of the price at the end of the year (say December). I have enough cash to give the seller the 20% they ask as reservation, however, for the majority of the remaining 80%, I would need the aforementioned mortgage. Is it feasible to get this mortgage process done in about 3 months to be sure I have the money required when I need it? I am asking because I read that often in Switzerland people get their mortgage "pre-approved" before actually agreeing on a house, but as I don't currently reside in Switzerland, this doesn't look easy.

Thanks for your help in advance
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Old 26.01.2021, 16:46
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Re: Getting mortgage approved in time

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Hi Everyone,

I will be moving to Switzerland in the second half of the year (say August). However, I have found a property that I would like to purchase with a mortgage, and the seller would need the majority of the price at the end of the year (say December). I have enough cash to give the seller the 20% they ask as reservation, however, for the majority of the remaining 80%, I would need the aforementioned mortgage. Is it feasible to get this mortgage process done in about 3 months to be sure I have the money required when I need it? I am asking because I read that often in Switzerland people get their mortgage "pre-approved" before actually agreeing on a house, but as I don't currently reside in Switzerland, this doesn't look easy.

Thanks for your help in advance
3 months is ample time to get a mortgage approved. You should start shopping around already though and maybe reach out to some brokers/banks and start getting some offers in.

A little aside, I'm not sure if you've already lived in Switzerland before or the reason for your move. If it's your first time though and/or you're moving for a new job I would strongly recommend you rent first before making the commitment to buy. Many find it hard to settle and/or don't see out their probation period. Shifting a house in Switzerland isn't as easy as in other countries. You can ignore all this if it doesn't apply to you though!
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Old 26.01.2021, 16:46
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Re: Getting mortgage approved in time

Most likely no bank will give you a mortgage before you have passed the probation period. Considering this is usually 3 months you can do the math your self.
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Old 26.01.2021, 16:50
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Re: Getting mortgage approved in time

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3 months is ample time to get a mortgage approved. You should start shopping around already though and maybe reach out to some brokers/banks and start getting some offers in.

A little aside, I'm not sure if you've already lived in Switzerland before or the reason for your move. If it's your first time though and/or you're moving for a new job I would strongly recommend you rent first before making the commitment to buy. Many find it hard to settle and/or don't see out their probation period. Shifting a house in Switzerland isn't as easy as in other countries. You can ignore all this if it doesn't apply to you though!
^^^What he said.
It is very rare to find a suitable property in less than a couple of years - there are unsuitable ones on the market. But even then not many...
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Old 26.01.2021, 17:03
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Re: Getting mortgage approved in time

also I would think the lender would like you to have a financial history in Switzerland in order to do their normal risk-based calculations.

you're also non-EU (I assume)so if you are not resident and don't have a permit, you may be less able to buy than you think.

plus there is quarantine to think about.....
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Old 26.01.2021, 17:22
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Re: Getting mortgage approved in time

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Hi Everyone,

I will be moving to Switzerland in the second half of the year (say August). However, I have found a property that I would like to purchase with a mortgage, and the seller would need the majority of the price at the end of the year (say December). I have enough cash to give the seller the 20% they ask as reservation, however, for the majority of the remaining 80%, I would need the aforementioned mortgage. Is it feasible to get this mortgage process done in about 3 months to be sure I have the money required when I need it? I am asking because I read that often in Switzerland people get their mortgage "pre-approved" before actually agreeing on a house, but as I don't currently reside in Switzerland, this doesn't look easy.

Thanks for your help in advance
Honestly, this already has my scam detector on alert. As others had advised, I'd also suggest forget about buying until you get here and settle down for a while to figure out how things work here to avoid making an expensive mistake. If you ignore this advice, then at least do your due diligence on the seller/property to make sure you don't lose your 20% to a scammer.
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Old 26.01.2021, 17:28
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Re: Getting mortgage approved in time

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I have enough cash to give the seller the 20% they ask as reservation
This is a rather high amount. Be aware that a reservation contract is only binding if signed at a notary. Unless you are you know with whom you are dealing the reservation payment should be paid into an escrow account (Sperrkonto) running on the name of seller and buyer at a major Swiss bank.

https://www.hev-winterthur.ch/ratgeb...-hauskauf.html
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Old 26.01.2021, 18:12
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Re: Getting mortgage approved in time

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3 months is ample time to get a mortgage approved. You should start shopping around already though and maybe reach out to some brokers/banks and start getting some offers in.

A little aside, I'm not sure if you've already lived in Switzerland before or the reason for your move. If it's your first time though and/or you're moving for a new job I would strongly recommend you rent first before making the commitment to buy. Many find it hard to settle and/or don't see out their probation period. Shifting a house in Switzerland isn't as easy as in other countries. You can ignore all this if it doesn't apply to you though!
Thank you for your thoughts. I have lived in Switzerland for a shorter period and that is what convinced me to come back here for long term. So no concerns from that point of view

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^^^What he said.
It is very rare to find a suitable property in less than a couple of years - there are unsuitable ones on the market. But even then not many...
Probation period is a valid point, I forgot to think about that... Good point, thank you.

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also I would think the lender would like you to have a financial history in Switzerland in order to do their normal risk-based calculations.

you're also non-EU (I assume)so if you are not resident and don't have a permit, you may be less able to buy than you think.

plus there is quarantine to think about.....
I am an EU resident, so a permit would be no problem fortunately, financial history not too long in Switzerland though...

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This is a rather high amount. Be aware that a reservation contract is only binding if signed at a notary. Unless you are you know with whom you are dealing the reservation payment should be paid into an escrow account (Sperrkonto) running on the name of seller and buyer at a major Swiss bank.

https://www.hev-winterthur.ch/ratgeb...-hauskauf.html
Thank you for pointing this out. I maybe oversimplified my situation, but the fee would be payed to an escrow account of a notary, I have no doubts that the sale is not a scam.
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Old 26.01.2021, 18:20
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Re: Getting mortgage approved in time

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...I am an EU resident, so a permit would be no problem fortunately, financial history not too long in Switzerland though...
I think Sean Connery meant are you an EU citizen or not. Being an EU resident doesn't give anyone rights to live in Switzerland, as Switzerland is not part of the EU.
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Old 26.01.2021, 18:28
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Re: Getting mortgage approved in time

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I think Sean Connery meant are you an EU citizen or not. Being an EU resident doesn't give anyone rights to live in Switzerland, as Switzerland is not part of the EU.
I have an indefinite employment contract, so unless I am mistaken, as an EU citizen I should get a B permit without any problem, so I don't think this could cause a barrier
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Old 26.01.2021, 18:35
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Re: Getting mortgage approved in time

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I think Sean Connery meant are you an EU citizen or not. Being an EU resident doesn't give anyone rights to live in Switzerland, as Switzerland is not part of the EU.
if the location is London then EU residency is wrong but this does not preclude the OP being an EU citizen, of course.
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Old 26.01.2021, 18:45
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Re: Getting mortgage approved in time

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Hi Everyone,

I will be moving to Switzerland in the second half of the year (say August). However, I have found a property that I would like to purchase with a mortgage, and the seller would need the majority of the price at the end of the year (say December). I have enough cash to give the seller the 20% they ask as reservation, however, for the majority of the remaining 80%, I would need the aforementioned mortgage. Is it feasible to get this mortgage process done in about 3 months to be sure I have the money required when I need it? I am asking because I read that often in Switzerland people get their mortgage "pre-approved" before actually agreeing on a house, but as I don't currently reside in Switzerland, this doesn't look easy.

Thanks for your help in advance
Bear in mind that for a mortgage here you're going to have to provide 20% of the purchase price yourself. So is that 20% going to be that or is it a separate reservation fee? It sounds high to me if it's just reservation.

Also as others have said, you really shouldn't rush into buying a property here until you're sure you want to stay here long term. I'd forget about buying and rent a place for a few years until you're sure this is where you want to stay.
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Old 26.01.2021, 19:16
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Re: Getting mortgage approved in time

ask some local company to vet that for you - for a fee of 500-1000chf they can check all documents and legals before you make any payments etc.

I'd not do that but we all are different ..
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Old 26.01.2021, 19:54
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Re: Getting mortgage approved in time

Also be clear this is a reservation deposit not a fee

A normal reservation deposit should be an amount which would cover the additional costs if you back out and they have to re-sell the property, i.e. a few months of interest, maintenance, advertising, legal etc, and a small penalty / risk premium.

It isn't anything like 20% of the actual price (except maybe sometime in new builds where you are effectively helping fund the build? not sure if this happens in Switzerland)
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Old 26.01.2021, 19:58
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Re: Getting mortgage approved in time

A reservation deposit is usually 30,000 - 50,000 CHF
A reservation deposit of 20% sounds like a scam to me.
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Old 26.01.2021, 20:20
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Re: Getting mortgage approved in time

OP: no one here can give you an answer until you supply more and clear info.

Your location states “London” this is no longer the EU

An “EU resident” means nothing. EU citizenship does

You drip feed that you have actually lived in Switzerland before. Do you still have a Swiss bank account?

20% reservation deposit is absurd

Sorry mate, but this smells of troll...
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Old 26.01.2021, 21:00
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Re: Getting mortgage approved in time

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if the location is London then EU residency is wrong but this does not preclude the OP being an EU citizen, of course.
I am resident in the UK currently but I am from an EU country (have EU citizenship), so getting a B permit should be fine.

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Also be clear this is a reservation deposit not a fee

A normal reservation deposit should be an amount which would cover the additional costs if you back out and they have to re-sell the property, i.e. a few months of interest, maintenance, advertising, legal etc, and a small penalty / risk premium.

It isn't anything like 20% of the actual price (except maybe sometime in new builds where you are effectively helping fund the build? not sure if this happens in Switzerland)
Again, I missed some details that I thought were not that relevant for the question. So it is a newly built property with the reservation fee being 20000 CHF and they require 20% being paid within some weeks to a notary. As far as I read, this is fairly standard. Also the agency is an established one, so no worry from my side regarding that.

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OP: no one here can give you an answer until you supply more and clear info.

Your location states “London” this is no longer the EU

An “EU resident” means nothing. EU citizenship does

You drip feed that you have actually lived in Switzerland before. Do you still have a Swiss bank account?

20% reservation deposit is absurd

Sorry mate, but this smells of troll...
See above, sorry, I used the wrong phrase in a comment, I am an EU citizen, not resident I don't unfortunately have a Swiss bank account, it would be easier if I did...
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Old 26.01.2021, 22:05
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Re: Getting mortgage approved in time

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fee being 20000 CHF and they require 20% being paid within some weeks to a notary. As far as I read, this is fairly standard. ..
I have done that few times in CH - never ever was any notary holding 20% - notary is there to state that purchase takes place and it's agreed between sides - while you provide bank promise "Promesa" that after ownership is changed bank will provide founds in exchange for pice of paper (no more) that warrants security of the estate to the bank .

I'd not put any money to any escrows or alike - as it's my Bank that does it for me (gives warranty) .
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Old 26.01.2021, 22:12
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Re: Getting mortgage approved in time

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So it is a newly built property with the reservation fee being 20000 CHF and they require 20% being paid within some weeks to a notary.
So it's not 20,000 you'd be paying in immediately but 4,000 (20% of the reservation fee)? And you'd need to come up with the other 16,000 within what time frame? What about the remainder of the purchase price?

I know you think a lot of info isn't relevant but clearly it is or we wouldn't be running in circles trying to help you.
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Old 26.01.2021, 22:20
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Re: Getting mortgage approved in time

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I have done that few times in CH - never ever was any notary holding 20% - notary is there to state that purchase takes place and it's agreed between sides - while you provide bank promise "Promesa" that after ownership is changed bank will provide founds in exchange for pice of paper (no more) that warrants security of the estate to the bank .

I'd not put any money to any escrows or alike - as it's my Bank that does it for me (gives warranty) .
Interesting, were any of the properties you bought being built when purchasing? Because it is also logical for me that from the seller's point of view they want a larger sum as if anyone opted before moving in and having only paid 20000, they would lose probably more time than in a similar situation but with a property that is already used...

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So it's not 20,000 you'd be paying in immediately but 4,000 (20% of the reservation fee)? And you'd need to come up with the other 16,000 within what time frame? What about the remainder of the purchase price?

I know you think a lot of info isn't relevant but clearly it is or we wouldn't be running in circles trying to help you.
Sorry, it is 20000 initially and then slightly later 20% of the purchase price... I think my question has been mainly answered though but I appreciate all the concerns raised as these make me think through things again and again being more aware of certain things, which doesn't harm
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