Go Back   English Forum Switzerland > Help & tips > Housing in general  
Reply
 
Thread Tools Display Modes
  #1  
Old 19.02.2007, 14:40
Member
 
Join Date: Nov 2006
Location: England and CH1844
Posts: 185
Groaned at 0 Times in 0 Posts
Thanked 17 Times in 13 Posts
clive7 has made some interesting contributions
Property mortgages

Can anyone explain to me in relatively simple terms the difference between a house mortgage in the UK secured on the property and the Swiss method. It appears to me that the security of the property in Switzerland is a separate item with its own paperwork and legal rights.
Reply With Quote
  #2  
Old 19.02.2007, 15:16
AbFab's Avatar
Forum Legend
 
Join Date: Sep 2006
Location: Zürich
Posts: 8,383
Groaned at 356 Times in 244 Posts
Thanked 12,394 Times in 4,233 Posts
AbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond repute
Re: Property mortgages

The Swiss idea is that you have two mortgages and 20% (see other threads about less) of your own money. The next 15% is like a British mortgage and is paid off over a set period, the rest is never paid off as only the interest is paid.

This never-paid-off mortgage is sometimes transferred with a house when it's sold. Or passed on to children who take over their parents' house. This is where the difference lies. As the payments exclude amortisation and Swiss interest rates are low this second mortgage is not the burden you might expect - especially as the alternative is paying rent until you die...
Reply With Quote
  #3  
Old 21.02.2007, 23:41
dannyt986's Avatar
Forum Veteran
 
Join Date: May 2005
Location: Wollerau, Schwyz
Posts: 1,835
Groaned at 26 Times in 19 Posts
Thanked 727 Times in 487 Posts
dannyt986 has a reputation beyond reputedannyt986 has a reputation beyond reputedannyt986 has a reputation beyond reputedannyt986 has a reputation beyond repute
Re: Property mortgages

In the UK there are two legal documents too... the loan and the mortgage. However you generally dont see the mortgage as this effected by depositing the title deeds to the house with the bank and the charge against the property being registered and this is all done by the lawyers.

In Switzerland you execute the mortgage documents in front of the notary.

Daniel
Reply With Quote
  #4  
Old 09.04.2007, 11:02
jbrady's Avatar
RIP
 
Join Date: Apr 2007
Location: Sunny Aargau
Posts: 1,044
Groaned at 13 Times in 9 Posts
Thanked 719 Times in 359 Posts
jbrady has a reputation beyond reputejbrady has a reputation beyond reputejbrady has a reputation beyond reputejbrady has a reputation beyond repute
Property RE-mortgages

Can anyone help me with a similar mortgage question relating to the second mortgage. I bought a smallish cheapish rundown house 3 years ago and have spent this time making improvements and medium renovations (double glazing, new bath room and toilet, Winter garden and landscaping the garden. I would really like to increase my mortgage by another 20,000 so that I can complete my final major job of a kitchen revamp. My bank says I must go to the Gemeinde and obtain a re-valuation of the home. Apparently, if this Hypothekarschuld is deemed to be larger, then the new estimation gives the bank the information over the possibility to a further Hypothekaraufstockung. Has anyone any experience of this, or I am the wrong track totally? Would appreciate any advice. In the UK, I would not have too many problems doing this.
Reply With Quote
  #5  
Old 09.04.2007, 12:17
AbFab's Avatar
Forum Legend
 
Join Date: Sep 2006
Location: Zürich
Posts: 8,383
Groaned at 356 Times in 244 Posts
Thanked 12,394 Times in 4,233 Posts
AbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond repute
Re: Property RE-mortgages

Quote:
View Post
Can anyone help me with a similar mortgage question relating to the second mortgage. I bought a smallish cheapish rundown house 3 years ago and have spent this time making improvements and medium renovations (double glazing, new bath room and toilet, Winter garden and landscaping the garden. I would really like to increase my mortgage by another 20,000 so that I can complete my final major job of a kitchen revamp. My bank says I must go to the Gemeinde and obtain a re-valuation of the home. Apparently, if this Hypothekarschuld is deemed to be larger, then the new estimation gives the bank the information over the possibility to a further Hypothekaraufstockung. Has anyone any experience of this, or I am the wrong track totally? Would appreciate any advice. In the UK, I would not have too many problems doing this.
I think it's normal. Basically your bank is avoiding you paying for a survey/valuation. Also your community should be advised anyway as improvemnets will increase the Eigenmietewert of the property and your taxable wealth (this won't cost you much though)...
Reply With Quote
  #6  
Old 09.04.2007, 12:52
Forum Legend
 
Join Date: May 2005
Location: Luzern currently
Posts: 2,565
Groaned at 3 Times in 3 Posts
Thanked 720 Times in 373 Posts
Richard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond repute
Re: Property mortgages

Quote:
View Post
Can anyone explain to me in relatively simple terms the difference between a house mortgage in the UK secured on the property and the Swiss method. It appears to me that the security of the property in Switzerland is a separate item with its own paperwork and legal rights.
There is one subtle difference. In Switzerland generally there is no such thing as deeds of title which is the part in the UK banks use as mortgage. Here there is a registry entry. Against that entry the bank issues a debt notice with first rank ie if you are insolvent then the property value belongs to the bank first and everyone else second. In that way they secure the loan. They can and often do have additional security in the form of rights to pensions or cash deposits.

I get the impression you have specific questions so pose them and I will answer when I have time.
Reply With Quote
This user would like to thank Richard for this useful post:
  #7  
Old 09.04.2007, 19:07
Junior Member
 
Join Date: Apr 2007
Location: Basel
Posts: 78
Groaned at 0 Times in 0 Posts
Thanked 22 Times in 17 Posts
draculin has made some interesting contributions
Re: Property mortgages

Is the 5% cash mandatory or it depends on the bank?. If I put together the 2nd & 3rd pilar I have more than the required 20% but I have less than 5% cash and would like to keep it just in case. Thanks
Reply With Quote
  #8  
Old 09.04.2007, 19:29
Forum Legend
 
Join Date: May 2005
Location: Luzern currently
Posts: 2,565
Groaned at 3 Times in 3 Posts
Thanked 720 Times in 373 Posts
Richard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond repute
Re: Property mortgages

Quote:
View Post
Is the 5% cash mandatory or it depends on the bank?. If I put together the 2nd & 3rd pilar I have more than the required 20% but I have less than 5% cash and would like to keep it just in case. Thanks
Its entirely up to you and the bank how high the percentage is. I have 0% cash - Tax efficient...
Reply With Quote
  #9  
Old 09.04.2007, 22:09
jbrady's Avatar
RIP
 
Join Date: Apr 2007
Location: Sunny Aargau
Posts: 1,044
Groaned at 13 Times in 9 Posts
Thanked 719 Times in 359 Posts
jbrady has a reputation beyond reputejbrady has a reputation beyond reputejbrady has a reputation beyond reputejbrady has a reputation beyond repute
Property re- mortgages

Hi Richard, my bank manager has been seemingly helpful from day one. She told me that is was a fair price to pay for the house given the amount of land and the area (Schinznach Bad). The only strange thing was that the Scüldenbrief was lower than what I paid for the house . It was an overgrown mess, occupied by an eccentric widow, which had not been really touched for 30 years. Total eyesore. Now all the neighbours and many other people have commented about my dedication, solid graft and commitment I spent making it nice. The whole group of identical detached homes have all now also been improved as a catalytic effect of my improvements and now it is a nice friendly place to be. Probably spent about 80 K of money and hundreds of hours doing this. I now understand (from AbFab) that now the Geminde must calculate a new Eigenmietewert and then I should probably then pay a Notar to amend upwards the Scüldenbrief. (And probably the insurance values). I presume my thinking is correct here.
I just have a niggling worry that for some unforeseen reason the Gemeinde valuer may not think the house is worth any more than I paid for it. (Hopefully this is not the case) – I will pop over to the Gemeinde with a Swiss friend on Weds – I will be picking up my first Swiss ID (just got the official letter through last week ;-). I would not even think of selling the place anytime soon – it would take me forever to find such a friendly cul-de-sac next to a forest and river. Also I have moved enough in my life. It would be nice, however, to get some official valuation – as a yardstick about any future money and effort I should spend on the place. There would be no point borrowing money and throwing it down a black hole
I did not really plan to buy the house – it happened after a random call to Remax and before I knew it I was in the bank with the family of the Widow, signing papers and arranging a meeting with the Notar. It felt right and meant I could escape 6 years of living in a noisy and expensive apartment in very central Zurich. No regrets and I enjoyed the project. However , there would be no point borrowing any more money and throwing it down a black hole. It would also be nice to add 20K to my mortgage and stop pouring my own monthly money into this house.
My main problem is I am having, is understanding the differences in values of what you could sell a house for, what the Scüldenbrief value is and what the Eigenmietewert would be. Hopefully, I can set the ball rolling in two days.
Reply With Quote
  #10  
Old 09.04.2007, 22:44
Forum Legend
 
Join Date: May 2005
Location: Luzern currently
Posts: 2,565
Groaned at 3 Times in 3 Posts
Thanked 720 Times in 373 Posts
Richard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond repute
Re: Property re- mortgages

Quote:
View Post
Hi Richard, my bank manager has been seemingly helpful from day one. She told me that is was a fair price to pay for the house given the amount of land and the area (Schinznach Bad). The only strange thing was that the Scüldenbrief was lower than what I paid for the house . It was an overgrown mess, occupied by an eccentric widow, which had not been really touched for 30 years. Total eyesore. Now all the neighbours and many other people have commented about my dedication, solid graft and commitment I spent making it nice. The whole group of identical detached homes have all now also been improved as a catalytic effect of my improvements and now it is a nice friendly place to be. Probably spent about 80 K of money and hundreds of hours doing this. I now understand (from AbFab) that now the Geminde must calculate a new Eigenmietewert and then I should probably then pay a Notar to amend upwards the Scüldenbrief. (And probably the insurance values). I presume my thinking is correct here.
I just have a niggling worry that for some unforeseen reason the Gemeinde valuer may not think the house is worth any more than I paid for it. (Hopefully this is not the case) – I will pop over to the Gemeinde with a Swiss friend on Weds – I will be picking up my first Swiss ID (just got the official letter through last week ;-). I would not even think of selling the place anytime soon – it would take me forever to find such a friendly cul-de-sac next to a forest and river. Also I have moved enough in my life. It would be nice, however, to get some official valuation – as a yardstick about any future money and effort I should spend on the place. There would be no point borrowing money and throwing it down a black hole
I did not really plan to buy the house – it happened after a random call to Remax and before I knew it I was in the bank with the family of the Widow, signing papers and arranging a meeting with the Notar. It felt right and meant I could escape 6 years of living in a noisy and expensive apartment in very central Zurich. No regrets and I enjoyed the project. However , there would be no point borrowing any more money and throwing it down a black hole. It would also be nice to add 20K to my mortgage and stop pouring my own monthly money into this house.
My main problem is I am having, is understanding the differences in values of what you could sell a house for, what the Scüldenbrief value is and what the Eigenmietewert would be. Hopefully, I can set the ball rolling in two days.
Lets start with the Schuldbrief. The English word for this is a lien. It is the amount of the claim in the first rank that the bank has on your property and it is the right to claim your property in the event of default or insolvency on your part and to hold your property as their own until the debt is discharged. The only time the value of the schuldbrief will change is if you increase the amount of indebtedness. So your schuldbrief will be lower than the value of the property otherwise the bank does not have sufficient security with your property to recover their money. The bank will do this in several ways such as having you pay a deposit or having other collateral or by you buying the house undervalue...

As such as you can see the Schuldbrief is a part of the mortgage and you will not generally pay a penny for it - it is a bank requirement and they calculate this in with the cost of their "service".

Eigenmietwert is completely different. This is a cantonal measured value which is meant to represent the value of your house if you were to rent it. This is for tax purposes really and offsets your ability to offset your interest payments. If you have substantially improved the house then you should be reassessed. Note that this works hand in hand with your house insurance. Not your contents note. Hence if the Eigenmietwert assesses your house as newly being worth 100K more then you will find a revised insurance poliy coming for your house. This insurance is the amount of money required to rebuild the structure of your house.

Note that for your eigenmietwert to change you should have structurally altered the building which will have required a building permit (sorry can't remember the correct English for this...) from the Gemeinde. Hence if you have not actually changed anything then your Eigenmietwert does not increase as the cost of rebuilding remains the same. Use the basic rule here that if they don't come to you, don't remind them...

As to the value of your house. The easiest and cheapest way to do this is to request from the Bank an additional - lets say - 50K loan or better still ask the bank what the maximum is they would be prepared to lend. They will send a valuer and then will calculate how much risk they want to undertake etc. The end figure will then be more or less the value of your house. You can then ask Remax what they think and how long it would take to sell etc. Note here though, that you can have a value on your house but never sell it if the market is not interested in your property.

Anything I have missed?
Reply With Quote
This user would like to thank Richard for this useful post:
  #11  
Old 09.04.2007, 23:23
jbrady's Avatar
RIP
 
Join Date: Apr 2007
Location: Sunny Aargau
Posts: 1,044
Groaned at 13 Times in 9 Posts
Thanked 719 Times in 359 Posts
jbrady has a reputation beyond reputejbrady has a reputation beyond reputejbrady has a reputation beyond reputejbrady has a reputation beyond repute
Re: Property mortgages

Thanks very much for such a detailed and complete explanation - this has filled in all the mysterious valuation elements for me. I think my main problem appears to be I did not involve the Gemeinde in any of my major changes - nothing really structural (yet) - mainly improvements - the double glazing and bathrooms main building works were done by the local builders in the Gemeinde. They appear to be as thick as thieves within this village. I think I will go and speak with the Bank first, prior to pushing the Gemeinde - as you point out, there is no point in increasing values for no reason - better if the bank can arrange a survey as it is they who I want to lend me the extra money. Many thanks again for your response and help. I wish I had found this forum a long time ago - feel like i have just entered a world which I lost years ago.
Reply With Quote
  #12  
Old 10.04.2007, 07:04
Forum Legend
 
Join Date: May 2005
Location: Luzern currently
Posts: 2,565
Groaned at 3 Times in 3 Posts
Thanked 720 Times in 373 Posts
Richard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond repute
Re: Property mortgages

Quote:
View Post
Thanks very much for such a detailed and complete explanation - this has filled in all the mysterious valuation elements for me. I think my main problem appears to be I did not involve the Gemeinde in any of my major changes - nothing really structural (yet) - mainly improvements - the double glazing and bathrooms main building works were done by the local builders in the Gemeinde. They appear to be as thick as thieves within this village. I think I will go and speak with the Bank first, prior to pushing the Gemeinde - as you point out, there is no point in increasing values for no reason - better if the bank can arrange a survey as it is they who I want to lend me the extra money. Many thanks again for your response and help. I wish I had found this forum a long time ago - feel like i have just entered a world which I lost years ago.
Hi Just so you are aware of this Double Glazing is a structural change and the builders should inform the Gemeinde although they often choose to ignore minor changes like this unless they accumulate ie there are several of them...
Reply With Quote
  #13  
Old 10.04.2007, 07:15
AbFab's Avatar
Forum Legend
 
Join Date: Sep 2006
Location: Zürich
Posts: 8,383
Groaned at 356 Times in 244 Posts
Thanked 12,394 Times in 4,233 Posts
AbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond repute
Re: Property mortgages

Quote:
View Post
Thanks very much for such a detailed and complete explanation - this has filled in all the mysterious valuation elements for me. I think my main problem appears to be I did not involve the Gemeinde in any of my major changes - nothing really structural (yet) - mainly improvements - the double glazing and bathrooms main building works were done by the local builders in the Gemeinde. They appear to be as thick as thieves within this village. I think I will go and speak with the Bank first, prior to pushing the Gemeinde - as you point out, there is no point in increasing values for no reason - better if the bank can arrange a survey as it is they who I want to lend me the extra money. Many thanks again for your response and help. I wish I had found this forum a long time ago - feel like i have just entered a world which I lost years ago.
You may also be eligible for tax deductions for some of the changes (this varies from canton to canton) and grants (though this may now be a bit late) for improved insulation like the double glazing...
Reply With Quote
This user would like to thank AbFab for this useful post:
  #14  
Old 10.04.2007, 18:14
jbrady's Avatar
RIP
 
Join Date: Apr 2007
Location: Sunny Aargau
Posts: 1,044
Groaned at 13 Times in 9 Posts
Thanked 719 Times in 359 Posts
jbrady has a reputation beyond reputejbrady has a reputation beyond reputejbrady has a reputation beyond reputejbrady has a reputation beyond repute
Re: Property mortgages

Much appreciated advice - I will let you know what the outcome is. Tomorrow will be a good chance to practise my communication abilities and proceess understanding in German (eese) at the Gemeinde. Until then - cheers
Reply With Quote
  #15  
Old 18.04.2007, 19:13
jbrady's Avatar
RIP
 
Join Date: Apr 2007
Location: Sunny Aargau
Posts: 1,044
Groaned at 13 Times in 9 Posts
Thanked 719 Times in 359 Posts
jbrady has a reputation beyond reputejbrady has a reputation beyond reputejbrady has a reputation beyond reputejbrady has a reputation beyond repute
Re: Property mortgages

Progress report. I went to the Gemeinde and they told me to contact the AVA (Aargauishes Versicherungsamt) to arrange for the insurance value of the property to be increased. The person there asked me for an estimate of how much work I had made on my house and then increased the insured value immediately on the phone as an interim measure (by 65 K, which I think is standard). They then sent this info to someone who will telephone me to arrange an inspection to assess the actual valuation of my changes to the property. Once this is complete, the Gemeinde can re-assess the Eignemietwert (I think this has similararities to the "ratable value" in the days before Community Charge in the UK? - or maybe the Window tax). THEN, I can go to the bank and ask for the increase to my mortgage. By which time I will have probably saved up the amount I wished to borrow. :-). Seriously though, this has been very educational and I will keep you posted of anything else untoward which occurs during this small project. Perhaps the procedure is different in Zurich or other Kantons, but hopefully this may help somebody in a similar situation.
Reply With Quote
This user would like to thank jbrady for this useful post:
  #16  
Old 18.04.2007, 19:40
Lob's Avatar
Lob Lob is offline
Forum Legend
 
Join Date: Nov 2005
Location: -
Posts: 7,795
Groaned at 42 Times in 37 Posts
Thanked 1,973 Times in 1,060 Posts
Lob has a reputation beyond reputeLob has a reputation beyond reputeLob has a reputation beyond reputeLob has a reputation beyond reputeLob has a reputation beyond repute
Re: Property mortgages

indeed, jbrady, this is where harnessing the power of the people benefits many many others. This thread is exactly what EF is about
Reply With Quote
  #17  
Old 01.05.2007, 00:49
Forum Legend
 
Join Date: May 2005
Location: Luzern currently
Posts: 2,565
Groaned at 3 Times in 3 Posts
Thanked 720 Times in 373 Posts
Richard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond repute
Re: Property mortgages

Quote:
View Post
Progress report. I went to the Gemeinde and they told me to contact the AVA (Aargauishes Versicherungsamt) to arrange for the insurance value of the property to be increased. The person there asked me for an estimate of how much work I had made on my house and then increased the insured value immediately on the phone as an interim measure (by 65 K, which I think is standard). They then sent this info to someone who will telephone me to arrange an inspection to assess the actual valuation of my changes to the property. Once this is complete, the Gemeinde can re-assess the Eignemietwert (I think this has similararities to the "ratable value" in the days before Community Charge in the UK? - or maybe the Window tax). THEN, I can go to the bank and ask for the increase to my mortgage. By which time I will have probably saved up the amount I wished to borrow. :-). Seriously though, this has been very educational and I will keep you posted of anything else untoward which occurs during this small project. Perhaps the procedure is different in Zurich or other Kantons, but hopefully this may help somebody in a similar situation.
AVA is the insurance company for structural rebuilding I mentioned earlier. I forget to mention it is a compulsory insurance policy :-(

Eigenmietwert has nothing to do with rateable value in Switzerland the concept generally does not exist if you own the property.

Anyway the question I had seeing as you have had a "strange" experience is which bank - I use a cantonal bank and they provided the survey for themselves to assess the maximum level of loan they would approve.
Reply With Quote
  #18  
Old 01.05.2007, 07:38
jbrady's Avatar
RIP
 
Join Date: Apr 2007
Location: Sunny Aargau
Posts: 1,044
Groaned at 13 Times in 9 Posts
Thanked 719 Times in 359 Posts
jbrady has a reputation beyond reputejbrady has a reputation beyond reputejbrady has a reputation beyond reputejbrady has a reputation beyond repute
Re: Property mortgages

Hello Richard - it is the Aargauische Kantonalbank which I use.
I am begining to believe that because I only asked for a relatively small increase in my mortgage, they are just looking a way whereby they can rubber stamp the paperwork and avoid going through the costly process of survey, notar, life insurance extensions etc. Most of the people I have now spoken with (armed with the knowledge gained from you and englishforum) agree with your assesment that you are better off "letting sleeping dogs lie" when it comes to increasing the Eignemietwert, unless you have made some really major changes. (in which case you have no choice, because you will need to have applied for permission to make these changes).
Next week I have an appoinment with my bank manager, I think face to face is better than the ping pong of mails with which I have used to talk with her so far. I am sure something positive will come from this meeting and my new Kitchen will become a reality. Will keep you posted. Thanks
Reply With Quote
  #19  
Old 01.05.2007, 10:54
miniMia's Avatar
Forum Legend
 
Join Date: Apr 2007
Location: romandie
Posts: 9,975
Groaned at 101 Times in 92 Posts
Thanked 9,106 Times in 4,522 Posts
miniMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond repute
Re: Property mortgages

I do love this forum because as you say, we learn from others experience which can help if we find ourselves in the same situtation one day.

Now, I have a few questions about the swiss property markets that I've been wondering about:

-Why do we never pay off the mortage? I don't quite understand the benefit of this? Doesn't this keep the market prices artificially high?

-Why do they keep the insurance value artificially low? I mean if you really did (god forbid) need to rebuild the house, you could never get it done with the amount of the insurance value. (Even if the insurance value only includes the structure & not the price of the land, I still don't think you could rebuild the house for some of the low ball estimates I've seen.)

-undervalue/overvalue.... I've seen instances where the property where the _bank_ valued at 600k but the person bought it at 400K... But I've also seen the opposite: bank valued at 400K and the couple bought for 600k (receiving only a mort for 80% of the 400k and putting the rest in as cash.) What is going on? (numbers just for example purposes)

-how do bank valuations relate to insurance valuations, if at all?

Personally, I think the Swiss real estate market is crazy! Can someone suggest another exlaination?? So any insight would be appreciated.

Last edited by miniMia; 05.05.2007 at 00:38.
Reply With Quote
  #20  
Old 01.05.2007, 11:11
AbFab's Avatar
Forum Legend
 
Join Date: Sep 2006
Location: Zürich
Posts: 8,383
Groaned at 356 Times in 244 Posts
Thanked 12,394 Times in 4,233 Posts
AbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond repute
Re: Property mortgages

Hi MiniMia,

You are right about the property market being crazy. Well, I would say that it isn't even a market as we understand it. The minority of Swiss who buy tend to stay put and many transactions are by word of mouth than the open market.

To try and answer your questions:

- never-paid-off-mortgages. I asked my bank manager and he reckoned it was a good deal all round. The banks had a guaranteed load at 2% above the interest rate. As long as you can get tax relief on the interest payments and interest is all you pay, there is little motivation to pay off the mortgage. The Swiss tax system would actually penalise you for doing so and your increased wealth would be taxed (gently).

- I don't think insurance cover is 'artificially low'. Presuming that the land cannot be destroyed, house owners should have cover for full rebuilding costs - these may be well below the market value if the property were sold.

- I have only come across lenders undervaluing property. This is to safeguard their loan against market movement downwards.

- The insurance value should be the rebuilding costs, less land. The banks valuation should be what they are willing to risk lending. I doubt these would be the same - or anywhere near the market value (ie what the property would fetch if sold today.)

Hope this helps...
Reply With Quote
Reply




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Property purchase with B permit clive7 Housing in general 8 05.07.2009 10:00
laywers & property advice jojo Other/general 2 11.01.2007 10:55
Taxation and property values in Villeneuve clive7 Housing in general 0 27.12.2006 23:20
Property Finders sharon Other/general 10 19.12.2006 12:20


All times are GMT +2. The time now is 20:29.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2021, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0