Hi all, I feel like there have been a lot of real estate discussions over the last couple of days on the forum, but would still like to get some personalized advice on the financing our or project, especially how much we should put down.
We are buying a single family home built in 1981 which needs to be extensively renovated, and are already registered owners in the Grundbuch, but usage rights (Schaden-Nutzen) will only transfer on 01.10.24., therefore we got a Zahlungsversprechen from my employer (a Swiss bank), but have not yet taken out a mortgage / signed a mortgage contract. We could still get a mortgage somewhere else against a small penalty fee, and in fact, are most likely to do that, as I’m leaving my current employer and joining another financial institution with beneficial employee conditions for mortgages (Saron 25 bps / fixed 10 bps above financing rate).
We bought the house somewhat under market for 1.0M, bank valuation was around 1.2M. The renovations are estimated at 575k, so we are looking at 1.575 M total investment, which needs to be financed. Our combined income is around 230k p.a. (depending on bonuses). Our assets (wife and myself), are structured as follows:
Asset | His | Hers |
---|---|---|
Cash and savings accounts | 149k | 20k |
Early Inheritance (cash) | 0 | 300k |
ETF Portfolio | 83k | 28k |
Cryptos | 16k | 0 |
Pension fund 2a** | 154k | 50k |
VIAC 3a | 38k | 21k |
Total | 440k | 419k |
**My pension fund is quite good (high returns) while her’s is hot garbage.
Know, I’m wondering how we should structure the financing. Given the affordability calculations, we probably have to bring in at least 440k (28%), but I was considering upping our own capital to around 575k (36.5%), therefore avoiding amortization requirements. On the other hand, we can get quite cheap mortgage rates and opportunity costs are obviously higher if we do this. In terms of assets to use, my wife will contribution the 300k early inheritance and I was planning on liquidating my ETF’s and using the cash, but that does still fall short 43k. So I’m struggling a bit on how to structure this best.
Any suggestions? Things I’m not considering?