Buying a flat / when to apply for a mortgage

Hi folks,

I signed a «promesse de vente» regarding a flat to be built and finished in 2023. I paid the 10% in cash and I am now in search of the best financement for the 90% left. I have the other 10% in second and third pillars. I have more or less 18 months to find a financement.

My financial situation in order to apply for a mortgage is not the best currently: temporary work contract, 80% for a long term mission scheduled to end next Spring. I expect to be able to increase my income of at least 20% to 30% after my job change. Currently my income is 95k CHF / year, my previous job was at 140+ kCHF / year, my next job will probably be around 130k CHF / year. Flat price is 740k CHF.

For legal reasons I had to buy the flat with a member of my family which is retired and cannot provide any funds. Due to this, the bank that supported the sale of the flat and made the « financial due diligence » for the seller gave the green light for a financement, but only with a down-payment of 30%, which I cannot afford at the moment. The explanation of the 30% of own financement (instead of the usual 20%) was because of the retired member of my family. Apparently a directive of the Swiss Bankers Association obliges the banks to apply a 30% « cash » financement instead of 20%, probably due to the higher risk represented by a retired person in comparison to a younger, active person.

Do you think that it is worth to start searching for a financement now, or would you wait until I have changed jobs with a better financial situation next year?

Any input welcome.

Many thanks in advance.

1 Like

12 months before the other 90% are due to be paid. I wouldn’t start looking sooner than that.

2 Likes

Many thanks for the quick answer, that would indeed solve the problem.

According to the pre-sale agreement, the 90% is due when the final sales agreement will be signed (i.e. even later than twelve months before).

But I guess the conditions (rate etc.) I could get now are probably better than what I will be able to get in, let’s say, 18 months?

Probably not due to 2 reasons:

  1. Your current salary isn’t as high which might even make it hard to get other offers (for a 740k house with 20% downpayment you’ll need ~125k gross anyway).

  2. Forward costs for anything above 4-6 months in advance.

Do you realized that this means that if that retired person dies, half of the apartment is going to the inheritance mass and you might need to pay out siblings if there are any? Would be a big no-go for me.

3 Likes

Yes thank you, this has already been discussed/settled. I am one of the heirs.

My bank is not even fixing the rate one month before getting the keys.
If something goes wrong you will pay all the interests, no matter what

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