After all the discussions with UBS which were going in the right direction, they sent a mail saying the plot area in the sales documentation was incorrect and the ‘actual plot area’ in the land register is lower which now results in a lower valuation. Due to this, they need more cash or the application cannot go ahead.
I have verified the plot area in both the documents and the bank is not right - it is the same in both the documents. So, either there is a misunderstanding or they do not want to give the mortgage. I have asked for clarification, let’s see..
They have been very slow in their responses and in hindsight not too keen in hteir interactions. Someone was telling me recently that they have given out too many mortgages and are pulling back now. Anyone else had a similar experience with UBS?
Not particularly with UBS, but I wouldn’t be surprised if they scaled back their mortgage budget for the year, as I’ve heard the same from other banks.
Apparently, FINMA is looking at banks regarding mortgages and finds too many of them, too often, don’t follow their recommendations, or even the banks own internal rules.
It might not be the reason why but it’s also possible it might contribute to a lower willingness from banks to bend the affordability rules and/or offer better than average rates to customers.
UBS was appalling for me. It could have been a simple renewal of a 5yr fixed rate. But delays going > 1 months, 4 (!) different people calling, each not knowing what the other had already discussed with me etc. all didn’t work. And fwiw my mortgage is a low LTV mortgage, super low risk client profile. I am puzzled how UBS even exists. Fees, fees, fees but no corresponding service for that fee level
Yes, very unprofessional. My case also got handed over to 2 different people who were both equally unresponsive.
After wasting more than a month with them and so many discussions, they sent a mail and not even a courtesy to call and explain. Anyways, need to look at other options now!
I asked her to meet and she did not address the meeting part.
There are 3 houses being built on the plot. The plot is divided into 4 parts - one for each house and one common area (Anmerkungsparzelle). The Anmerkungsparzelle has co-ownership from all the 3 houses. The problem at hand seems to be - they do not consider the co-ownership in the valuation now.
The response - “The situation is that this is a path, driveway, or walkway. Although you have CO-OWNERSHIP here, you do not have sole ownership. Therefore, it cannot be counted as living space and included in the valuation.”
What irks me is that this should be standard and should have been considered much earlier when they did the valuation - I even have the earlier valuation report from them!
She does not seem to want to talk. She’s mentioned I need to pay more cash and then even without asking if possible, ruled it out herself. Something seems to have changed…
Now going to the other option that I have with Migros Bank.
They have an Eco discount of 0.15% - has anyone availed it for their mortgage? Do they need Minergie or GEAK certification?
The house that we are buying does not have the above energy standards; I am wondering whether the Eco discount applies to the mortgage then. Is there any other way they would consider the Eco discount?
I don’t understand (but then, I have 0 experience with mortgages) -
How can a lower valuation result in a need for more cash?
Isn’t the amount defined by a “ratio” (10/20% for live-in home)?
You want to buy something for 1000k. The bank considers the maximum value at 1020k first and everything is fine. Now some parameters change and the new max. valuation is 960k. So you get 80% of that as a mortgage, which is 768k. Your own capital requirements just increased from 200k to 232k.
It‘s called the Niederstwertprinzip. Value basis is either buying price or the banks own valuation, whichever is lower.
I had the opposite experience with UBS. Very responsive and willing to go the extra mile. It helped that we have a good relationship with our banking advisor and met him several times during the mortgage renewal process (including at our place for coffee). It all comes down to personal connection.
Usually the advisor does a query to W&P to get the initial numbers and when the application goes through to the next step a collateral specialist will approve or amend it… Most probably she did a mistake when she read the plans and an advisor has no power to override valuations, for sure they won’t change it.
IMO, it is BS, but a lot of banks seem to do this now. Some offer a flexible SARON with an increase in margin. I think UBS did/does this with 0.1% premium.
A few years ago I had a LIBOR mortgage with UBS and none of this premium for flexibility or multi-year lock-in.
The old mortgage was tied to 6-month LIBOR (you could chose which LIBOR basis) and you could repay at the end of a LIBOR period without cost or penalty. I actually did pay it off a few years ago.
Multi-year lock-in works both ways, at the end of each short period they may renegotiate their margin (and if you have two mortgages then you are not able to switch).
You can lock in margin without locking in term, but this is at the discretion of the bank.
I also since it is margin, there’s no reason not to lock that in. It’s not like a fixed interest rate where the value goes up and down depending on rates, the margin is always going to be the fixed profit for the bank and the customer takes the floating rate risk.
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