Here, me again.
Having somehow “solved” or at least better understood other dependencies, now I need to make a decision: which financial institure to select.
Key-Facts: apartment purchase “on paper”. Delivery date November 2023.
In few weeks, I will go to the notary for the so called “promise of payment”, where I will give the 20% of the price together with the letter from the hypo-firm which. I have now 2 options to consider:
A) Insurance Firm. Hypo+3a (life insurance) to get better conditions.
- penalty-free for anticipated exits (e.g. apartment selling)
- given a due-date for the mortgage start, possibily to anticipate (if aparment is finished early)
- given the due-date for the mortgage start, 0.05% interest applied to each month delayed (e.g. , given insterest rate 1.5%, due-date November 2023, effective release Feb 2024, new rate 1.6%
- strict affordability calculation (33%, not more)
B) Bank firm. Hypo+3a (without any mandatory option)
- No penalties in case of release date postponed. Only requested to pay interest by the start of the contract
- less strict affordability calculation (also 37% may be accepted, under specific conditions)
- no penalty-free for anticipated exits (e.g. apartment selling)
- no possibility to anticipate the start of the mortgage (in case of apartment ready before the ETA)
To me, it’s stilla 50-50 score. None of those has an elevator picht which can overtake the other. What do you think?
Here I’m not considering the % rates, this dimension is too early to evaluate. But this leads into another consideration.
At this stage, at the notary I need to bring this letter / Zahlungsversprechen which - to my best knowledge - is not fully binding me to that specific financial institute.
Likely there are penalties (someone says 500 CHF, other 2-3K or more), but if next year I will find a solution which could offer 0.5% difference or more (which turns into c.ca 30k CHF, for a fixed 10y mortgage), it’s worth to pay this penalty. Some of you know more about this kind of penalty?
In other words: now I could even go with option A or B indinstinctly (and DO NOT fix any rate), get the Zahlungsversprechen, do the 20% downpayment,* present the letter and next year start to see the % trend and decide the good moment to fix the rate.
If A or B does not offer at that time a very competitive rate, I can call-off, pay the penalties (when required) and search for another institure. Most likely, additional costs are with the notary as this information needs to be registered.
(*) The bank will create a dedicated account where this 20% needs to be deposited and blocked till the date of the payment. Then it will be used to transfer periodically the monthly payments. Will be also the same for the insurance firm?
Thanks for your patience to read all this essay
Any inputs, always super appreciated.