FISCUS MORTGAGES - INFORMATION AND ADVICE

Mortgages & Property in Switzerland

Guidance notes for purchasing a property in Switzerland.

1) Please ensure that you will have full title to the property on completion and that the appropriate documents are available for the lender.

2) Whilst all reasonable steps will be taken to secure the loan on your overseas property as soon as possible, delays may occur due to the Swiss legal and administration system.

3) Check with the estate agent/notary that you are aware of the costs charged by the legal & government authorities for purchasing a Swiss property.

4) To avoid any problems, it is strongly advised that you secure the financing of the property before signing the "promesse de vente". The bank will require a copy of this document to be forwarded. However you are able to sign this contract with the clause “subject to mortgage finance” as the contract, once signed is legally binding (just keep in mind that the deposit paid at the signing will be lost if the sale is not completed, the deposit amounts usually to 10% of the purchase price).

5) Please be aware that the Notaire may be incorporating within his charges, costs for assigning the mortgage and creating the mortgage certificate. You should establish with the Notaire the actual cost before signing any contract (you could consider 5% of the purchase price as a maximum).

6) It is advisable to arrange your mortgage finance before agreeing to purchase a property.

7) A life assurance policy could be requested depending on the lender’s credit policy. A fire insurance is in any case requested.

8) Not all Swiss lenders carry out valuations / surveys. You may wish to have one carried out independently.

9) Properties can be purchased either individually, in joint names or in the name of a company. For advice regarding whether to purchase under a company, independent legal advice should always be sought.

10) A Swiss bank account will be required and you will be requested to come for signing the proper documentation before the release of funds.

How much can I borrow & what proof of income is required?

All loans need to be supported by a minimum requirement of proof of income (income arising from renting your property will be included in your income) i.e. if employed - copies of your last three month's payslips/Employer’s Reference together with copies of your last 3 month’s Personal Bank Statements will be required or alternatively if you are self-employed - copies of your last two years Audited Accounts & copies of both your last 12 month's Business and last 3 month’s Personal Bank Statements will be required on application.

Your loan is based on your joint net “take home” pay and is calculated on an affordability basis. All your existing liabilities including any mortgage/rent payments, personal and bank loans, credit cards (if the balance is not cleared on a monthly basis) and any maintenance – ie: Divorce - payments together with your proposed Swiss mortgage payments should not exceed 30% of your net income.

Maximum mortgage loan shall not exceed 80% of the market value of the property. The market value is determined by the bank (either internally through its own experts or externally through independent experts).

Example:

Net joint monthly income £ 4,000 times 30% of that figure is £ 1,200, minus existing monthly mortgage payment £ 300 – No other liabilities. This leaves a balance of £ 700 for a proposed French Mortgage payment.