The ability to enter into a mortgage on the property you want to buy as a real estate investment remains one of the most common solutions to acquiring the necessary resources to cover the missing capital portion for the desired property’s bare value.
As mentioned in the chapter on owner’s equity, the Swiss banking system is concerned with covering up to a maximum of 80% of the property value through funding, keeping in mind of course the profiles that the applicant must meet to guarantee this mortgage.
The simplest, of course, is to have an income that over the life of the mortgage carries out the twofold task of supporting the needs of the individual and his family and at the same time covering the periodic instalment value. Swiss banks regulate their creditworthiness threshold by always suggesting an expense is planned that does not exceed 30% of your monthly budget.
Added to this simple rule is the consideration of the data of the individual requesting funding. Normally, Swiss banks grant loans with more frequent amortizations and of a shorter duration for people applying for the loan at a later age (from age 60).
First of all, some common sense advice that may come in handy in other areas is to contact multiple lenders and receive different proposals, comparing them with each other and, after a careful assessment, to opt for the one that seems to be the best for your overall personal and financial situation at all levels.
Here is a quick summary to distinguish between the different mortgages available and their possible amortization.
The choice of the most appropriate funding instrument for you must be based on the right mix of considerations, looking at both the current situation and future market trend forecasts, with an eye on the progress of your work situation or general sustainability during the mortgage period.
In recent years, the volatility of foreign financial centres has not eliminated the solid reality of the Swiss banking system; however, interest rates are at what may be considered a particularly quiet and calm period. The decrease in the cost of money is indeed the result of policies to stimulate currency circulation to encourage investment and consumption. This particular juncture gives buyers today the ability to enter into fixed-rate mortgages at particularly advantageous rates that keep you safe from any future increases in borrowing costs.
Really low interest rates, however, are also an attractive condition for those not willing to bet on level rates over the coming years and who want to try a variable rate mortgage, perhaps short-term. This ensures that even a possible change in the cost of money will not overly affect the rate level and does not constitute increased expenditure compared with a fixed rate instrument.
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