Our clients share their story... Difficulties in obtaining a mortgage in Switzerland
Nathalie and her husband decided to buy a property in Switzerland and found themselves faced with a mortgage application process that was completely different to what they were used to and a lot of new terms that they were unfamiliar with. Luckily, they were able to rely on the support of their Resolve advisor who explained everything to them and helped them complete their construction project.
How did you hear about Resolve?
When we started talking about our project to build a villa someone recommended Resolve to us and we realised that some of our friends had already used your services. They gave us some excellent feedback about how you helped them during their construction project. This gave us the confidence to contact you.
What was your experience like?
Well, this wasn’t our first property acquisition. We had already bought property in France but the Swiss system is quite complicated in comparison. There were lots of different things that had to be taken into account and we had to position ourselves on a range of subjects. For example, we had to determine the mortgage duration that would be best for us based on our age and think about the “forward” to know if we needed to block a rate straight away.
On top of all the new things to remember, there are also quite a lot of subtleties in Switzerland as we don’t use the same vocabulary at all when buying property in France. For example, in Switzerland the term “hypothèque” instead of “crédit” is used for mortgage. “Plus-value” is another example of a term that has different meanings in France and Switzerland. In France, this term refers to the profit made when selling a property but in Switzerland it refers to the costs incurred by adding elements to the building. And I had never heard of mortgage notes (“cédules hypothécaires”) or liens (“gages”) before!
Did the support from Resolve help you to overcome these difficulties?
We had a lot of questions, because behind the terminology there is a reason these words and concepts have been chosen. Working with Resolve really helped us. I don’t think we would have been able to understand what the implications for our mortgage would have been without them. Even just to know how we should position ourselves because we were buying at a time when the rates were very volatile and rising. This creates a lot of insecurity among buyers.
In France, once you have agreed on a rate it is blocked. In Switzerland, you have to wait until you have signed for the rate to be blocked. We had to wait to receive the documents from the town hall, and the more time passed, the more we saw rates rise. Despite this, we were a lot less stressed because we were accompanied.
How else did Resolve help you?
They helped us with our mortgage application and also advised us on the tax implications of our acquisition. We currently live in Zurich and were buying a property in French-speaking Switzerland. Resolve explained what would happen when we changed from being renters to property owners and when we changed canton. They also advised us on the different forms of amortization.
What did you particularly like about your relationship with your advisor?
We found it really helpful to have someone that we could ask our most candid questions. We particularly appreciated the fact that the team at Resolve and our advisor were always on hand to help us. We were always able to quickly get an appointment with our advisor, usually within 24 hours. We could call him directly when we needed to move forward with something quickly. He was very proactive.
Do you think getting financial advice is indispensable when purchasing real estate?
I thought that it wasn’t very common to work with a real estate broker in Switzerland. Even the percentage of people that challenge their bank is very low. I mean, we’re talking about a lot of money because real estate prices in Switzerland are quite high so I find it really surprising that Swiss people don’t use this approach! It doesn’t cost a lot to at least see what other lenders are offering!
Both myself and my husband work and we aren’t familiar with the Swiss system so we thought that it made sense to compare different lenders and get an opinion from an expert that could tell us whether an offer was really competitive or not. Resolve’s support was really helpful, our advisor made us feel reassured and helped us to make the right choices.
Why do you think that a lot of people don’t use these kinds of services?
Maybe because a lot of Swiss people aren’t buying their first property so this support is less relevant. But seen as how rates are so volatile at the moment, perhaps they should consider it. It can be a good idea to challenge the rates that their bank offers, quite simply.
In any case, whether it is for a first acquisition or a construction project, it makes sense to get help from experts given the complexity of the financial arrangements.
I can also understand that sometimes people don’t have a positive opinion of mortgage brokers. They think that they aren’t neutral and therefore won’t give them the best offer.
Did you have any doubts about this?
From the very beginning our advisor talked about neutrality to explain his position. He was very transparent about the fact that he did not stand to gain anything financially by recommending one establishment over another to us. I think that it was good to clear the air right at the start. At least we knew what to expect and it meant that we were able to move forward with full knowledge of what was going on. He explained everything clearly and transparently, he was very reassuring. It was important for us to know that we were going to get the best offer for us and not depending on the commission that our advisor would get.
We quickly realised that we would never have felt comfortable, reassured or would have been able to make the right choices if we didn’t have the support of our advisor and if he hadn’t explained everything to us. We were very satisfied with the support that we had and would definitely recommend Resolve.
If you would like to benefit from tailored support for your real estate project, please do not hesitate to contact one of our advisors.