Light in the financing jungle
If you plan to buy a home, you would be well advised to allow plenty of time to arrange for financing and to carefully consider your decision. For instance, the interest rate is of central importance in deciding on the right mortgage, but it’s not the only important consideration. Over the recent years we’ve seen multiple adjustments of interest rates. And only if you are aware of this will you not simply sign the first contract your house bank offers. We recommend that you obtain several quotes and compare them.
Banks recommend combining different mortgages. This type of diversification hedges against the risk of rising interest rates. One possibility, for example, would be to sign a Libor, a five-year and a ten-year mortgage. To reduce the risk of rapidly rising, short-term rates, it should also be stipulated that at any time after a payment period (one, three or six months), the bank can also convert the Libor mortgage into a fixed or variable-rate mortgage.
In the “general terms and conditions” of the mortgage, it will be stated how the financial institution is to handle a “settlement waiver”. This sets forth what happens to the account balance and the savings in case the bank goes bankrupt. In many cases, only balances up to CHF 100,000 are protected. This clause need not be accepted, and the mortgage customer should have this confirmed in writing. And finally, when comparing different offers, it should also be noted for how many days the interest rate will be charged. Internationally, 365 days is customary, whereas in Switzerland only 360 days is expected. Depending on the mortgage amount, this can easily amount to a difference of CHF 200 per year.
Are you unsure how you want to finance your new apartment in the evolving resort of Andermatt Swiss Alps AG? Many banks are offering attractive financing plans for apartments in the apartment houses and for the Gotthard Residences. The experts in our sales team will be glad to advise you independently and professionally.
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