Maison secondaire avec terrasse couverte et piscine obtenue avec un crédit à la consommation.
03.08.2022

Taking out a loan for the purchase of a property abroad. Quite a program!

Taking out a mortgage in Switzerland is no easy feat. What do you need to consider when buying a property abroad and is it possible to finance it in Switzerland?

 

Let's start at home

In Switzerland, as long as you have sufficient capital, you can buy a property by taking out a mortgage. 

We specify possible because it is in no way guaranteed as a series of conditions must be met in order for the lending bank to have the necessary guarantees.

These are often calculations that take into account your income, your ability to repay, your age, your history, your debts and, if applicable, the value of your retirement funds.

The reasoning in Switzerland related to the various strategies for acquiring real estate is relatively unique in Europe. The inverted logic of repaying interest over a very long period of time compared to repaying the capital as essential for some but not all, may come as a surprise if you come from countries such as Germany, France or Belgium.

As the housing stock is of high quality, demand exceeds supply and rents are very high, this configuration can make sense for the Swiss resident. Financially, as long as interest rates remain at reasonable levels, it can even be interesting. 

However, you need to have the necessary capital to get the job rolling. 20% of the value of the property to be exact, in line with the valuation made by your bank. Solutions exist to make up for a lack of capital by using, in various forms, your second and/or third pillar.

Switzerland is also relatively resilient to US-led policy rate movements, which in turn influence European interest rates. If these increase, as has been the case for several months, Switzerland will not be spared, but it could be done more smoothly than in some of our neighbours.

Why an increase in interest rates?

The Fed, the US Federal Reserve, is using the leverage of interest rates to bring about a stabilization or even a decrease in inflation, which has been impacting food and energy prices for some time now. The only problem is that the effects of  a rise in interest rates are delayed over time and it is possible, for a certain period of time, to suffer from both a rise in prices and a fall in investment, at the same time. 

 

Let's look elsewhere

In our immediate neighbours, the repayment of all interest and capital is limited in time. The average is between 20 and 30 years. In principle, therefore, you are the full owner of your property before you reach retirement age.

Of course, the price of real estate, except in some large cities, is lower than in Switzerland. Banks do not necessarily require a start-up capital and, depending on the case, finance the entire amount of the acquisition or even the notary fees.

Unlike in Switzerland, monthly repayments can exceed what you would pay in rent. It's less common here. 

Okay, but can I finance my purchase project for a second home from Switzerland?

The answer is no, but...

No, because the vast majority of banks refuse to do so. The risk is too great because in the event of non-payment, it is more complicated to seize your property abroad.

However, exceptions are possible for properties located in border areas. However, a French bank based in Switzerland is active in this segment and now offers financing solutions for your purchase of a second home in France. The solution is a somewhat hybrid form based on both a mandatory contribution and a time-limited repayment.

 

The checklist

Let's say the stars are aligned and you find a financing solution for your second home purchase. Here is a checklist to help you anticipate unpleasant surprises:

  • Find out about the notary fees in the country concerned. This can be as much as three times as high as in Switzerland

 

  • Get advice from a local lawyer who will be able to guide you through the legal customs. In some countries, a verbal agreement is already a contractual commitment. Prevention is better than cure.

 

  • Bring a translator with you if necessary. For once, mastering the finesse of the notarial lexicon  is not superfluous.

 

  • Consider the tax implications. Double taxation at the European level is in principle avoidable, but having a second residence that generates rental income will influence your tax rates in Switzerland.

 

  • If you're building a building, be sure to check the local building code and the scope of the general contractor's responsibilities.

 

And what about credit?

Good question! It is true that a personal loan offers the advantage of not being used for a specific purpose.

This allows you to compensate for a lack of capital by using the sum of your loan. Of course, this type of solution must be carefully thought out and your ability to repay must be respected.

It all depends on your funds and the value of the property as well as your other financial obligations. However, the process would be quick, does not require any heavy administrative preparation and, by using a financing platform such as the one offered  by Milenia, you would also benefit from sound advice and a process for drawing up your file that meets the quality standards imposed by the financial authorities in Switzerland.

 

Are you chaining me?

Dreams exist to be realized. Just be careful to avoid the nightmare. In Switzerland, legal and banking standards govern your procedures quite well. Options exist, but you will not escape the legal impositions and good banking practices that are in place to limit risk-taking for all parties involved.

Also, in Switzerland, we have a good reputation in terms of construction and urban planning. This is not necessarily the case elsewhere.

After all, fear should not drive your choices. Possibilities exist in border areas, via Crédit Agricole Next Bank for France, through a financing platform  to complete the necessary capital... Simply and as always, take care to do your homework, compare and gauge the right time to get started. You should also continue to keep a close eye on the rates applied, which have been constantly changing since the end of last year.

Do you need advice about your personal loan? Get in touch with us! We will be happy to advise you in a friendly and transparent manner.



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Since the Covid pandemic, companies have multiplied remote working methods. The most widely used is telecommuting. Two years later, has this method been successful?

 

Let's take a step back

During the lockdown, the world of work experienced a real shift.

Companies had to adapt and various means were put in place to ensure the continuity of services, sales, and the very functioning of the organization.

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The famous cardboard box filled with a computer, a mouse and a screen that the employees took home...

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The less fortunate had to sit on an old table at the back of their bedroom.

Children screamed in the background and parents had to juggle their work responsibilities with those of being a mother or father.

Ah... What wonderful memories!

In addition, the schedules became confused. There was no beginning and no end. We were already connected before, but now the workplace had invited itself into our home, into the family, into our home.

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The doctor's appointment, the receipt of the Zalando package, the visit of the plumber... What required us to take time off or organize ourselves differently simply fit into his work schedule, on site.

Above all, no more time wasted on the road or on the train. We earned two hours of our living every day. That's no small feat...

We weren't the only ones. Hundreds of millions of people around the world, by obligation or freely, switched to this new way of working.

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It was necessary to set up a teleworking policy to give directives on working hours, the availability of employees and managers so as not to be too intrusive in private life.

Finally, regular reviews were required to assess the effectiveness of telework policies and gather feedback from employees.

The big winners? Zoom, Teams, Skype, Webex... It was a good time and the number of users exploded

 

Video conferencing platforms

In order to establish clear and effective communication channels, it is necessary to have instant messaging and video conferencing tools to maintain smooth communication between team members. This transition is being made by different players who bring specificities specific to each sector.

You may have seen that.

Some companies will use the Zoom platform, which allows simple video conferences with a discussion thread, which is easy to use and not very connected to other services.

Others will use Microsoft Teams or Webex, which offer more integrated and secure business solutions.

Skype and Google Meet round out the market leaders, at least in Europe.

 

And what about employers?

The main fear of some employers during this pandemic?

Decreased productivity.

The prevailing thought was that employees, less supervised than before, would work less given this new organizational freedom.

The endless breaks, the last-minute shopping, the Netflix binging...

We're not going to lie, the majority of teleworkers have taken advantage of this to better combine professional and personal needs.

There have been many productivity studies, too many to mention here.

In the end, productivity dropped slightly on average, but this varied enormously depending on the functions and responsibilities.

Profiles whose tasks were recurrent completed their work more quickly and, not needing to do more, to take advantage of the time available to go about their personal business.

Others worked even harder, especially early in the morning, late at night, or on weekends.

Where some managers suffered from a lack of supervision (monitoring?) of their teams; Some employees did not take well to the distance, the lack of clarity on the establishment of rules... All of them missed interpersonal relationships and this may have impacted the corporate culture and sense of well-being.

In conclusion, there is neither one statistic valid for everyone nor a representative feeling of all employers and employees. However, there is no doubt that the world of work has changed and the effects continue today.

 

Exactly. And today?

Companies are adapting to the demands of employees, especially young people entering the workforce.

They demand flexibility, adapted schedules and, yes, telecommuting.

In Switzerland, the job market is in favour of job applicants. Companies must therefore remain attractive and take these demands into account.

Companies are implementing hybrid work modes that allow the employee more time to work from home but require them to be present for a certain number of days in the office. Again, there is no single rule.

Some organizations simply refuse the principle of remote work.

Others impose a fixed day of attendance.

Some leave the choice to their teams.

One thing is for sure, remote work is here to stay, in one form or another.

More than controlling productivity, more than managing teams and workloads, the real challenge is to keep the links between employees, to ensure proximity between managers and their teams.

Finding a balance between the attractiveness of the employer brand, individual well-being and the needs of the company; This is where the effort must be directed for the future.

 

At work and at home, Milenia is always available

Accessing credit through our financing platform has never been easier.

Everything is within your reach, with customization according to your projects, we accompany you from start to finish so that your projects can see the light of day.

For your personal loan, we offer the best market conditions with 0 application fees. Everything is designed to make your life easier.

Your loan application can be done entirely remotely, with support from your personal advisor or both at the same time.

The flexibility, adaptability, personalization of your offer... All of this is embedded in our approach and services.

As the leading credit player in Switzerland, place your trust in us so that your personal dreams and projects come true.

 

 

 

 

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Loan illustration: loan of CHF 10'000. Effective annual interests rates between 4.9% and 11.95% over a 12 month period lead to total interests of between CHF 261.80 and CHF 624.80. Duration: 6-120 months; Maximum annual interest rate (including all loan handling costs) 11.95%. Loans approval are prohibited if they lead to excess debt for the consumer. (Art. 3 LCD)

 

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