I guess it's a dummy question, but I never looked into this and can't find easily any info on this. Really just starting to get myself into all of this.
In example, if one can afford to buy a car, or do a large payment for whatever, and wants to avoid to unnecessarily pay the interest on leasing or credit, so cashes out, and then finds in the next period an interesting property for which you need to pay in front 20-25%, and just misses the amount is it possible to take the cash credit then to cover this difference?
Or, if you are looking from time to time for a house in a given range, you should make sure that you always have enough funds to cover this, and take out the credits/leasings etc for any larger purchases you may need in the meantime?
I guess this increases a bit the risk for the bank that you'll do the payments, but let's say it's not a problem for that, and just a problem to have enough time to save enough for the deposit before the property is gone from the market, after you do a larger upfront purchase.
I mean, the two are absolutely the same, cost wise, but I don't know if it makes any difference to the bank.
No, as you will need further financing for the house. And probably, if the bank finds out you already had to borrow for the deposit, you may not qualify or only at a much higher interest rate.
But I guess this is the same if you have an outstanding loan/leasing for the car or whatever? Otherwise it makes no sense.
I mean, I would never venture into this financially if it stretches too much, the question is just should I always keep the amount which is enough for deposit + initial costs if looking casually for a house/flat with taking out credits for any purchases, or I can go below, for a while, knowing that still if some really good house becomes available I can do this then.
I'm not exactly sure where you are trying to go with this, but I think you need to be very clear on one thing: Representing or submitting any information in support of a loan or mortgage application that is not true falls within the definition of fraud - obtaining money by deception. And a bank would be well within their rights to make a complaint about you. Most probably won't provide you pay everything back immediately.
It can be done if you take a personal loan in one tax year and the mortgage in another. If you shout really loudly at your relationship manager that they've moved the goal posts it can be done in the same tax year. From experience:
27th Dec
RM "we know we said you needed this much deposit for this property you are buying on 31st Jan, but actually you need an extra xx".
Me "We don't have it"
RM "just borrow it"
28th Jan (with notary visit 31st Jan)
RM "We were just doing a final review and your central credit agency file says you just took out a new loan. What is it?"
Me "Err that will be the loan you told me to take out"
RM "You were supposed to do it in the previous tax year"
Me "You told me to do this on the 27th Dec and didn't mention this. It would have been impossible in any case to get a loan that quickly"
RM "Computer says we can't complete the mortgage now"
Me "Your f u ck up. You fix it. By the way what's the name of your head of department?"
RM "You raise some valid points. I'll make it happen".
If you are missing some funds because you bought a car, you can always borrow from Migros Bank, for example. Not cheap, and I assume you are talking about say 50k (for the car), and you don't have to borrow more than 100k.
Even if you have already bought your car, you can still get financing for it at a later date and get some money back.
You will have some months to get the funds, so timing is not an issue.
With a lot of car leasing now at 0.9%, why not lease the car? Small price for some flexibility.
Yeah, that kind of range - looking at the cars now, and some are giving me the rates of 3-5% (I don't know if it's because of the demand or what), which I think it's pretty unreasonable.
One needs to certify that 20% comes from gainful employment or business activity - credit , endowment etc are not sufficient.
In situations where you really short on initial deposit - you can pledge 2nd Pillar money for that initial 20%
Should you have neither - would also tell one has not prepared for financing real estate so trustworthiness of such person is low as such interest rates may be high .
My memory might be getting fuzzy, but I believe only 10% of the 20% can come from pledging pillars. The other 10% must be cash.
If one is in such a financial situation where they need a loan just to reach the cash down payment, I find it hard to see how they can meet the bank's debt ratio and payment "stress test", which assumes a worst-case scenario of 5% interest rate on the mortgage.
Well they can’t if they do everything above board....
I spent about seven years doing fraud and insolvency investigations and it never ceased to amaze me how the amateur thinks he has a cunning plan and fancies his chances against the professionals! It usually comes undone and the very people he needs help from are in no mood to be understanding as they have just seen their bonus go up in smoke and are in line for a poor performance review....
They would not bet on the village team beating a top flight professional football team, but they’ll bet on themselves running rings around professionals targeted specifically at catching them.