In order to be able to make your dream of your own home a reality, you will not only invest a lot of free time but financing your dream home also requires a lot of money. How do I take out a mortgage and what should I look out for exactly?
In the post entitled, “Get out of the mortgage jungle”, you read that there are not just three main types of mortgage but also different choices for paying it back: namely directly and indirectly. We have designed a 3-point plan for you so that you know what to look out for when financing your own home. Because, after all, anyone who is well prepared saves money, time and energy. Anyone who informs themselves well fulfils their aim faster. And anyone who has an overview can make a better decision.
1. What amount do you need?
Is it to be a house or a flat? With surrounding property? Five and a half rooms, distributed over two floors? Before you take the next steps, you should be clear for example on the exact amount you require from St. Galler Kantonalbank for your dream home. Define a maximum budget that you would like to invest – that makes the search for a suitable property easier.
2. Choose the type of mortgage that is right for you
Fixed mortgage? Variable mortgage? Or perhaps another type? You are spoiled for choice. Your personal life situation and financial means play a big role when it comes to choosing a mortgage. Do you value flexibility? Or would you like a consistent interest charge over a longer term? Compare the different types of mortgage at www.sgkb.ch/hypothekenvergleich and get advice. The St. Galler Kantonalbank customer advisors are happy to help you find the best solution.
3. Pay back directly or indirectly?
Decide whether you would like to pay back directly or indirectly. If you pay back directly, the mortgage debt and therefore also the annual interest charge will be reduced. In connection with pillar 3a, there is also however the opportunity to pay back indirectly. In this case, the corresponding amounts will be paid into the pillar 3a retirement savings account. That way you can also reduce your tax charges.
Once you have cleared up all these points, there is nothing else stopping you from taking out a mortgage. However, we do have one more tip: Once you take one out, you will have to do it again. The term of your mortgage will end at some point and will then have to be renewed. It is therefore best to think ahead about this and seek advice. We advise you to check your mortgage six to twelve months before expiry in order not to miss any cancellation periods.