MoneyPark Guide October 2021
When you take out a mortgage, why should you also take a close look at your pension situation? Simply because protection costs up to thirty times less than damage.
Buying a home is a long-term investment. There are changes in life that we expect, but also a lot of the unforeseen. Such events change the financial situation of owners significantly and thereby influence the mortgage.
Retirement changes the financial situation
When you retire, the mortgage borrower’s financial situation changes. Therefore, finance providers are re-evaluating. The state AHV pension, together with the occupational pension, ensures around 50 to 70 percent of previous income. If the reduced income is insufficient to continue to bear the mortgage, the financing provider will demand a reduction in the mortgage debt. In addition, the loan may not exceed 65 percent of the property value. It is therefore important for owners to think about retirement planning and financial circumstances at an early stage.
Revaluation can lead to the loss of the property
The problem of portability also often arises in the case of divorce. If one of the partners takes over the property with the mortgage alone, the other partner must be compensated and the pension fund funds withdrawn in advance must be repaid. This often means that the property cannot be held. Likewise, if an income is lost due to job loss, which does not automatically result in a reassessment of the financing provider.
Use the three pillars of old-age provision wisely
In the event of incapacity for work or the death of a partner, a reassessment takes place. This is a huge financial hurdle. An early repayment penalty of tens of thousands of francs may apply to the special repayment of the mortgage. The 2nd pillar disability and death insurance is often insufficient to maintain an equivalent financial situation. Depending on the situation, life insurance can fill the gap. Indirect amortization via pillar 3a or a life insurance can also help to continue to meet the requirements of the credit institution. In addition to the insurance coverage these products offer, they are also tax deductible.
Provision is worthwhile
It is advisable to deal with such scenarios before the worst happens. It costs up to thirty times less to protect yourself and your family than to pay for damage or loss. A step-by-step amortization with the aim of paying off the mortgage to the required lending limit of 65 percent before retirement age pays off. Just like having a personal pension and savings plan in hand from the age of 40 at the latest. A specialist can help here: They can carry out the risk analysis and choose the most suitable solutions from the multitude of offers.
MoneyPark in Winterthur
Flavian Scheidegger, MoneyPark Branch Manager Winterthur
+41 52 260 20 91
Here you will find more information.