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What to do if you are refused a mortgage?

Thomas Miller
04.11.2022, 07:52
5 min
Table of Contents
hpothèque refusé quoi faire

You want to finance a property project and have applied for a loan from a bank. The answer is negative and the mortgage has been refused. Why can a mortgage be refused? What to do if the mortgage is refused? RealAdvisor gives you advice and shows you the solutions to use.

Why can a mortgage be refused? 

When faced with a mortgage refusal, you want to know the reason. Banks can give this answer depending on your profile. After studying your file, certain elements may justify this refusal. 

You are not eligible for a mortgage 

Certain conditions must be met in order to qualify for a mortgage loan. You must be over 18 and under 70 years old. If you are looking for a way to finance a property purchase, you must first meet this condition. 

In terms of your financial situation, you must earn at least CHF 2,600 net per month before deduction of tax. If your income is lower, your mortgage solvency will not be demonstrated. You may therefore be turned down by the bank. Furthermore, if you are subject to a debt collection procedure, you can expect an automatic refusal from financial institutions. 

Your nationality and residence permit are checked when you apply for a mortgage loan, and you will not be eligible if you have an L, F, N or S residence permit. A B residence permit is considered valid only if it has been issued for less than six months. 

You have exceeded the maximum amount allowed for a mortgage

Depending on your financial capacity, the bank determines the maximum amount you can borrow. If you exceed this limit, you can be sure that you will be refused a mortgage. This is because the banks have to make sure that the mortgage does not put you in a situation of over-indebtedness. 

To avoid this mistake, you can use the mortgage simulator offered by RealAdvisor. This free tool allows you to calculate your financial capacity. From the result, you will know exactly how much you can borrow. 

Your Zek code is negative

When you have taken out a loan or use a credit card, the ZEK or Central Credit Information Office creates a history. This data is passed on to your bank when you apply for a mortgage. If any of the codes are considered negative or serious, you will be refused. 

In general, the codes that can be detrimental to you include defaults, fraud or a partial or total loss for the bank. 

You have a bad score

Each bank has set up a specific weighting system. Depending on your profile, it will calculate your score. The result will directly influence the response to your mortgage application. If it is poor, you will not be able to obtain your mortgage. You will also not be able to benefit from a mortgage increase. 

Mortgage refused: what to do? 

Once you have identified the reason for the mortgage refusal, you have the opportunity to change your situation. Then you can reapply to a financial institution. Here are the things you can do.

Getting information from Zek

If you have been refused a mortgage because of a negative Zek code, you can contact Zek to obtain an extract from your history. If you find any unjustified codes, you can have them removed. Of course, you will have to prove that this is a mistake with supporting documents. Then you can apply for a new mortgage. 

Applying for a loan at another bank

A bad score does not necessarily mean that you cannot get a mortgage. Each bank has its own scoring system. If a bank does not consider your score to be sufficient, you can still meet the criteria of another financial institution. 

To give yourself the best chance, you can find out in advance what each bank's requirements are. You can then check that you meet their requirements and you will know who to apply to for a mortgage. This is important because too many applications and rejections can affect your credit score. 

Lack of creditworthiness

If you are considered insolvent, you will not be able to get any credit. It is best to get in touch with a financial adviser who will help you to improve your financial situation. It is particularly difficult to obtain a mortgage without a down payment. 

In particular, you need to find out how to apply for a second pillar to show that you have substantial funds. Your BVG can therefore be used to convince the banks to trust you with your mortgage. 

Using a real estate broker

Using a professional can be an excellent way to put together a complete and convincing package to present to the banks. A mortgage broker will provide you with valuable advice on the elements that will work in your favour. This will help you maximise your chances of obtaining the funds you need for your property project. In particular, he will remind you of the minimum proportion of equity required to convince a bank. 

In addition, he or she will be able to make several requests to several partner banks. You will therefore have a better chance of getting a positive response. If you are looking for ways to negotiate a mortgage, the help of a mortgage expert can be invaluable. 

Points to remember if you are refused a mortgage

  • Find out why you were refused a mortgage
  • Use one of the solutions to improve your situation
  • Use a real estate broker to help you build a convincing case
  • Renew your application with new banks


Can I apply for a mortgage as a Swiss borderer?

If you work in Geneva, you can apply for a mortgage in Switzerland as long as your employment contract is less than 12 months old. For other cantons, your employment contract must be less than 36 months old.

Can I apply for a mortgage if I am an annuitant?

As an annuitant, you have access to home loans. However, the maximum amount cannot exceed five times the amount of your pension.

What are the elements taken into account in the scoring of banks?

To elaborate your score, banks consider the following points:

  • Number of ZEK applications and rejections
  • Your professional stability
  • Marital status
  • Budget margin
  • Previous lawsuits

After that, each bank can add its own criteria. You must therefore put together the best file to be able to obtain your financing

Thomas Miller
Thomas Miller has been a real estate agent for over 4 years now, when he is not in the field, he is dedicated to his second passion, writing, especially in the real estate market.
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