Farmhouse reborn

Many dream of living in a farmhouse. Few, however, get to realize that dream. Yet we helped one of our retail customers in Basel achieve just that. Originally built in the 18th century, the farmhouse of his dreams lay in the heart of the Bernese Oberland in the Swiss Alps. The only hitch was that it needed a great deal of repair work and renovation, and the costs of making it livable would come to much more than the actual purchase price.

Still, after seeing the farmhouse, our client contacted the local UBS branch in the Bernese Oberland about a mortgage. Because he was a Basel resident, the information was passed on to the branch where his client advisor worked.

Philippe Salvisberg, a real estate finance expert in Basel, recalls: „It was then my task to work together with the client advisor to come up with a solution that exactly suited our client’s requirements.”

Our client wanted to buy the farmhouse with his own capital and take out a mortgage to finance a part of the renovation work. There was a small problem, however. It was not fully clear what the property’s value would be after the renovation plans as the final plans for the work had not yet been set. In spite of that, the client wanted to take out a fixed-rate mortgage as fast as possible as he reckoned interest rates were on the way up.

Moreover, the property was in an agricultural zone with special planning restrictions and it could not be fully pledged as a security against the mortgage, as is the case in residential areas.
„In view of the special nature of the situation, we suggested that our client offer additional security by pledging other assets. As soon as we knew how much the renovation would actually cost, we would revalue the property upwards and release the additional security,” Philippe said.
Our client was more than happy with the solution. „It allowed me to buy the house without delay and fix the mortgage on exactly the terms I had wanted. Working with UBS was fast, not at all bureaucratic, and innovative.”