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Italy: Mortgages in Italy

Italian lending criteria

Do I qualify for an Italian mortgage?

To qualify for a mortgage in Italy, including Sardinia, a calculation is used to establish whether you can afford to maintain the mortgage repayments. This will automatically happen when you complete the application form, and Conti won’t charge you for this service.

How much can I borrow?

• Calculation based on the valuation or purchase price, whichever is the lower

• Up to 80% of LTV available for house purchase, remortgage or home improvements

• Based on joint net pay, where joint income is applicable

• Existing liabilities, e.g. mortgage or rental payments, loans, credit card payments and maintenance are taken into account, together with the proposed Italian mortgage payments. All this must not exceed 45% of your monthly net income.

What evidence of income do I need?

If you are employed:
• Your last three month’s payslips
• Your latest P60
• Employers Reference
• Your last three month’s personal bank statements

If you are self-employed:
• Your last three year’s signed accounts
• Your last two year’s personal tax returns
• Accountant’s declaration
• Your last three month’s personal bank statements.

Example mortgage payments

If, for example, your net joint monthly income is £2,500, 45% of this equates to £1,125. If your only liability is your mortgage payment, of say £300, this would leave a balance of £825 for your Italian mortgage repayment

What types of Italian mortgages are available?

For our latest rates and to see the different types of Italian mortgages on offer, please visit our website or speak to one of our advisers.

• Loans available in Euros only up to 80% of the property’s value
• The maximum term of any mortgage is 40 years, this varies on the type of loan
• Repayment and Interest Only mortgages available
• The minimum loan you can take out is €50,000

Essential information for buying properties in Italy

Buying property abroad is not necessarily the same as buying in the UK, there is other essential information you need to be aware of both before and during your property purchase.

• It is of paramount importance to seek independent advice from a lawyer specialising in Italian law prior to signing the preliminary contract / Compromesso, or paying a deposit

• You need to ensure that you will have full title to the property on completion and that you have the appropriate documents available for the lender.

• The bank will require a copy of the signed preliminary contract or “Compromesso with the relevant application form. However, before signing the contract ensure that you are able to sign this with the clause “subject to mortgage finance and valuation” as the contract once signed is legally binding.

• You should check with the estate agent and/or your lawyer that you are aware of the costs charged by legal and Government authorities for buying an Italian property. The lender will also have their own legal costs for assigning the loan, the cost of which they will normally advise you when they issue the mortgage offer. These associated fees/taxes are typically between 10% - 15% of the properties purchase price.

• A tax code is mandatory for purchasing a property, known as a fiscal code. Your solicitor will advise you on obtaining one. Please note that the Lender will need a copy of the certificate with your application.

• All properties must be in a habitable condition, with constructed roads as access.

• Be aware that the Notaire may be incorporating costs for assigning the mortgage within his charges. Establish the actual cost before proceeding with a loan application.

• Unless you understand Italian well enough to respond to the Notary, he is obliged to call upon the services of a qualified translator, because the law states that you must understand what you are purchasing. The cost of the translation services will be paid by you. Alternatively, you may wish to grant a power of attorney to a representative of your choosing, who is fully conversant in Italian.

• An Italian Bank Account must be opened and details provided to the Lender prior to completion

© Conti Financial Services Limited 2008

This article is reproduced with the kind permission of Conti Financial Services Limited.

For information and advice on overseas mortgages and residential finance in over 30 countries, contact Conti Financial Services Ltd on www.mortgagesoverseas.com

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