“Can a non-Italian resident get an Italian mortgage?” This is frequently one of the first questions we get at Italian House Hunters from people who are interested in buying an Italian house.
The simple answer is yes. Non-Italian residents are allowed to get Italian mortgages on Italian properties. This includes purchase and refurbishment.
Following the 2007/2008 global financial crisis, Italian banks firmed up their policies for giving mortgages to non-Italians got stricter. However, you should still be able to find an Italian financial institution willing to give you a mortgage. This would usually be granted in euros but in some cases they might be willing to negotiate for a mortgage in a foreign currency. In general, Italian banks lend up to 50-60% of the value of an Italian house.
Factors that will determine your chances of success include your nationality, age, domicile, employment status, financial status, and the condition of the property you are considering buying.
After you file a request for an Italian mortgage application to buy a property in Italy, it should take around eight to ten weeks to complete the process and receive the loan amount. If this seems too long and you need to get the mortgage approval in order to proceed with the purchase, it might be possible to get a mortgage pre-approval.
Process for an Italian mortgage to buy an Italian house
- Personal solvency check: the bank will review your personal financial information and check the details of the property you are interested in.
- Pre-approval mortgage application: preparation, submission and pre-approval outcome.
- Property compliance check: the bank will appoint a surveyor (geometra) of their own choice to inspect the property. The surveyor will issue a report summarizing their evaluation, and hopefully this will comply with the bank’s requirements and nothing amiss will be uncovered.
- Title check: The notary (Notaio) that you have appointed yourself will then review the property title and issue a title check report to the bank.
- Final mortgage approval: If the green light has been given to all the above checks (solvency check, property compliance, title check) then the bank will formally approve the mortgage.
- Release of funds release: After mortgage approval, you, the Notaio and the bank will set a date for signing the contract. Depending on the bank’s policy when it comes to mortgages, the funds might be released at the signing, or upon confirmation (from the notary) of title transfer registration in the Public Land Register (Register of Deeds), which might take two to four weeks after completion.
Further considerations when applying for a mortgage for an Italian house
The bank you are requesting the mortgage from might insist that you open an account with them to set up automatic mortgage payments. This isn’t a legal requirement though. But it might smooth the whole process if you already are a customer of the mortgage bank.
Some banks are happy to be present at the Notaio for the final signing on your behalf, based on a Power of Attorney. However, other banks will not allow this option will insist that you, as the borrower, are physically present at the Notaio for the final signing. It’s worth checking this in advance to ensure that the signing proceeds smoothly and trouble-free with no surprises.
Many Italian banks only accept documents that are in Italian, so be prepared to have any necessary documentation on your personal circumstances and financial status translated into Italian.
Mortgages for foreign buyers are only available for residential property use, and to cover only the standard purchase of the property, a renovation project, or the construction of a new building. You must also be a residential property buyer; be an employee, self-employed or a retiree; and have an income in euros or one of the following currencies: GBP, USD, CAD, AUD, SGD, HDK, DKK, NOK, SEK, CHF or JPY. Other currencies can be evaluated case by case.
Maximum duration of a mortgage for an Italian house is 25 years, and you should not be over 75 at the end of the mortgage. Maximum debt-to-income ratio is generally 30-35%.
Nice to know …
Here’s a tip that not many people know about in regard to getting a mortgage in Italy. It is sometimes possible to make significant savings in terms of time and cost if the existing owner of the house you are considering purchasing already has a mortgage on that property.
If so, it’s necessary to get a legal expert to study the terms of the existing mortgage very carefully. (We can help you to find someone; just give us a call). If you are happy with those terms of the existing mortgage, you might be able to undertake (assume) that mortgage at no cost and with no fee. This might be a very interesting opportunity for some buyers.
The savings could be considerable. For example, if you assume an existing mortgage loan of 50,000 EUR, you could save approximately 5,000 EUR compared to getting the same loan through a standard mortgage application process.
It’s probably only relevant in a few cases, but if it applies to you it might pay for that new kitchen!
We hope that this has given you a useful overview of how to get a mortgage to buy an Italian house. For further information on this important topic, feel free to contact Italian House Hunters.
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