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Buy A House in Italy with A Bank Loan

If you are deciding to buy a property or you are a foreigner to Italy and want to buy a house through Italian mortgage services, then before proceeding let’s first understand how this system works and what can you expect by bank loan in Italy for a house or property.

Here, we are going to highlight some useful information that you must know before enabling the process of the mortgage in Italy. 

Overview of Italian Mortgages:

  • The Italian banks generally accept the mortgage request proposal for a value between €3000 and €50000 according to the value of the loan you are requesting.
  • The time period of the mortgage last from 5 to 30 years
  • The loan can’t be granted for a sum that covers more than 95% of the property value, a minimum loan can be availed is 70-80% of the cost value.
  • In case the applicant is a senior citizen [>70 years], the bank requires a signature from another younger applicant that can be jointly liable.
  • A bank loan is granted mostly in the case of purchasing a residential property.
  • Please go through the required documents for availing the mortgages, if you don’t have any one of the following mentioned ones, make sure to apply for it as it is essential.

Many complications can occur when you start the process of obtaining a bank loan for the purchase of a property or house. Being a non-resident of Italy, the process can become lengthier than the resident. 

Understanding the Italian Mortgages for purchase of the property!

Italy provides variable and fixed-rate mortgages, but the most preferred mortgage found in Italy of over ⅔ of the mortgage markets was the variable rate due to the fixed-rates were being 1-2.5% more than the initial variable rate.

The loan application request for an Italian property is only made through Italian banks. Many banks also offer international mortgages, so you must research and get some legal guidelines to avoid any future problems. 

A bank loan in Italy by the bank currently provides non-resident mortgages with the difference in the loan and the property value [50-60%], a minimum agreement is €100,000. The lenders of Italy mostly require a minimum deposit of 40-50% for non-residents of Italy.

People who are desired to buy a house or property that can be rented out should check the regulations of the property and laws by an Italian solicitor, as buying a property through a mortgage that can be rented out in the future is not allowed in Italy. 

This means that your bank lender does not have any problems if you rent out the property, it’s just you need to check the permission or obtain a license to do so if your property is purchased through a loan.

Documents required for bank loan in Italy!

The first and foremost process is that you must obtain the application form for the purchase of property by the Italian bank. The bank will ask for further documents for verification purposes. These can be:

  • Sale Agreement of the Property
  • Identification card [ID] 
  • Passport
  • Income Certificate
  • Credit Report
  • Address Proof

Remember it’s not an eye blink process, you have to be patient as it’s a lengthy task to verify all the above-mentioned documents and check your credibility. So, you must be ready with all these necessary documents otherwise there can be a hurdle in your mortgage process. 

Cost/Fees for obtaining Italian Mortgages

The process for obtaining a loan for a house involves several charges-

  • Mortgage or Loan application charge
  • Mortgage tax [Depends upon purpose and type of loan]
  • Surveyor charges [Fees for Evaluation Report]
  • Insurance and Translation charges [optional] 

Taxations on Italian Mortgages!

The calculated figure on which most of the property’s tax fees are applied is known as the Cadastral value. 

After the evaluation of the property, the cadastral value should be calculated which is based on the size, quality, and location of the property. 

The other charges such as government and Property tax are calculated from the Cadastral Value.