Raising Finance in Italy

Loan to Values

Standard loan to values are up to 80% for non-resident mortgages in Italy and are linked to the valuation of the property not the purchase price.

Most Italian mortgages whilst linked to a percentage of valuation cannot exceed the price declared on the Title deeds.

Italian Mortgage Product Ranges

Finance in Italy is predominately linked to a variable rate and on a repayment basis. Italian variable rate products are generally linked to the variable Euribor (European Inter Bank Offered Rate) and your interest rate can be reviewed monthly, quarterly, half yearly or annually. This can differ from product to product.

IMS has access through banks in Italy to mortgages offering both Interest only periods and standard repayment mortgages.

Term

The standard mortgage term in Italy is between 5 and 30 years. This is dependant on age and the finance provider selected. The maximum age at the end of the term is age 80.

Costs

All banks in Italy charge an arrangement fee for dealing with your mortgage, this is often payable with the first month's mortgage payment. The majority of costs, including purchase tax, stamp duty, notary fees are payable prior to completion and are deducted from your gross mortgage advance. It is not possible to add your costs to the Italian mortgage unless your valuation level allows you to. It is important to check you have accurately assessed and accounted for all expenses to ensure you are not left short of funds for completion day. For a non resident the costs can range form between 9% to 15% although for luxury properties, this can rise to as much as 20%. It is important that you get a good understanding of the costs involved before going ahead with any purchase.

Currency

If you take a Italian mortgage with a Italian bank the capital provided and repayments will be in euros.

Underwriting Criteria

Mortgages in Italy are only granted on a full status basis. It is unwise to allow yourself to be talked into submitting false documentation and you should avoid brokers who offer this service. A fraudulent application could put your Italian property and your deposits at risk if found to be so at a later date. Most Italian banks will assess your income net of tax and will want to see that the combined existing UK and new Italian monthly liabilities do not exceed 35% of your proven monthly net income.

Benefits of Raising Finance in Italy

Competitive interest rates, and protection of your assets in the UK are some of the key benefits of borrowing in Italy, all alternatives should however be understood and considered before making a final decision.

Standard Non Resident Document Requirements for Italian Mortgages

For loans below 70% we require:

Last 3 months payslips or Accountants certificate for Self Employed

Copy of Passport

Application form

Signed certification for rental income in applicable

For loans above 70% or > �400,000

As above plus the following:

P60 or last 2 years certified accounts for Self Emplyed

Copies of tenancy agreements for any Buy to Let properties

Some banks in Italy providing Italian finance may require you to supply your credit file from the UK or may check your credit file direct. Any loans subsequently granted will not be registered on your credit file in the UK.s