Italian mortgages for non Italians

Question: Can a non Italian resident get an Italian mortgage?

Answer: Non-Italian residents are allowed to get Italian mortgages to buy Italian properties. Some Italian banks offer mortgages to non-residents who want to buy and/or refurbish an Italian property.

Italian bank policies for mortgages to non-Italians got stricter after the 2008 financial crisis. However, recently several Italian financial institutions developed new rules to give foreign income earners more options to get an Italian mortgage. As a result, a non-Italian resident who does not earn any Italian income can borrow 50-80% of the property value, depending on the lender and personal circumstances. Additionally, with a personalized approach, proper tax and property purchase contract terms options you can improve the finance leverage up to 90%.

An Italian mortgage loan to a non Italian resident might be granted in euros or in a foreign currency. Our U.S. clients often prefer to get an Italian loan in U.S. dollars to buy an Italian property.

Italian Mortgage Costs

When planning to apply for a mortgage, you should consider the ancillary costs, such as, mortgage application fee, broker fee (unless you deal directly with bank), mortgage taxes, appraisal, notary fees, legal fees, home insurance and interpreter fees, as necessary.

Mortgage approval success chances, evaluation parameters, loan amount, timing and cost depend on several factors, such as applicant’s nationality, domicile, personal conditions (e.g., employment, marriage, and financial status) and property conditions. A legal or mortgage expert might help you select the financial institution that best fits your specific case circumstances and needs.

Once you file an Italian mortgage application to buy an Italian property, it takes eight to ten weeks to complete the process and receive the loan amount. If getting the mortgage is a contingency for you to proceed with the purchase, get a mortgage pre-approval before you commit to the property investment. The Italian mortgage process involves the following steps:

1. Personal solvency check: bank review of your personal financial information and property information – a day or two;
2. Pre-approval mortgage application: preparation, submission and pre-approval outcome – three days to two weeks;
3. Property compliance check: a surveyor (appraiser) appointed by the bank inspects the property and issues a compliance and evaluation report for the bank – two to three weeks;
4. Title check: a notary appointed by the borrower reviews the property title and issues a title check report for the bank – one to two weeks;
5. Final Mortgage Approval: subject to satisfactory solvency check, property compliance check and title check by the notary, the bank issues a formal mortgage approval – one to two weeks;
6. Funds release: After mortgage approval, bank and borrower agree on a signing date. In a mortgage loan asked for a property purchase, the borrower signs the purchase contract and the mortgage contract in front of the same notary within the same notary signing session. Depending on the policy of the mortgage institution, they might release the mortgage funds at 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.

As a condition to complete the mortgage process the bank might insist that you open an Italian bank account with them to set up automatic mortgage payments. Since this is not a legal requirement, you might be able to discuss options with them, such as using an Italian bank account you already have or are planning to open with another bank, or make direct payments to the bank through your home country bank account.

Also, recently some banks ask that the borrower is physically present at final signing and make this a deal-breaker. In the past we have completed many mortgages on behalf of our clients based on a Power of Attorney. However, for some banks this will no longer be an option. Therefore, if you do not care for sitting in a notary office for two hours plus for mortgage signing, remember to ask for the applicable signing policies when selecting the preferred mortgage institution.

You can save on mortgage process time and costs if the owner already has a mortgage on the property. In particular, if you are happy with the terms of the existing mortgage you might be able to undertake (assume) it at no cost and no fee. This might be a very interesting opportunity for some buyers. By way of example, if you assume an existing loan of EUR 50,000 loan, you would save approximately EUR 5,000 compared to getting the same loan through a standard mortgage application process.

Each case is different. Contact us to assess your specific case circumstances and advise you to increase Italian mortgage approval chances, minimize costs and expedite the process.

Related posts

• Mortgage parameters for non Italian residents
• Loan Options for Italian Real Estate
• Property Purchase: Do I need an Italian Bank account?
• Joint or individual purchase: tax implications
• Purchasing jointly with my spouse or separately?
• Purchasing in a condominio building
• Property taxes
• Double taxation
• VAT on Italian property purchase
• Income Tax
• Italian property purchase taxes
• Inheriting seller’s debt
• Vendor’s solvency affecting the buyer

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