20 Oct How can I get a mortgage if I don’t live in Italy?
For many people dreaming of buying property in Italy one of the first questions that comes to mind is, how to obtain a mortgage. Whether a second home, a new primary residence or a place to retire, with some expert advice, it’s possible to navigate the complex system and realize the dream of owning property in Italy.
Recently Daniel Shillito was interviewed by the Thelocal.it to discuss how non EU citizens should approach mortgages to buy property in Italy.
“The biggest mistake people make is to move to Italy, get residency and then apply for a mortgage. It seems counter-intuitive. Logically it may seem that it would be easier if you were living in Italy to get an Italian mortgage. Many people have found themselves unable to get a property loan once they’re living in Italy, in my experience. One of the reasons for this is that it can be more difficult because Italian banks don’t know whether your job in Italy is stable, which can take around two years for them to deem whether it is or not.”
Once you’ve got residency, Italian banks generally ask for 2-5 years’ proof of living in Italy before approving a mortgage, as those who have stayed longer amounts of time are generally more likely to stay. For remote workers it can be trickier, Italian banks are not fast and nimble enough to determine whether your remote work is steady, so you can’t assume anything, there’s too much risk. What this all means is that the best route when applying for a mortgage is right from your current place of residence, where you live and work currently, such as the UK or the USA or Canada, and other countries outside the EU for example.
For those living and working in these countries outside the EU, with a dream of buying in Italy and who need a mortgage, the first thing you’ll need to be prepared for is the amount of deposit you’ll need. The maximum any bank is likely to lend you is 60% of the property price if you’re not in Italy, there is also a minimum amount of mortgage they are willing to give you, starting at around €60,000 – €70,000, which works out at around a property price of about €115,000 upwards.
“People looking to buy in Italy sometimes say they’ve saved maybe £20,000 and that should be enough to get a mortgage for a cheap Italian property by the beach of say €40,000 but It’s not and it doesn’t work like that”
So once you’ve got the right amount of deposit saved up and have found a property that banks are willing to lend you money for, can you compare the market and go to any bank?
You can’t walk into any bank you like and ask for a mortgage. It’s a hidden market – banks don’t want to advertise they’ve got mortgages for the world, There are certain banks that have a certain branch where a certain person may help.
So how do you find them if they’re so concealed?
My advice is to work with a mortgage broker who knows the local market and can guide you through it. Yes, it’s an extra cost, but it’s vastly more difficult to get the response you need without one. A mortgage broker will handle all the bank’s administration, know how to deal with the fifth request for paperwork, they’ll ring up the bank when the house is supposed to go through and doesn’t – a broker gets this sorted for you. They’ll tell you when to go into the bank and what to sign. But this is not all one has to do to consummate the process.
When you buy in Italy and you’re a foreigner, you need to know so much more than, ‘Can I get a mortgage?’ You need to consider when you get a building inspection, when you need a notary, how to go through the three contracts that make up the purchase process. All this can take six to nine months, especially without preparation.
There isn’t a one-fits-all solution when purchasing property in Italy, the best course of action for anyone is to seek professional advice based on your individual circumstances.
The above is an excerpt from an interview recently by Karli Drinkwater for TheLocal.it where Daniel discussed some tips and important things to consider if you are a non-EU citizen looking for a mortgage to buy in Italy
You can see the original article here:
and for more information message us directly.