FISCUS MORTGAGES - INFORMATION AND ADVICE

Mortgages & Property in Italy

Guidance notes for purchasing a property in Italy.

1) Please ensure that you will have full title to the property on completion and that the appropriate documents are available for the lender.

2) With new properties, find out the date the property will be registered in your name(s), as the lender cannot lend on this land / property until the relevant title deeds have been changed into your name(s).

3) Whilst all reasonable steps will be taken to secure the loan on your overseas property as soon as possible, delays may occur due to the Italian legal and administration system.

4) Check with the estate agent/lawyer that you are aware of the costs charged by the legal & government authorities for purchasing a Italian property, noting that the lender will have their own legal costs for assigning the loan (the cost of which they will normally advise when they issue the mortgage offer).

5) It is essential that you take the appropriate independent legal advice before signing the preliminary contract / compromesso, or paying a deposit, if purchasing a foreign property, as would be expected if you were purchasing in your own country. The bank will require a copy of this document to be forwarded with the relevant application form. However you are able to sign this contract with the clause “subject to mortgage finance” as the contract, once signed is legally binding. In addition, the lawyer will be able to check that the property is free of chargessuch as ‘Ipoteca’ (other mortgages) and court orders.

6) Please be aware that the Notaire may be incorporating within his charges, costs for assigning the mortgage and you should establish with the Notaire the actual cost before proceeding with a loan application.

7) It is advisable to arrange your mortgage finance before agreeing to purchase a property.

8) A tax code is mandatory for purchasing a property. This is known as a fiscal code. Your solicitor will advise you on obtaining one.

9) Unless you understand Italian well enough to respond to the Notary, he is obliged to call upon the services of a qualified translator, because the law states that you must understand what you are purchasing. The cost of the translation services will be paid by you. Alternatively, you may wish to grant a power of attorney to a representative of your choosing, who is fully conversant in the Italian Language.

10) All properties must be in a habitable condition, with constructed roads as access.

11) An Italian bank account is required.

12) All loans are offered in Euros only.

13) All mortgages have to have a suitable life assurance policy assigned to them.

14) Properties can be purchased either individually or in joint names.

How much can I borrow & what proof of income is required?

Please note, that there are no non-status/self-certification mortgage facilities available in Italy (although renting out your property is permitted), all loans need to be supported by a minimum requirement of proof of income, i.e. if employed - copies of your last three month's payslips & copies of your latest P60/Employer’s Reference together with copies of your last 6 month’s Personal Bank Statements will be required or alternatively if you are self-employed - copies of your last three years Audited Accounts & copies of both your last 12 month's Business and last 6 month’s Personal Bank Statements will be required on application.

Unfortunately in Italy the Italian Lenders will NOT take into consideration any proposed Rental Income from the property for mortgage purposes/repayments.

Your loan is based on your joint net “take home” pay and is calculated on an affordability basis. All your existing liabilities including any mortgage/rent payments, personal and bank loans, credit cards (if the balance is not cleared on a monthly basis) and any maintenance – ie: Divorce - payments together with your proposed Italian mortgage payments must not exceed 40% of your net monthly income.

Example:

Net joint monthly income £ 2,500 times 40% of that figure is £ 1,000 minus existing monthly mortgage payment £ 300 – No other liabilities. This leaves a balance of £700 for a proposed Italian Mortgage payment.