Home equity line
If you have already own a mortgage and is thinking to get one for buying property in Italy, it is wise to get a home equity line. This gives you the advantage of carrying tax deductible interest. And get pretty inexpensive loan at about 3%. If you do not have that option or you do not want to use that, you can get a house loan in Italy. Getting a loan in Italy can also offset the high euro which is a good strategy if you think the euro will go down in value.
Advantage of getting a mortgage in Italy
The main advantage of getting a mortgage in Italy is that it could offset a strong European currency. If the dollar rises in value against the euro, then you will need to spend fewer dollars to buy the same amount of euro you initially borrowed. This means that your mortgage decreased and your monthly repayments will be lower in dollars. However, it is strongly recommended to consult a financial advisor before getting mortgage, especially in foreign country. I there is provision to do so in the terms of mortgage, then it would be possible to maintain repayments levels and clear the debt early with the lower interest rate. And the other way around, your house loan in Italy cost you more if the dollar will keep falling down against the euro.
It is noteworthy that most Italian lenders will advance you a minimum of 75% of the property value for a foreign currency mortgage. Irrespective of decisions dictated by the market, you may be forced to take your loan out in euro.
Basic facts about Italian mortgage
Here are basic facts about getting mortgage in Italy:
- Mortgages in Italy vary between 5 and 30 years.
- To non-Italian residents mortgages start at 50000 euro to buy property and at 70000 euro to restore. Smaller mortgages requests are not accepted.
- Italian banks do not accept mortgage requests for 100% of the property price.
- A mortgage can be granted to every person who meets the financial requirements and is between 18 and 70 years old.
- A mortgage must be extinguished by the 75 th year of the applicant. In case you are 70 or over, you can still apply for a mortgage in Italy, but the bank will require the signature of a second, younger person with an independent income to act as a guarantor.
- The type of property you wish to buy must be registered to the Catasto Urbano in order to get a mortgage for it.
- The property you wish to get a mortgage for should be certified as residential.
- Rules of getting a mortgage vary according to its type, so you should get as much information as possible.