Italy is gradually emerging from the recent economic crisis. However, getting a mortgage is still a challenge as banks have strict requirements regarding borrower income. Foreign citizens are subject to more stringent requirements regarding the assessment of the mortgaged property. Applicants are more likely to be granted a mortgage
Mortgages are granted for pending constructions, existing property and renovations. The property should be registered in the land cadastre as living premises. Italian banks do not provide mortgages for property located outside Italy.
There are fixed interest rates
It is easier to obtain a mortgage in the north of Italy, e.g. near Lake Como, where authorities are more willing to lend and do it more often than those in the south. It is more challenging to get a mortgage in rural areas, especially Sicily and Calabria.
Initial mortgage approval takes up to two weeks, then another six weeks for the bank to make its final decision. If the documents submitted do not comply with the requirements set out, the process may take up to two months. If the mortgage is approved, both the seller and the buyer must open accounts with the lending bank. The buyer then deposits the down payment onto their account.
The mortgage agreement is executed concurrently with the final sales contract, then mortgage funds together with the buyer's down payment are transferred to the seller's account.
Requirements for borrowers
Generally, Italian banks treat
Mortgage applications in Italy require the following documents:
- tax identification number (codice fiscale) issued by the questura (the local police), which has local headquarters in each province of Italy;
- for legal entities: registration documents and financial statements for business owners;
- payslips from permanent employment for the previous year (for the employed);
- bank statements confirming regular cash inflow;
- tax return proving timely tax payments;
- information on payments for previous loans
and/oralimony paid; re-saleproperty contract;
- excerpts from the land cadastre proving the property is on the housing register;
- estimation of costs (for property renovation mortgages).
Banks may also require a 'household' certificate confirming the number of family members and information about them, marriage or divorce certificates, a birth certificate and a driving license. A residence permit is not compulsory to get a mortgage in Italy.
All the documents must be translated into Italian and notarised. The formalities can be completed via a consulate of Italy.
The other costs incurred by a borrower:
- mortgage processing fee —
0.4–0.7%of mortgage amount;
- costs for closing the procedure, charged by the bank —
€100–160 (one-off payment);
- property value assessment —
€200–450 (one-off payment);
- notary fee for execution of documents —
1.0–1.5%of the mortgage amount;
- mortgage registration tax: 0.25% of the mortgage amount (for residents if the property is to be their main residence) or 2%
(for non-residents and/orin secondary market acquisitions);
- compulsory property and life insurance —
€150–600 per annum.