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Mortgages In Italy

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Real estate investment in Italy is a great option if you wish for a home with good resale value. However depending on the kind of house you select you might need appropriate financing options too. Mortgages in Italy are easy to get but can fleece you easily if you aren’t careful enough.

How to get a mortgage

Most of the mortgages in Italy are primarily based on self certification as well as property mortgages. These aren’t easily available. Usually the borrowing cap is fixed at 30% of your total monthly income and you also need to beware that your projected rental earnings will not be considered while taking mortgages in Italy. You will also need to furnish suitable documents which provide proof of your income and earnings as well as your current expenses per month. If your monthly expenditure is more than 40% of your monthly income, you might find it very difficult to get mortgages in Italy. It’s because lenders will check this criteria first before lending and if they find it more than 40% they won’t be interested in funding your house.

Financing options

One of the most recommended options to finance your home is by paying the entire amount in cash. However for most people churning out such a large amount is very difficult. That’s why getting mortgages in Italy is so important. You could consider other alternatives like re-mortgaging your existing home located in the UK. Another option is to contact a lender located in the UK and arranging a mortgage on your Italian property through this agent. Re-mortgaging often works out to be one of the most feasible options as far as financing the home is concerned. It’s because you have the option of releasing equity on your UK house while also buying the second home via cash payment. Besides it also saves you the need to procure an additional mortgage. This option is most suitable for those who already own an existing home in the UK. You can expect to get funds up to 80% of the purchase value of the house and it will usually be for durations of 15 years or so.

Down payment

Most mortgages in Italy charge a down payment that is as high as 50% of the home purchase value. This can be a substantial amount especially if you aren’t very well off. Also the repayment period isn’t too long as compared to other countries. Italy home mortgages usually come with a 15 year repayment period which means that paying off the total purchase amount can be a little difficult for those having financial troubles. Also interest rates are usually of the variable type. This can also affect your monthly payment on the mortgages in Italy. Unlike a fixed rate which requires you to pay a certain amount each month, in the case of variable rate the monthly payment will fluctuate depending on the market conditions – thus making financing even more difficult. It is also a good idea to get to know the local Italian language well enough so you do not get fleeced of your money in the process.

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