In reply to A newbie all over again! by Annec
Linda, Lucca
Submitted by Anonymous (not verified) on Fri, 08/19/2005 - 08:59In reply to A newbie all over again! by Annec
I notice you are looking for a mortgage in Italy.
Try this website, I do not have any experience of them, but good luck
[url]www.lifeinitaly.it[/url]
In reply to A newbie all over again! by Annec
We looked in to an Italian mortgage for the same reasons. Our experience was:
1. There are a number of UK brokers who will find offers for you and charge in the region of £600-800. Alternatively you can try to source one yourself which is not actually too difficult. Depending on where you are buying, Banca Toscana launched a new service in conjunction with the Chamber of Commerce specifically for British buyers (many of the Italian banks are regional so if you wanted to choose one with a local branch you would need to bear this in mind). There is, of course, Banca Woolwich and the Abbey who will be able to help and have websites to explain the whole process (which is significantly different from the UK).
2. It is almost impossible to get anything other than a repayment mortgage (although the Banca Woolwich do one which is interest only but the capital is repaid in 3-4 instalments over the period of the mortgage rather than all at the end). Most do either purchase or renovation mortgages. The maximum you are likely to be able to borrow is 70% of the property value (50% of final value if a renovation mortgage) and what they will lend you is not based directly on your gross income but on a proportion of your disposable income (see websites mentioned above for explanation). Renovation mortgages are normally released in tranches to fit in with the stages of the renovation.
3. Interest rates are lower and if you are renting in euros you would avoid currency exchanges but this assumes you would generate sufficient rental income to cover mortgage payments - don't forget your rental income is liable to tax either in the UK or Italy. The best rate you'll get in Italy at the moment is around 3.4%
4. The fees and taxes on an Italian mortgage are phenomenal compared to the UK. Get a quote from one of the banks mentioned above and you'll see what I mean! Expect to pay around 2.5% of the value of the mortgage in fees and taxes if it's not your prima casa.
Given the recent fall in the UK interest rates (with possibly more to come) and the unlikely imminent reduction in euro interest rates we actually decided to go for a UK remortgage rather than an Italian mortgage as at least in the first couple of years it works out cheaper when fees etc. are taken into account. It also removes exchange rate uncertainty where you are not looking to cover the whole of your repayments with rental income (and you can always get rentals paid in sterling if you want).
Of course everyones circumstances are different and as with everything Italian our experience may not be typical!
Euro mortgage
Submitted by Anonymous (not verified) on Sun, 09/04/2005 - 10:46In reply to A newbie all over again! by Annec
Hello
I see you're looking for advice about whether or not to get a mortgage in Italy.
There are many pros and cons, and I see most of them have been outlined to you already.
The most overriding fact that will affect your decision is of course cost. Well I can verify that if you want a mortage for a house that is not your Prima Casa (1st house in Italy) then the fees will be very high from any bank, and if it is your Prima Casa then the fees are still at least as much as you might expect to pay in UK, probably more.
The other side of the coin is that you will probably benefit in the long run from the lower interest rate in the eurozone and from the fact that your rental income and mortgage expense will all be in the same currency without being subject to the whim of exchange rates.
I encourage you to google search for mortgages in Italy and see what you think.
The process of getting a mortgage is rather complicated (I can tell you through personal experience!!) and is a very different system and mindset to the procedure for applying in the UK.
I ended up going through a service that used to be a subsidiary of Abbey, but was bought out a few years ago by UniCredit Banca, a large national bank in Italy. Most banks in Italy are regional and tend to operate in their own little world where they have different systems and ways of doing business, this stems from the very different way in which banking evolved in Italy, and from the fact that earlier last century all the banks were virtually bankrupt after warfare and were taken over by the state, but that's another story!!
The advantage of going with a national bank is that you can move around the country with relative ease, and if you also bank with them, access your account anywhere in Italy without fees. But that should not be the reason to go with them, it must be the best deal for your circumstances.
There are very few lenders that will consider you if you are not resident in Italy and have been for at least three years, UniCredit is one and Banca Woolwich (a subsidiary of Barclays) is another.
I chose UniCredit because they had a product that was suitable for me and because of the old Abbey link, most of their foreign customers were British and they are well used to the supporting papers from UK banks etc., that you will need to provide. Also, they speak English!! Applying for a mortgage is a tricky affair in Italy even for Italians, so to try to do it in a language in which you may not be fluent would be very difficult!!
UniCredit offer several different mortgages including interest only, by all means give them a try ([url]www.bancaperlacasa.it[/url]) but do a google search as well to explore all your options.
There are many mortage deals up to 80% as well.
Good luck!!
Richard
Use the search facility to see the responses you are likely to get from Banks in Italy, I think you would have far less trouble using English lenders...