Hello All,
I am a U.S./Italian dual citizen. I have read through many of the posts on this forum about buying an apartment, but a lot of them seem be about people who have ridiculous amounts of money. My wife and I are moving to Italy in August, and we will presumably have jobs before we go. We have a bit of savings, I think plenty for a down payment on a small apartment, which would make our monthly payments cheaper than rent. I understand the process can be complicated, but what are the laws about how much you can borrow? How much you have to put down in order to borrow? Will banks give loans apartments that are around 50,000 to 70,000 Euros?
Thank you all for your help.
Bigari
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Like anywhere else a lender will look at your projected future income (i.e. employment) and your credit history. You presumably have none of the latter in Italy, so you'll need that much better employment and/or that much larger a down payment.
In part for those reasons, but also for others, I do not recommend buying right away. Take your time. Allow ample time to discover what you like and where you'd prefer to live. Wait for the "ideal" home to come on the market at the right price.
I haven't researched it, but there might be some cases where borrowing against retirement savings (e.g. U.S. 401k plans) might make sense for buying a home. Be very careful to check all the rules about that, though, if that's an option for you.
If what is being said in the newspapers is true, there has been a drop of about 80% in the sanctioning of mortgages by the banks in Italy. Therefore, you would need to be able to put down as much as you can and ask for the smallest mortgage possible. You would need to speak with a few banks to test the waters and to talk about your own personal situation and how you could make payments.
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I don't recall my sources exactly. I have a notion that you would need a minimum of about 20 % deposit and that your mortgage must be paid up by the age of 70.
I wouldn't recommend buying right away. You can look at prices and for sale ads in your intended city. Also look at parking, transport, shopping, noise, annual fees, heating/ac, etc.
I've seen similar apartments with fees that vary over 600 euros/year. Independent heating allows you to pay for what you use, rather than having as part of the annual fee.
I would suggest besides the big banks also asking asking around at the banca di credito cooperativo.... they normally start with Bcc and name--- and cassa di risparmio.... name. Italian banks are more stringent than the US in granting loans.
It will all depend on the area city you want to go to.
I am assuming you are asking about a mortgage at an Italian financial institution.
Without a formal job contract, it is highly unlikely that any Italian bank will give you a mortgage at the moment. If you are buying in a city, you may be better off thinking about using a foreign broker, as they will accept all the documentation in English - otherwise you will need Italian translations of everything. The legal maximum for a mortgage is 80% of the value of the property, however, in effect banks are not offering more than 60% at the moment. For a couple that would go down to about 50% realistically. There has been a drop in mortgage approvals - not the 80% as cited above but nearer 50% whcih is still a huge drop. Banks are unwilling to lend on anything other than cast iron guarantees, so job contracts, houses that are resellable, and so on.
http://www.modicasa.com - property in sicily - FIAIP. [[url]u]www.buyinginitaiy.com[/u][/url] http://www.buyinginsicily.com
It's probably just the way you've worded it, but I'm a bit worried about the 'presumably ' bit since it's not clear what jobs you hope to get or may have lined up (or what you'll get paid!
). Lots of Italian firms will not give you a longer term contract, and banks look terribly askance at those in less secure employment. My own anecdotal evidence certainly confirms the drop of 80% or more in loans authorised in the last 6 months.
Thanks for the advice and partial words of encouragement.
I know the picture is bleak in many parts of southern Europe. I found a good website with the steps lined out so I figure when the time comes, I'll just follow that and see what happens. I have already had two job interviews for positions in northern Italy, nothing is guaranteed yet, but I think at this rate, something will work out before August and I will have a contract before we move. Maybe I am over confident.
When I look online, I see hundreds of apartments for sale, within my price range, all over Italy. Is it the case that nobody is actually buying? Some of these places have been listed for quite some time. I know there is the tradition for the kids to wait for their parents to pass on the current home to them but, why would people advertise for months with no hope of selling.
Italian's don't drop prices easily. It's a waiting game at present in the property market. Italians in general are not property flippers like in other countries. Banks are not giving easy loans.
Flipping a property is impossible in Italy - if you buy you will have capital gains tax for 5 years at 20% on any profit, so it makes it wholly unworthwhile. It's tue that there is lots on the market, but its also a fair bet, that when you come to look in a specific area there won't be what you want!
http://www.modicasa.com - property in sicily - FIAIP. [[url]u]www.buyinginitaiy.com[/u][/url] http://www.buyinginsicily.com
it might be worth looking inte securing finance in your home country, if possible, with a bank that has an agreement with an italian bank. maybe you can wrangle it on your current jobs, officially, do all of your banking and paperwork in your own country and come 'buying as a holiday house' kind of international buyer ... i know in the UK this is possible and I know of someone who knows someone in australia who did the same thing.
so i'm being alwefully unofficial and terribly unclear ... but sometimes both taking on all of the knowledge here on this great forum and thinking outside the box ... might work??
all the best!
if i were you i would forget italy, and think about france?
in central france for instance, my friend has just bought a 1 bedroomed house with a garden, the house needs refurbishing (but not lots of work),its in the centre of the village.
for £19,000!!!
i have seen photos of it, and it looks fab.
i would say dont come to italy without being able to afford a property out right., and definately dont come without a job contract.
houses and flats in my village here in italy, are on the market for years sometimes, and its really only foreigners that have been buying in the last 2 years.
but you can get a reasonable house here near me, for £60,000
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