In this article we outline the current , focusing on who want to finance their .
This article includes:
· Brief of Global Dynamics affecting the Italian Mortgage Market
· Italian Mortgage Market as applies to
· Italian Mortgage Institutions’
As a result of the 2007-2008 credit crunch, Italian mortgage policies got much stricter. Obtaining a mortgage became more difficult, especially for . Then, in 2014 it got even worse for Americans when the U.S. passed the , which requires that foreign financial institutions report to the U.S. authorities any foreign assets held by their U.S. account holders.
Therefore, many Italian banks stopped dealing with until they figured out how to satisfy the new FATCA compliance rules.
Over the past two years the market has settled and we have seen .
It is important to note, however, that there are still very that are prepared to give a conventional mortgage loan to a non-Italian resident. The banks that are providing mortgages to non-Italians have been able to develop a sustainable system which . This income can then be used to support an that satisfies the compliance rules set out by the .
we observed positive results from new Italian banking polices delineating mortgages for non-Italian residents who want to . Banks and lenders still apply significant compared to the terms offered prior to the last credit crunch, such as . However, U.S. investors finally have an easier way to finance their “dream” and profit from , especially in comparison to the rates in their home country.
Mortgage terms and conditions change along with the global and local (Italian) financial climate, which means they are rather unpredictable. However, based on the with the recently observed financial dynamics, the has outlined the most common preferred by our U.S. clients.
Nevertheless, it is important to note that many of the findings in this white paper apply also to from other countries, such as .
For the purposes of this white paper, we have conducted a review of mortgage deals . We have also interviewed several experienced in providing and have heard their opinions about future expectations; in compliance with regulatory rules this report does not include any names of banks or brokers. We then focused our review on the .
Through our research we have identified some between the offers of Italian mortgages for non-Italian borrowers.
As a across institutions, we noted that mortgage loans for non-residents are offered with a repayment plan of a . This is a shorter term than what the institutions are offering to domestic borrowers, where a 30-year repayment plan is often the norm.
Also, across the board we found that mortgages for non-residents have a . The LTV is a standard industry that depicts the relationship of a amount with the of a property. It reflects the divided by either the property’s sale price or the property’s appraised . However, some Italian banks, after a year of two of on-time mortgage payments, also offer the option to do a .
With respect to the differences, we have identified three main mortgage offer options (in the U.S. or in Italy), the of the loan (U.S. dollar or Euro), the applicable , the of the loan and the involved .
For example, one Italian bank has a earning their income in U.S. dollars. More specifically, this bank, when dealing with a U.S. resident, will . This product has been developed to of default due to unfavorable .
Other banks offer U.S. borrowers the option to . Still other banks only offer loans in euros. For each U.S. borrower it is important to know these options exist and understand to his personal borrower profile and financial goals.
As to interest rates, they are linked to the European Central Bank interest rate parameters. This makes than U.S. interest rates. In particular, a U.S. resident can get an Italian mortgage to buy an Italian investment property (for example, to use it for a short-term rental business), for an , or even less, as compared to interest rates currently applied in the U.S. to buy a U.S. investment property.
As to the processing and closing formalities, usually Italian banks have a limited team of people dedicated to this kind of mortgage loan. Although they agree to , some banks will require that closing is signed in a specific location, where their “international loan team” is located: this is usually . This might create some difficulties when the property owner is not prepared to go to one of these locations to sign the sale agreement, which is always required to be signed as the mortgage contract.
Other banks have adopted the template, which enables a borrower to sign it .
There is a certain degree of and for each mortgage, depending on the specific , such as , and the specific to be financed. Therefore, a virtually of mortgage specifications, terms and conditions do exist. The key for any U.S. borrower is to know what is available from which institution based on the specifics of his borrower profile and the property itself.
This report has been prepared for internal use by the firm’s as a baseline and general overview to better assist our foreign clients who wish to invest in using the financing leverage of an . We are happy to share this top-line summary of our conclusions:
· : compared to 24 months ago
For ease of reference, we have put this information in chart format.
In conclusion, one common rule applies to all cases: before committing to a mortgage contract . We have worked on hundreds of international property transfers and we are happy to . Contact us to discuss specific situations and .
Thanks to Studio Legale Metta