If you are not an Italian resident, getting a house in Italy is easy, because there are no particular limitations. Indeed, applying for a mortgage is easy too, because the bank will treat you as a normal resident, maybe with more checks on your personal information.
Read on for determining the better mortgage option for your situation!
Exchange rate changes
If you have a mortgage in Italy, you can pay your debit in euro or in your own currency, depending on the bank.
When you buy a house in Italy, outside your US mother country, you will have to get a mortgage either in your currency or in euros depending upon exchange rate. If the mortgage is long over a period of 15 years this will have an important impact on your economical situation and on monthly installments, for the reason it is preferable to have a mortgage in the same currency as your income.
The lender could help you by offering another option, they can propose to you that if the exchange rate fluctuates by more than 20% you could pay your rate in another currency.
The mortgage rate
We have already talked about “How to apply for a mortgage” in another piece, so let’s move to another step of our knowledge in the Italian mortgage process. The are two main types of mortgage that people choose, when they have to buy a house in Italy:
- the mortgage with variable rate: that means the interest rate can change over a period of time due to market This option is the most popular;
- the mortgage with fixed rate: that has a fixed interest rate that means the mortgage is taken out and that does not change.
In Italy, Buy-To-Let mortgages, that means the activity of buying a home in order to rent it to other people rather than live in it, are not a considerable option. The lender does not have any restrictions in terms of renting out the property, indeed there could be some local permissions or licenses required to do so.
If you are an US citizen living in the States and investing in Italian property, you may want an international mortgage, or it is any mortgage taken out against the property you chose in a country different to the one you live in.
Most of the Italian banks do not offer international mortgage service, but some global banking brands have specific international operations, and most of them have a branch in Italy, so you can have a chance to apply for an international mortgage.
Mortgage amortization schedule
The mortgage amortization schedule is a complete table in which it is shows:
- the amount of the mortgage;
- the periodical installments, if they are monthly or quarterly and so on;
- the amount of each payment is designated for interest versus the principal;
- the forecast the outstanding balance or interest;
- the expiration date of the mortgage.
The amortization schedule helps to have under control every step of the repayment process.
Buying a home is a significant financial decision, and the effort you've put into purchasing the home is just part of your home-buying story. It is important to be prepared and know every step of the purchase process.
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