Obtain your Mortgage in Milan

Purchasing a property in Italy, particularly in Milan, can be a daunting task for individuals unfamiliar with the complexities of the Italian mortgage market. The process involves various documentation requirements, and even minor mistakes can impede the acquisition process, resulting in unnecessary delays or even the rejection of your application.

Italy Law Firm Milan boasts a team of seasoned lawyers who are prepared to assist you with every legal aspect of obtaining a mortgage in Italy. With our guidance, you can confidently navigate the intricacies of the mortgage process, ensuring a smooth path towards fulfilling your dream of residing in one of the most exquisite countries in the world.

Discover all the major opportunities to invest in the Milan’s real estate market 

The real estate market in Milan presents one of the most favorable investment opportunities in Italy. It is characterized by a robust demand not only for residential properties but also for commercial properties, particularly office spaces. Investing in this sector at the current time can be highly advantageous and profitable. While the costs per square meter remain relatively reasonable, there is a general upward trend in prices for the most desirable properties.

When purchasing a property, whether it be residential or commercial, many buyers and investors find it advantageous to consider obtaining a mortgage, as it offers a suitable compromise. With a mortgage, there is the option to make an immediate full payment or secure a loan that covers either the entire purchase value or a specific percentage, with the remaining portion paid upfront. Accessing mortgages in Italy is generally a straightforward process, although it is subject to meeting certain requirements set by banks. These requirements may involve satisfying income and repayment criteria established by the lending institutions or demonstrating that one’s personal assets are adequate to cover the borrowed amount.

Do foreign residents have the legal right to apply for a mortgage in Milan?

Under Italian law, non-Italian residents have the legal entitlement to obtain mortgages for purchasing property in Italy. Italy Law Firm Milan is dedicated to assisting our foreign clients in navigating this process successfully. With our extensive experience in the mortgage field, we have cultivated strong relationships with the top banks in the Milan region. This can prove pivotal in determining the outcome of your mortgage application, potentially turning a “no” into a “yes”. We are here to provide comprehensive support throughout every step of the mortgage application process.

I want to apply for a mortgage in Milan: what type of mortgage is better for me?

If you are considering applying for a mortgage in Milan, you can choose from various types of mortgages available in the market. Here are some common options:

  1. Fixed-rate mortgage: With a fixed-rate mortgage, the interest rate remains constant throughout the loan term. This provides stability and predictability in terms of monthly payments.
  2. Variable-rate mortgage: A variable-rate mortgage is tied to a benchmark interest rate, such as the Euribor. The interest rate can fluctuate over time, which means that your monthly payments may vary.
  3. Mixed-rate mortgage: A mixed-rate mortgage combines elements of both fixed and variable rates. Typically, the mortgage starts with a fixed interest rate for an initial period and then switches to a variable rate for the remaining loan term.
  4. Interest-only mortgage: With an interest-only mortgage, you initially only pay the interest portion of the loan for a specific period. After this period, you start repaying both the principal and interest.
  5. Adjustable-rate mortgage: An adjustable-rate mortgage (ARM) offers a fixed interest rate for an initial period, followed by regular adjustments based on market conditions.

It’s important to carefully consider your financial situation, risk tolerance, and future plans when choosing the type of mortgage that best suits your needs. Consulting with a mortgage advisor or financial institution can help you understand the specific terms and conditions associated with each mortgage option and make an informed decision.

What interest rates are available in Italy if I want to apply for a mortgage?

The types of mortgage interest rates are influenced by three key factors:

  • TAN (Nominal Annual Rate): The TAN represents the Nominal Annual Rate, which indicates the amount of interest that needs to be repaid to the bank.
  • APR (Annual Percentage Rate): The APR represents the Annual Percentage Rate, which encompasses all additional expenses associated with the mortgage. It serves as an indicator of the total cost of financing.
  • TAEG (Global Annual Effective Rate): The TAEG represents the Global Annual Effective Rate, which calculates the total cost of the mortgage for one year as a percentage of the total loan amount.

The global geopolitical situation and the rise in national inflation have significantly increased interest rates for real estate purchases, leading to unprecedented levels for variable-rate mortgages, fixed in December 2023 at 4.50%. This escalation in interest rates has resulted in reduced demand for individual properties and a significant decrease in prices. However, it is anticipated that in 2024, interest rates will return to pre-inflation levels, stabilized by the current government administration, thereby revitalizing the real estate market.

This projected decrease may attract new investments into the real estate market. By applying for an accessible mortgage at a competitive price, you can enter the realm of real estate investments in Milan.When applying for a mortgage, it is important to understand that while a fixed rate offers stability and eliminates future surprises, a variable rate has the potential to save you a significant amount of money. If you wish to delve further into the topic of interest rates, feel free to explore the dedicated section by clicking here.

Obtain mortgage in milan

Requirements to obtain your mortgage

To facilitate your mortgage application for a property in Milan, Italy Law Firm can act as your representative with numerous financial institutions in the local area. These banks have established long-standing partnerships with our team of attorneys, and our involvement can play a crucial role in determining the approval of your mortgage.

However, it’s important to note that the buyer must meet certain criteria set by the banks. These criteria are designed to ensure that the financial institution is confident in your ability to fully repay the contracted debt, thereby reducing the risk of mortgage default. Banks typically require evidence that your current expenses, including existing debts, do not exceed 40% of your monthly income. Additionally, your monthly mortgage installments cannot exceed 30% of your monthly income.

Mortgages in Milan generally have durations ranging from 5 to 30 years. The average duration typically falls between 15 and 20 years. It’s important to be aware of the initial expenses that the investor/buyer must bear, including:

  • Loan application fees
  • Appraiser fees (when applying for a mortgage, the bank appoints an appraiser to prepare an assessment report that determines the value of the property, which is used to grant the mortgage)
  • Mortgage taxes
  • Insurance and translation expenses, if required

The likelihood of obtaining a mortgage for property purchase in Italy is influenced by various factors, such as:

  • The loan amount requested; banks generally grant no more than 60/70% of the purchase price based on the appraisal report prepared by the appointed appraiser
  • Nationality of the applicant
  • Financial situation of the applicant

The time required to receive a response can vary from case to case, usually taking several weeks. Once the application is approved, in cases where the mortgage is requested for the purchase of a specific property, the mortgage contract is signed in the presence of a notary at the same time as the final deed for the transfer of the property. A representative from the bank will participate in the meeting and provide the seller with a check for the mortgage amount granted.

What documents do I need to get a Mortgage?

To obtain a mortgage, the required documents may vary depending on whether the application is submitted by an individual or a company.

For individual applicants, the typical requirements include:

  • Valid and up-to-date identification documents.
  • Certificate of residence.
  • Latest income tax statement to demonstrate the source of income.
  • Good conduct certificate.

In the case of foreign applicants who hold a bank account in another country, the Italian bank may request a letter of reference. Additionally, banks may require detailed income proof, particularly for employed individuals. Self-employed individuals may be asked to provide a Chamber of Commerce certificate and/or proof of membership in specific professional associations.

When the applicant is a company, the required documents typically include:

  • Business certificate.
  • VAT registration information.
  • Personal identification documents of shareholders owning more than 25% of the company’s shares.
  • Latest officially filed revenue statement.

It’s important to note that these requirements may vary depending on the specific bank and loan program. It’s advisable to consult with the chosen financial institution or seek assistance from professionals experienced in mortgage applications to ensure that all necessary documents are provided accurately and in a timely manner.

Our brokerage and legal services for your mortgage in Milan

When buying a property in Milan and navigating the Italian bureaucratic system, the process can be challenging without the assistance of an expert. Italy Law Firm Milan provides excellent legal support services for individuals seeking assistance with real estate transactions and mortgage requests.

By choosing ILF Milan and taking advantage of our decade-long experience, you can benefit from numerous advantages, including a comprehensive understanding of the Italian banking system. This enables us to guide you through the legal process, prepare the necessary documentation on your behalf, and provide in-depth knowledge of the relevant laws and regulations governing mortgage financing in Italy. Furthermore, we offer assistance in negotiating mortgage terms, seeking advantageous solutions, and always prioritizing your interests. Our brokers are available to review all legal documentation, providing highly competitive advice on potential risks or issues that may arise.

By relying on Italy Law Firm Milan, you can expect to receive comprehensive and timely documentation, presented in impeccable English, which streamlines the entire process and enhances efficiency. In short, entrusting your real estate transactions to our experienced team of lawyers ensures peace of mind, knowing that all procedures are conducted correctly and your interests are protected.

Indeed, without proper support from an experienced legal assistant in the mortgage and real estate sector, it is common to incur financial losses from the moment you sign a purchase offer. Unlike in the United Kingdom and the United States, having someone who understands the local laws applicable to the specific property and the potential penalties that may affect the new owner if not handled in accordance with the law is crucial.

Mortgage request

If you are looking to buy a house and you need a mortgage, do not esitate to apply for our legal assistance.

Apply now for a mortgage

If you wish to delve further into obtaining a mortgage in Italy and gather more information, we invite you to read our dedicated page on the subject.