Complex situation but need mortgage for Italian house

Rhiga

Hello, this is my first post so sorry if this is the wrong place to ask. It is quite a complex situation but I will keep it as simple as I can. And if anyone can help I will be so grateful.

I am a UK passport holder but moved to Australia 10 years ago to take up a post at a university where I still work. My wife is Italian and recently we have been travelling to Italy with increasing regularity, as have our university aged children.

Eventually we will move back to Europe and with the price of housing in the UK it is Italy that we have chosen to finally settle.

I have never had a loan before - including credit cards, mortgage, personal loan. We rent a house in Australia close to the university. I have never been in debt but only have about 8000 pounds savings which would be used as a deposit.

My earnings are about 4500 pounds gross per month paid in Australian dollars

The house we want to buy is about 50,000 Euros (c. 42,000 pounds).

Our problem is that we cannot get a bank in Italy to agree to a mortgage despite my relatively good earnings and impeccable work record. We are currently in Italy so it is difficult to sit face-to-face with a financial expert in the UK. We are both pretty clueless about finance having always spent what we earned and I was directed to this forum by a friend because she said she was helped with a query some time ago.

In summary:
1. Earnings 4500 gross per month
2. Mortgage required c. 40,000
3. No debt but no credit history
4. Work in Australia
5. UK citizen
6. Mortgage required for property in Italy

Anyone? Please???

Thanks for reading

TBeckett100

Apart from a UK passport you have no intention to be domiciled here. I can't see any UK lender wanting to lend to someone residing in Au buying in a neighbouring country. Your hope may be an Australian bank or Italian bank.

Let_Us_See

Where to start as their are so many issues to address.

Whilst there are specialist lenders in UK (Conti, for example), I believe the solution to your problems lies in Italy. However, your aims might not be achievable until you return full time to Italy and can show an earned 'local' income and initial renting may be your only option as you begin to meet lenders' T & Cs.

TBeckett100

Remember from a lenders perspective, they probably won't fancy repossessing a foreign property or chasing around the world for a debt (not saying you'd default)

Rhiga

Thank you both for your replies. It does surprise me a little given the international nature of banks coupled with their wish to make money. Looking at it logically a bank with their vast wealth and enormous global reach I would have thought all that needs to happen is:

1. A bank to contact their Australian branch to confirm my employment record and credit history
2. A bank to contact their Italian branch to deal with the value and state of the property
3. A bank to contact their UK branch to organise the funds

With a global market I would have thought this relatively easy though I am clearly wrong. I could finance the whole thing with a personal loan but at 11% it isn't something I want to do.

Rhiga

Yes, I do see that. But would that not be the same with anyone buying a property abroad - a holiday property, fro example?

humphrd

We have a property in France and were residing in the UK at the time we purchased it. We used a specialist broker to arrange the mortgage which was based, of course, on our earnings but also our ability to pay as the French rules are much more around affordability, similar to the UK now.

However I think typically any mortgage would be from the country in which the house is in - so Italy would be your best bet utilising your Australian income and outgoings. If you have a search online you should be able to find a broker specialising in the Italian market who may be able to help ?

You also would need to factor in exchange rate differences and cost of transferring money to Italy for payments, bills etc. not sure on the differentials at the moment but can make quite a difference.

Good luck !

TBeckett100

But you have no relationship with the UK?
No credit history, no borrowing, no electoral roll? It's just the same as me trying to borrow money for my house purchase from the Bank of Baghdad.

You either need to borrow from where to live or where you want to buy. Another thing to factor in is exchange rate risk.

Rhiga

It is true that my relationship with the UK is confined to my parents and wider family which is no help to me in this regard. I was hoping that the international flavour of finance would work in my favour but this looks unlikely based on these replies. It seems such a tiny amount and I expected it to be relatively straightforward but a bank in Italy said "no". I'm back to Australia next month so will pursue from there. Thanks again for all your help.

betmunch

You just asked 1 bank in Italy?

Assuming they have a similar situation in Italy as we do here you would be much better off speaking to a broker.

What if the bank next door would have done it?

Rhiga

It is not quite as straightforward in Italy as in the UK as anyone who has dealt with Italian bureaucracy would attest. And I have discussed this with a number of banks each of which directed me to the bank that represents the region in which I want to buy and that bank formally rejected our requirement.