Ci serviamo dei cookie per diversi fini, tra l'altro per consentire funzioni del sito web e attività di marketing mirate. Per maggiori informazioni, riveda la nostra informativa sulla privacy e sui cookie. Può gestire le impostazioni relative ai cookie, cliccando su 'Gestisci Cookie'.
What to consider when choosing a mortgage
It is also necessary to know
Focus on ....
Mortgage contracts are often difficult to understand. This is partly due to the need to use irreplaceable technical terms; however, the problEem could be overcome by an effort of simplification which would ensure a clearer relationship between banks and users. It is advisable to have in advance the text of the contract and, above all, of the "general conditions" proposed by the bank.
If there are difficulties in understanding and if the answers given by the officials are not satisfactory, you can turn to both consumer associations and the Notary, who will give the required explanations even before the conclusion of the mortgage. The lack of clarity of the contract may also be an indication of poor quality of the product; this makes it advisable to apply to another bank.
It is generally the main or exclusive element in the valuation of a mortgage. On the contrary it's important to look into other factors, listed below, before making the choice, as it is worth evaluating the overall weight that the mortgage will have on the family budget.
It is therefore necessary to find out about the difference between the entry rate, which is lower for the first six months, and the fixed rate, and to assess the difference between the fixed rate and the indexed rate, because, for example, a low entry rate can be attractive, but may hold the unwelcome surprise of very high rates at the steady state, whereas a fixed rate that is affordable today can become onerous in a short time. In addition, in the formation of the monthly instalment, to the interest rate are added other expenses that it is necessary to know in advance.
There may be unpleasant surprises in terms of financial burdens; it is therefore appropriate to examine carefully and compare the mortgage fees, the costs of expertise and investigation, the insurances - sometimes imposed - by which the bank guarantees against the risk of fire/ explosion of the property or death of the borrower. It is also good to inform yourself in advance about notarial fees which, for various reasons, may vary even with the same sum borrowed.
When you have committed to buy a home within a given time and you must pay a penalty to the seller for the delay, long processing times for the granting of the mortgage can be expensive. As a rule, 60 days is more than enough to obtain a mortgage.
Even if the borrower does not think that one day he will be in the position not to be able to pay his instalments on time, it is necessary to consider this possibility carefully to avoid that unfavourable and unforeseen circumstances produce dangerous chain effects.
Since the mortgage exists only from the moment the notary registers it in the appropriate office, and this can be done only after the conclusion of the mortgage, the bank often retains the borrowed sum until the deed has been completed, which means having to wait two or three weeks before you can have the borrowed money.
You need to get information from the bank and from the Notary about the actual availability of money. In order to avoid this waiting period, some banks make the borrowed sum immediately available as pre-financing, in which case it is appropriate to check what interest the bank charges. As an alternative to pre-financing it is necessary to agree in advance with the seller, who, if he sells before collecting the entire price, must be properly guaranteed. The notary’s task is to propose and explain to the parties the various possible solutions.
The law provides for the tax deductibility of a part of the interests and related additional charges, paid for mortgage loans signed for the purchase of real estate and/or for building renovation. This possibility of reducing the tax burden should therefore be carefully examined
The lien is the guarantee that allows the bank to forcibly recover its credit when the debtor does not pay. To the principal debt (capital) must be added the interests established for the mortgage, those for the delay, the expenses of the procedure for the auction sale of the house. For this reason the lien is registered for an amount much higher than the mortgage one. This means that until that amount the value of the house is reserved for the bank and that any other mortgage - which however not always the banks grant - can be requested only on the residual value of the property.
The mortgage is extinguished by the payment of the last instalment. The lien guaranteeing it, on the other hand, remains in life until twenty years have passed since its constitution, in practice since the mortgage was granted. Therefore, for mortgages lasting less than twenty years, there is a period of time when the lien exists, even if it no longer has any purpose. In these cases it is not advisable to ask the bank to cancel the mortgage, unless you have to sell the house. It is good to remember that the cancellation of a lien always takes some months and that its cost is not negligible (about 500 € for a lien of 160,000 €).
Some mortgage contracts provide that you cannot sell the home before you have paid off your mortgage, otherwise obliging you to pay the debt in advance and even a possible penalty. Such clauses shouldn't be underestimated, because they can create a serious obstacle when you want to move house. Not all banks require them: you may ask to remove them or change bank. In any case, the prohibition to sell the house must be contained within a reasonable time (for example five years).
When granting a mortgage, the bank must assess not only the value of the home offered as a guarantee, but also the ability of the borrower to pay the mortgage instalments. For this reason, a third party (such as a parent for the child) is sometimes required to provide a guarantee.This banking practice is correct, provided that the limits of the amount and the duration of the guarantee are determined. It is instead to reject the possible request of the bank of a power of attorney to sell the house in case the mortgage payments are not paid (most often this practice is followed by the financial companies).
Renegotiation can be considered a general achievement, but it depends on the will of the parties (bank and borrower).The renegotiation may only be related to the rate or duration, or it may involve the closure of the old mortgage and the opening of a new one with the resulting costs, which must be carefully assessed in relation to the advantage resulting from the reduction of interest.
Today the abuses sometimes experienced by consumers in the conclusion of a mortgage for the purchase of a property, such as very onerous penalties in case of early repayment, limits on the ability to sell the mortgaged property by transferring the mortgage to third parties, can be countered also thanks to the new regulation of unfair terms.
Precisely the abusive clauses have been one of the most problematic matters on which the Italian Banking Association and consumer associations signatories of this Vademecum have worked on, redefining the right balance of rights-duties between customer and bank.
The user must first of all claim that the contractual clauses proposed by the bank are always comprehensible and communicated sufficiently in advance. If some terms of the contract result in an imbalance of rights and obligations on the consumer, these can be automatically considered ineffective. Consumer associations may bring legal action against the banks that use unfair terms and conditions and ask the court to prohibit their use.
Asking for and obtaining a mortgage to purchase a home is today an operation within everyone’s reach. It is usually enough to go to a bank and produce the few documents required. Therefore, there is no justification for large percentages sometimes requested by "financial brokers".
Those who apply for a mortgage and need clarification, always have at their disposal the consumer associations and the Notary, an impartial professional, whose choice is up to the borrower and whose intervention, necessary for the establishment of the lien, is a cost that can be best used to get all the necessary advice
