# mortgage re-finance in Italy



## truebleu (Feb 26, 2016)

I have been trying to get my mortgage re-financed in Italy and am finding it difficult to find a bank that will do it for me. I used to be a resident but moved to the States 4 years ago because of work. Selling the house has been impossible because of the economy and I'm still paying 6.07% interest on a fixed loan. Has anyone had any luck re-financing and not being a resident earning in Italy? Any info will help. I have tried most in my area including Barclays.


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## Italia-Mx (Jan 14, 2009)

I don't know how long you lived in Italy but I would think you know that if you're not an Italian citizen, it's next to impossible to get anything done in Italy if you also don't maintain legal residency. I would say that if you're not willing to return to Italy and become resident again in your commune, you can forget about trying to find a bank that will refinance your loan.


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## BBCWatcher (Dec 28, 2012)

truebleu said:


> Selling the house has been impossible because of the economy....


Well, you could probably sell it for one euro.

I think what you meant is that you are unwilling to sell at the current market value for your property.

You have a couple pieces of good news, though. One is that you probably can take the mortgage interest deduction on your U.S. tax return if you itemize. (There are a few rules to follow, but it's often possible on second homes overseas.) The other is that the U.S. dollar is fairly strong right now, so your mortgage servicing costs translated into U.S. dollars are that much lower. Given that, you could effectively reduce the total interest you're paying on that property by increasing your payments at least to some degree, to pay down the principle that much quicker.

If you have a low cost line of credit you can tap in the United States -- a home equity line of credit or second mortgage, for example -- then you could get a loan in the U.S. and pay off some or all of your Italian mortgage. This might be a good time to do that with a fairly strong U.S. dollar. Take a look at the mortgage interest deduction rules on doing that since there are some limits.

Watch out for a reversal of the "prima casa" tax break in Italy if you do manage to sell. Sometimes the government claws that back if you purchased the property that way.


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## accbgb (Sep 23, 2009)

BBCWatcher said:


> [snip]
> If you have a low cost line of credit you can tap in the United States -- a home equity line of credit or second mortgage, for example -- then you could get a loan in the U.S. and pay off some or all of your Italian mortgage. This might be a good time to do that with a fairly strong U.S. dollar. Take a look at the mortgage interest deduction rules on doing that since there are some limits.
> [snip]


This is a truly excellent idea!


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## The-cat (Feb 27, 2016)

*italian surroga*



truebleu said:


> I have been trying to get my mortgage re-financed in Italy and am finding it difficult to find a bank that will do it for me. I used to be a resident but moved to the States 4 years ago because of work. Selling the house has been impossible because of the economy and I'm still paying 6.07% interest on a fixed loan. Has anyone had any luck re-financing and not being a resident earning in Italy? Any info will help. I have tried most in my area including Barclays.


so , i read a message about this into the italy mag forum , ha an american citizenz that say of to receive it - Rudolph


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## truebleu (Feb 26, 2016)

Italia-Mx said:


> I don't know how long you lived in Italy but I would think you know that if you're not an Italian citizen, it's next to impossible to get anything done in Italy if you also don't maintain legal residency. I would say that if you're not willing to return to Italy and become resident again in your commune, you can forget about trying to find a bank that will refinance your loan.



Yes that seems to be the general impression however one came back and said they would consider it but only if I took out a loan over 80k. Another said they would look at my foreign earnings and get back to me. We shall see though I'm not holding my breath.


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## truebleu (Feb 26, 2016)

Thanks for the advice. Unfortuantely I reduced the price for the house by quite a lot but still no takers. I am trying holiday lets but there is such a glut of them in my area.

I don't own a place so can't borrow on it which is a shame. 

I have had a couple of possibles with banks there but most want you to be resident and earning there which is difficult in the area I live in as it's so depressed.


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## BBCWatcher (Dec 28, 2012)

OK, so the best you might be able to do if you're unwilling to sell in current market conditions is to:

1. Take the mortgage interest deduction on your U.S. tax return (if eligible);

2. Using your strong U.S. dollars, pay down the mortgage more quickly than originally scheduled (assuming there's no prepayment penalty). Try doing something called "dollar cost averaging." For example, if your regular monthly mortgage payment is 1000 euro, currently (as I write this) that's equivalent to about US$1093. Let's suppose you can afford $1500/month. Then every month you would pay $1500 on the mortgage (currently about 1372 euro). If the euro gets weaker then you'll automatically buy more of them at your steady $1500/month. If the euro gets stronger you'll automatically buy fewer of them. (The euro would have to get much, much stronger to fall below your 1000 euro mortgage payment. If that happens, you'll have to adjust your payment.) I'm assuming in this example that you have an efficient, low cost way of converting dollars to euro for your mortgage payments. If not, try to fix that.

It's hard to find a guaranteed yield of 6+ percent on any other savings vehicle, which is effectively what you've got right now by paying down that mortgage more quickly.


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## The-cat (Feb 27, 2016)

truebleu said:


> I have been trying to get my mortgage re-financed in Italy and am finding it difficult to find a bank that will do it for me. I used to be a resident but moved to the States 4 years ago because of work. Selling the house has been impossible because of the economy and I'm still paying 6.07% interest on a fixed loan. Has anyone had any luck re-financing and not being a resident earning in Italy? Any info will help. I have tried most in my area including Barclays.



treuble , can you please write , where are located yr's property ? 
(region and nearest city )


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## truebleu (Feb 26, 2016)

It's in Fosciandora, Tuscany


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## truebleu (Feb 26, 2016)

Thanks again. I asked my tax specialist and she said I could not get tax relief from my mortage payments. I think we had this issue last year so her info might be out of date. I looked online and there wasn't much out there.

I can afford to pay a bit more. But how do I get the bank to accept different payments every month if my standing orders are the same?


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## The-cat (Feb 27, 2016)

truebleu said:


> It's in Fosciandora, Tuscany


bank that issue a mortgage that you need to refinance ?


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## The-cat (Feb 27, 2016)

The-cat said:


> bank that issue a mortgage that you need to refinance ?


write to ilgattoconglistivali - et - yandex - point - com


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## Bevdeforges (Nov 16, 2007)

truebleu said:


> Thanks again. I asked my tax specialist and she said I could not get tax relief from my mortage payments. I think we had this issue last year so her info might be out of date. I looked online and there wasn't much out there.
> 
> I can afford to pay a bit more. But how do I get the bank to accept different payments every month if my standing orders are the same?


Be careful and check to see what the "early repayment" option is on your current mortgage. Sometimes there is a sort of "penalty" for paying it off early (in the US this used to be called the "rule of 78" or something like that). 

You may have to look into getting alternate financing where you are currently (US, I guess) that would allow you to pay off the Italian mortgage - but first see what your pre-payment penalty might be.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

Yes, I mentioned the possibility of a pre-payment penalty and to check that with your Italian lender or in your mortgage documents.

If you have a standing order, that's fine, but there's nothing preventing you from making additional payments via online banking from your Italian account, for example. Which reminds me that you'll likely need to file FinCEN Form 114 and/or IRS Form 8938 on the U.S. side to report foreign financial accounts, so don't forget those annual forms, as applicable.

Check IRS Publication 936 for the rules on the Mortgage Interest Deduction. The fact the home is outside the United States is not, by itself anyway, a problem.


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## The-cat (Feb 27, 2016)

from the 2007 year - according italia law 40-2007 - named Legge Bersani - the pay off penality do not exist more > see at italian Notary web site

i am sorry this site do not allow me , to post exactly link .

this is a very best service to you


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## PennyMc (Feb 16, 2016)

*for rent*

I am looking at moving to that area for a year, is your proerty for rent?
Thanks
Penny from Texas


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