Mortgages for Calabrian Property? Senza Problema...

In our last newsletter we introduced Calabria as the “low risk emerging market”, an undiscovered region within a founding EU member state - Italy. With low entry prices, from as little as 45,500 euros, capital appreciation tipped between 15 and 20% per annum for the next five years and low-cost airlines tripping over themselves to establish routes, interest in Calabria has been nothing short of remarkable. It does however claim yet another advantage, and that is an established non-resident mortgage market.

The challenge of some emerging markets such as Brazil and Cape Verde is that non-resident lending is currently not available. So buyers have to be cash rich, (which actually isn’t too challenging when prices are pegged so low and stage payment plans are in place), or be prepared to release equity from a UK property or some such other financing. No such problem for Calabria, non-resident lending is already commonplace.

Carl Gillham, Mortgage Consultant for International Mortgage Solutions (IMS), comments, “There is a range of lenders offering non-resident mortgages in Italy from Barclays to GE Capital, so it pays to ask an expert to seek out the product to suit you. The good news is that up to 80% loan to value is available as well as various other options including interest-only for the first five years of the loan, low documentation mortgages and those with no redemption penalties for early repayment. Terms can be up to 30 years and if you opt for a variable rate or flexible interest-only option, you can take advantage of any reductions in the European interest rate as Italian mortgages are indexed against Euribor, which is historically lower than interest rates in the UK. Expect repayment loans to be in the region of Euribor + 1.4% and interest-only loans from Euribor + 1.5%. If 100% financing is a necessity, or indeed a preference, purchasers in Italy can combine Italian and UK borrowing. It goes without saying that all products offered, as in the UK, are subject to the lenders’ criteria and the clients’ status.”

For the cautious investor afraid of the unknown, Calabria is certainly a strong option. GEM Estates is currently arranging subsidized inspection trips to the region. Provided you pick up the cost of the flights, GEM Estates will cover the cost of three days and two nights five star hotel accommodation, all meals, transfers and the benefit of a sales consultant, lawyer and financier at your disposal throughout the trip. Should you make a purchase, we’ll refund your flight expenditure as a ‘thank you’. Flights with www.ryanair.com are starting from as little as 1p each way (exc. taxes and charges) for September 2007. Contact GEM Estates now on info@gem-estates.com if you want to find out more about property in Calabria, want to arrange an inspection trip or want us to put you in touch with Italian mortgage experts, IMS.

Related Links: Italy Property Page

Author: GEM Estates
Date: 01/08/2007