Economic uncertainties, rising rates and the high cost of living are putting a strain on families’ ability to spend, especially when it comes to making crucial decisions such as buying a home, be it their first or second with the help of a mortgage. With many Italians looking for spaces better suited to new work dynamics, the rush to buy larger homes in the city or second homes has become common, which has increased the need to find suitable financial solutions.
One option offered by banks is the mortgage preapproval also known as the “Mortgage Voucher,” which allows potential homebuyers to obtain mortgage financing before even identifying the home to be purchased. This allows them to have a clear idea of the actual spending capacity, based on the bank’s financial analysis. In addition, it makes it possible to simulate the mortgage disbursement, estimating the amount of the installment and the duration of the financing. However, the final terms of the mortgage will be determined only during the final stage of loan disbursement.
The mortgage pre-deliberation
The mortgage pre-deliberation or also “Mortgage Voucher” is an important step in the process of obtaining financing for the purchase of a home. It is a kind of credit pre-feasibility opinion issued by the bank, in which the possibility of granting a mortgage to the applicant is evaluated, even before the applicant has identified the property to be purchased.
What is the mortgage pre-deliberation?
In a nutshell, the mortgage pre-deliberation represents a promise by the bank to provide financing to the applicant, provided the applicant meets the requirements for obtaining the loan. Importantly, the pre-deliberation is not binding on the customer, who still has the freedom to apply to another lending institution if he or she wishes.
How does mortgage pre-deliberation work?
To obtain mortgage pre-deliberation, the applicant must provide the bank with documentation of his or her income situation and any collateral. The bank, then, will evaluate both the submitted file and the applicant’s creditworthiness by consulting the databases made available by the Central Risk Service. If the outcome of the assessment is positive, the bank will commit to granting the loan and set the maximum amount that can be financed.
It is important to note that the mortgage pre-approval has a variable maturity of generally three to six months. This means that the applicant has a limited amount of time to take advantage of the opportunity offered by the pre-deliberation before it expires.
What are the benefits of mortgage pre-deliberation?
Mortgage pre-deliberation offers numerous advantages to both the customer and the bank. Let’s look at them in detail:
Financial certainty:
With the pre-deliberation in hand, the applicant is assured of the maximum amount he or she can get as a mortgage. This information is valuable as it allows them to focus on finding properties that are within their budget.
Customer retention:
The bank, through preapproval, has the opportunity to build customer loyalty. By offering a formal commitment on the granting of the mortgage, the bank creates a bond of trust with the customer.
Time savings:
The process of obtaining a mortgage can be long and complex. With the preapproval in hand, the applicant can save valuable time at the time of purchase because they already have the maximum amount that can be financed.
Possibility of comparison:
Although the pre-deliberation is binding on the bank, the customer still has the freedom to compare the offer with other banks. This can be helpful in obtaining better terms or a better interest rate.
The mortgage preapproval is an important tool for facilitating the home-buying process. It allows potential buyers to have a clear view of the maximum amount that can be financed, thus avoiding surprises or disappointment during the property search phase.
Having a pre-deliberation from the bank can be an excellent strategy to identify the maximum amount available before starting the property search.
However, the pre-deliberation cannot be used when purchasing property through judicial auction or with the Consap guarantee for mortgages for young people under 36, as they require the precise indication of the property, which cannot be included in the pre-deliberation.
Conclusions
The mortgage pre-deliberation is a valuable tool that offers numerous advantages to both applicants and banks. It provides a clear perspective of the maximum amount that can be financed, allowing the customer to make informed decisions when searching for their dream home. Although pre-deliberation is a formal commitment on the part of the bank, the customer retains the flexibility to compare the offer with other financial institutions to obtain the most favorable terms. In conclusion, mortgage pre-deliberation provides a solid foundation for beginning the journey toward purchasing a home, providing the security and peace of mind needed to make important decisions regarding one’s financial situation
FAQ
How long does the pre-deliberation last?
The pre-deliberation lasts from 3 to 6 months, depending on the bank you choose
What is the best time to request it?
The best time is when the need/desire to buy a home arises, so even before you have identified the property, but you already have in mind the application range to stay within.
Should the types of the mortgage you are going to apply for already be indicated at the pre-determination stage?
It is important to indicate the type of mortgage chosen in pre-deliberation for the calculation of the installment/income ratio. (However, the type of mortgage indicated in the pre-deliberation will not be binding in the final choice but can be revised as the final resolution leading to the deed approaches.
Do you already have to indicate to the bank at the pre-deliberation stage the type of house you want to buy?
You need to indicate the area (e.g., city/country and surrounding areas) in which you plan to look. It is not necessary to go into the specifics of the type of house. On the other hand, it is not available for the purchase of property through participation in judicial auction.
Is there a difference between pre-deliberation for first and second homes?
Pre-deliberation involves the same inquiry process. For the second home, there are only limits regarding the percentage of intervention (maximum 80% of the price) and the amortization period, which cannot exceed 30 years.
Is it possible to apply for pre-deliberation by taking advantage of the youth loan with Consap guarantee?
No.To access the Consap guarantee, the details of an already identified property are required.