Mortgage for first home construction: how it works and facilities

27 Mar

The mortgage for the construction of the first home can be used to complete the construction work on a property owned. Unlike traditional mortgages, which are loans for the acquisition of a house that has already been built, the completion loan (this is the name by which this loan is defined by the banks) intervenes at an earlier stage, when the construction of the house does not has still started or has not yet been completed. However, this financing maintains a common trait with the other mortgages: even in this case, the banks will push themselves to finance up to 80% of the value of the property, without going any further. The reference value will be that of the house at the end of the work.

To obtain this loan, you must prove ownership of the building

loan

Under construction and obviously present adequate guarantees on your ability to repay the installments. There are also various forms in which the bank can provide the loan: if the amount is less than 50% of the value of the property, it is possible that the credit institution lends the due in a single payment at the beginning of the work. However, the most widespread method is the home construction loan for the progress of the works .

This financing formula provides for the amount to be delivered to the applicant in periodic tranches , which follow the progress of the construction work. Each tranche is disbursed only when an expert sent by the bank certifies that the works have reached a state of progress such as to justify the payment of new liquidity. The role of the expert is very important and his services are a significant cost item for this type of loan: for this reason, when the loan installment simulation is carried out, the costs of expertise must be carefully considered.

The loan to build the first home

The loan to build the first home

Then enjoys the tax benefits that the Italian legislation recognizes to those who are acquiring the first home. In particular, in calculating the first home loan you must always bear in mind the 19% deductions on interest expense for expenses up to 4,000 euros: this means that the maximum deductible will be equal to 760 euros. Even in the case of mortgages for the construction of the first home, it is always possible to make a quick comparison between the various online mortgage solutions, using the web platforms dedicated to comparing offers.