The first home renovation mortgage is a type of financing specifically designed to renovate a home, or more specifically to carry out energy efficiency improvements on the structure.
This type of financing allows you to cover different types of interventions:
- Ordinary maintenance interventions, namely small works such as interior renovation, roof repairs, installation of new fixtures, painting, decorating and waterproofing.
- Extraordinary maintenance interventions, namely all those types of works that lead to modifying the structure of the dwelling, structural interventions for improvement or preventive purposes, such as the renovation of stairs and partitions, or the modification of fixtures.
- Major building renovation works, that is, maintenance interventions that require a project designed by a qualified technician such as an architect, engineer or surveyor.
How to Apply for a First Home Renovation Mortgage
Renovation mortgages can be requested to cover the expenses of renovating an owned property, or also in addition to the mortgage for purchasing a home, in case the property to be purchased also needs renovation. In these cases, we speak of a first home plus renovation mortgage. This will allow those who take out the mortgage to cover the price for purchasing the property, while also having a sum available to use immediately to start the renovation construction site.
Usually the amount that can be financed through a renovation mortgage reaches coverage of about 80% of the property value, to be disbursed in one or more installments, based on work progress.
The duration of a mortgage for home renovation ranges from 5 to 30 years and, like traditional mortgages for purchasing a first home, can have different rates: fixed, variable or mixed rate.
The mortgage contract must be stipulated by the owner of the real estate unit. This real estate unit must represent the stable residence of the owner. The mortgage must be stipulated six months before or eighteen months after the start of renovation works.
Documents to Submit to Apply for a Renovation Mortgage
To apply for a mortgage, it is necessary to present your personal documents and income documents to the reference bank.
Among the personal documents we can list:
- A copy of valid identity document and tax code
- Family status certificate
- Residence certificate
- Residence permit in case you are a citizen of a country outside the European Community
The income documents to be submitted vary depending on whether you work as an employee or as a self-employed worker.
Employees:
- The employer’s declaration on seniority and service and the method of employment. Public administration employees must submit the service certificate.
- A copy of the last two pay slips, or alternatively the pension slip
- The latest bank account statement
- The income resulting from the latest 730, CUD or single model
The bank will also conduct investigations on the income of all members of the mortgage applicant’s family unit.
Self-employed workers and freelancers must instead submit:
- The certificate of registration with the professional association or chamber of commerce
- The last two tax returns and F24 model
- The partial balance sheet following the last tax return
These are the basic documents to start from for applying for a mortgage, but to apply for a renovation mortgage for the first home, additional documentation must be submitted. The additional documents required vary precisely based on the type of intervention to be carried out:
- for ordinary maintenance works it will be necessary to present the cost estimate prepared by the company or professional who will carry out the renovation works;
- for major works that involve significant changes to the building structure, the cost estimate, building permit and payment receipt for any construction contribution paid to the Municipality where the property to be renovated is located are required.
Why Apply for a First Home Renovation Mortgage
First home renovation mortgages offer several advantages. One of the most important is certainly the fact that the value of the reference dwelling is not the one set at the time of mortgage subscription. The value of the house will increase upon completion of the works. Furthermore, applying for this type of mortgage does not exclude the possibility of accessing tax deductions. The deductions will be calculated on the interest relating to the part of the mortgage actually used, which is why it is very important to document all expenses incurred in detail.
Are you thinking of taking out a mortgage to buy a house to renovate? Are you unsure about the investment? If you are buying a house and looking for expert advice, the
