The mortgage file a household keeps

A mortgage application is a paper exercise before it is a financial one. The bank asks for proof of identity, proof of income, proof of the property, and a record of what the household already owes. The same documents are usually asked for twice: once when the file is opened and again before the offer is signed, because the bank's checks have a shelf life and the household's circumstances may have moved.

Anyone comparing lenders, or reading up on buying a home in Italy, will meet the same list in a slightly different order. The order matters less than the dates on the papers.

Which documents are asked for when a mortgage is applied for?

The first request is almost always the same set, whatever the lender. Identity and residence: passport or identity card, tax code, and a certificate of residence or a utility bill in the applicant's name. Household status: marriage or civil partnership certificate, and where there are children, the family record. Income: the last two or three payslips, the annual income statement, and for the self-employed, two years of tax returns plus a recent balance sheet. Employment: a contract or a letter from the employer stating the type of contract and the start date.

Then comes the property. The preliminary purchase agreement, the deposit receipt, the cadastral details, the floor plan, and the energy certificate. If the property is a new build, the builder's documents replace some of these. If it is an apartment, the building's rules and the last minutes of the condominium meeting are sometimes requested, because they show whether major works are planned.

The last group is the one households forget. Existing debts: car loans, personal loans, credit card limits, any guarantee signed for someone else. A current account statement for the last six to twelve months, showing salary credits and regular outgoings. A credit bureau report, which the lender pulls itself but which the household should check first, because an old unpaid phone bill can sit there for years.

Two practical points. First, the file is assembled once and then copied: keep a full set, in the same order, in a single folder, digital and paper. Second, the documents have expiry dates. A payslip is stale after three months, a certificate of residence after six. This is why the same papers are asked for twice, and why the second request usually arrives two to four weeks before the signing.

What changes between a fixed and a variable rate?

The rate changes the numbers, not the file. The same identity, income, and property documents are requested either way. What changes is the stress test and the way the household reads its own budget.

With a fixed rate, the instalment is known from the first day to the last. The lender still runs a stress test, but the margin it applies is smaller, because the rate cannot move. The household's file is judged on whether the current instalment fits, not on whether it would fit at a higher rate. The trade-off is a slightly higher starting rate, which is the price of certainty.

With a variable rate, the instalment moves with the reference index, usually the Euribor, plus a spread. The lender applies a larger stress test, often adding two or three percentage points to the current rate, and checks that the household could still pay at that level. The file therefore needs more headroom: a lower existing debt load, a longer remaining term, or a larger deposit. Some contracts offer a cap, a ceiling above which the rate cannot rise, and some offer a switch from variable to fixed after a set number of years. Both are written into the offer, not into the application, so they are read at the same stage as the other contract terms.

A mixed rate, fixed for the first years and variable afterwards, sits between the two and is judged like a variable one, because the second phase is the one that carries the risk.

For the household file, the practical difference is small. Keep the offer letter, the amortisation schedule, and the index used, because the first instalment letter and the annual statement will refer back to them.

What should be kept after the loan is signed?

After the notarial deed, the household keeps a small permanent file. The signed loan contract and the deed of mortgage, with the notary's reference number. The amortisation schedule, which lists every instalment, the interest and capital split, and the residual debt. The offer letter, because it states the conditions that were agreed, including any cap or switch. The valuation report, which the lender commissioned and which the household paid for. The insurance policies linked to the loan, life and property, with their renewal dates. The annual statement the lender sends, which shows interest paid and capital repaid, and which is needed if the household ever sells or remortgages.

Two documents are easy to lose and awkward to replace. The first is the proof of the final disbursement, the note that confirms the lender paid the seller or the builder. The second is the receipt for the mortgage registration tax and the notary's fees, because they are part of the property's cost basis and matter at resale.

A single folder, physical and scanned, with a one-page index on top, is enough. The index lists what is inside and the date of each item. It takes ten minutes to write and saves an afternoon at the bank counter later.

Why the same papers come back

Banks do not ask twice out of carelessness. The first check decides whether the file is worth instructing. The second check, before the offer is signed, confirms that nothing has changed: the household is still employed, the property is still for sale, the debts are still the same. Between the two, months can pass, and a payslip from March says little in September.

The household that keeps a running folder, updated as each new payslip or statement arrives, meets the second request in an hour. The household that starts from scratch meets it in a week, and sometimes loses the rate it had been offered.

The file as a household habit

A mortgage file is not a one-off task. It is the first entry in a longer record that follows the property: the annual insurance renewal, the condominium fees, the property tax, the receipts for works done. Households that keep the loan documents together with the purchase documents, rather than in separate places, find that the same folder answers questions years later, at resale, at remortgage, or at inheritance.

The rule is simple. Anything the bank asked for once, keep. Anything the notary signed, keep. Anything that states a number the household will have to prove later, keep. The rest can go.

The figures in this file rest on published material rather than on the lender's own summary. Rates, repayment schedules and the rules on early repayment are set out in the central bank pages, which any household can consult directly. The bank is not a partner or a sponsor of this record, and it holds no copy of it. It is simply the source of the facts, kept here so the file can be checked later without asking the lender to explain its own numbers again.

A mortgage file is the household's own copy of what the lender holds: the offer, the valuation, the proof of identity, income and address, and the completion statement. It stays with the deeds rather than in the general paperwork drawer, because a later sale or remortgage asks for the same documents again. When the household next moves, the file travels as a folder that moves house, kept with the records rather than packed with the furniture.