Mutui

Mutui are loan agreements in which a borrower receives funds from a lender and provides collateral, typically real estate, to secure repayment. They are commonly used to purchase property, finance home improvements, or refinance existing debt. Because the borrowed money is tied to the property, lenders can claim the asset if the borrower defaults.

There are secured mutui (mutuo ipotecario) and unsecured mutui (mutuo chirografario). The secured type uses a mortgage on the property as collateral; failure to repay can lead to foreclosure. The unsecured type carries higher interest rates and stricter limits and is less common for real estate financing.

Common features include the principal, interest rate, repayment schedule, and terms typically ranging from 5 to 30 years. Rates may be fixed, variable, or mixed; monthly payments combine interest and principal. The total cost is often expressed as the TAEG, or Tasso Annuo Effettivo Globale, which includes interest and most fees. Lenders assess creditworthiness, income, and collateral, and may require property appraisal.

Process usually involves application, underwriting, appraisal, approval, signing of the loan agreement, and registration of the mortgage. Consumer protections and disclosure requirements vary by jurisdiction but generally require clear information about terms, costs, and risks.

Risks and alternatives: Market rate changes can affect payments; borrowers may consider refinancing or debt consolidation. Comparing offers and understanding total cost and long-term obligations helps inform decisions.