Getting a Mortgage in Portugal
Thinking of buying property in Portugal but unsure about getting a mortgage there? Don’t worry – getting the mortgage in Portugal is not rocket science. Here are a few things you need to know.
While it’s possible to get a 100% mortgage in Portugal, the most common maximum loan-to-value ratio is between 75% and 80%. Dallas FHA Loans terms can go anywhere from 10 to a maximum of 30 years. The maximum age for completely repaying loans is 75 years old.
The loan currency will be in euros. We highlight this fact because, if your income is in pounds, you should be aware that you will be incurring a currency risk. Should anything cause the euro to strengthen against the pound, it will positively affect the amount of money you will need to Mortgage lender in houston.
If this detail causes you some worry, then remember that you can also get a UK mortgage to pay for your Portuguese property. It will take a little bit more time and effort to do so, but at least you will be spending your mortgage in pounds, not euros.
To get any mortgage, you will need to show proof of income – that is, your salary plus investments or rental income you receive – and also a list of your outgoings. Outgoings include any other mortgages you are paying, your personal loans, your rent, and other maintenance commitments.
Your monthly payments will be computed based on your income and your outgoings. The general rule is that your monthly payments plus your outgoings, when put together, should not be more than 35% of your gross income.
You will also need proof of resident and identity, plus details of any property you currently own.
Types of mortgage
Portugal mortgages come in two main types: variable-rate mortgage and fixed-rate mortgage.
A fixed-rate mortgage will give you the security of fixed repayments and will protect you from rate increases for a specific time duration. A variable-rate mortgage, on the other hand, often grants the borrower a lower starting interest rate.
With an intrigue just home loan, you will only pay month to month for the conspiracy. The capital is paid just toward the finish of the home loan term. To be permitted to utilize this installment technique, you should almost certainly show verification that you will to be sure can manage the cost of this singular amount capital installment toward the finish of the term.
The other payment method is the one most people are already familiar with – the repayment mortgage, where your monthly payment includes both a fraction of the capital and the interest.
As with any big-item sale, the purchase of property comes with values other than mortgage payments. When you buy property in Portugal, expect the following additional costs: the mortgage broker’s fee, building insurance, mortgage registration tax, the bank’s completion costs, the bank’s arrangement fee, the notary fee, and the valuation fee. There may also be some cost involved in setting up the bank account from which your mortgage repayments will be made.
As you can see, getting a mortgage from Portugal is not so very different from getting a mortgage in the UK. So if you wish to buy property in Portugal, do not let the prospect of getting a mortgage deter you. If you consider the beauty of living in Portugal and its long-term value, you’ll realize the effort in getting the Portuguese mortgage is all worth it.