Buying a property in Portugal is worldwide for a lot of people a dream, but the problem starts if you need a mortgage to realize your future home purchase in Portugal.
Unfortunately the Portuguese banks are for the moment only financing with 200% guarantees (especially since the year 2010 / 2011).
If you don`t fulfill the following 2 points it will be certainly difficult to obtain the desired mortgage:
- You need to have at least 20 – 30% of own capital (the higher, the best)
- You need to have a guaranteed excellent monthly / yearly income (the higher, the best)
The Portuguese Bank Status
Portuguese banks won`t be able to mortgage your future home based on guarantees of properties which are outside of the country and will make their decision depending on your own financial part of the risk, your income and the value of the Portuguese property. The actual valuation made through the banks are usually much lower than the market value which makes things even more difficult, as the banks are only financing up to 70 – 75% based on their own valuation without any consideration of the real comparative market value of the property.
Our company had in the last months more and more clients who preferred to finance their Portuguese dream in their own country and through their home bank, giving as guarantee their property at home. It is certainly easier for your home bank to valuate yourself as a permanent “old” client than for a Portuguese bank which don`t know you from nowhere.
The Mortgage Broker
Another possibility could be the usage of a mortgage broker, but again without guarantees.
The advantage of using a broker is the fact that he will enter your mortgage application in several banks at the same time.
Is it useful? Yes, certainly as the broker should know perfectly the actual financial market and know which banks are more or less open to finance properties.
The actual situation might change in the future, but this is the way how it is for now…