In Portugal the purchase of a property is a regulated
process. Once a price has been agreed with the vendor both parties will sign a preliminary contract, most usually a Contrato de Promessa de Compra e Venda and make a deposit of 10%-30% of the purchase price (except
in the case of new constructions where this deposit will be considerably less). The deposit is forfeited if the buyer does not proceed and if the vendor withdraws double the deposit is paid to the buyer by the
vendor. The balance of the purchase price and all fees will be payable on completion to the notary advogado and both vendor & purchaser will sign the escritura de compra e venda, the definitive contract
equivalent to the Deeds of the property.
To ensure that the property you wish to buy is free of debts and restrictive clauses it is essential to employ an English-speaking lawyer to protect your own interest
Portuguese Mortgages and how they work All mortgages are full status and proof of income and expenses will be required. Portuguese mortgages can be arranged for acquisition, renovation & construction
and the mortgage is secured on the property in Portugal.
A deposit of 25% of the purchase price is required and you will also be liable for solicitor's fees. Either Euro or Sterling mortgages are available.
They are Repayment loans and can be taken over a 5-15 year term. All mortgages should be fully repaid by the age of 65 and life insurance is required.
Portuguese lenders assess eligibility for a loan on the
applicant's ability to service the loan and not potential rental income from the property. The general guideline is as follows: of an applicant's net income 35% should cover existing expenses and the monthly
repayment on the Portuguese loan. If you are self-employed income is assessed as the average of the last three years' net income. Rental & investment income will also be considered. If employed a lender will
base your income on your paystubs and the amount that is credited to your account monthly. Expenses considered are liabilities such as mortgage/rent in the US, personal loans & maintenance commitment.
For
example - If you have a net monthly income of $2000 with a US mortgage of $500 and no other expenses. Taking into account 35% of the income, that is $700, a borrowing with a monthly repayment of $200 could be
considered.
How much can I borrow ? Complete our loan application and we
will send you a personalized quote confirming the maximum amounts for which you can be considered over the terms available. The information we provide is based on current rates and lending practices of the major
lenders in Portugal.
Can I buy in the name of a company ? It is quite common practice to buy property through an Offshore company. Although there are initial costs with annual fees it has been considered
easier to sell a property owned in this way. Recent changes in Portuguese law have made offshore companies less attractive and advice should be taken as to whether tax advantages such as property transfer, capital
gains or inheritance apply.
How long does the process take ? Once Global Financing Online.com has received a completed application form with all the requested supporting documents a decision will usually
take approximately 2 weeks. Once the valuation has been carried out a loan offer is issued. To ensure all formalities run smoothly for completion a minimum of a four-week period should be allowed.
Disclaimer:By using the contents of this site you accept our user agreement. All contents are intended as study material and a general
guidance. It does not substitute professional legal advise. We advise readers to contact the authorities before making any legal or tax involving decisions.
