In the first of a series of articles on the state of financing here in Portugal I am going to start with what I believe to be the most important question being asked at the moment -
Are the banks in Portugal still lending to non residents???
I have recently read some articles in local media outlets that a few agents are advising that there are no longer any mortgages available inPortugal. This is not true!!!
What is true is that the number of banks that still offer mortgages to non residents have been reduces by about half. Some of these banks that were previously lending have had to focus on bolstering their tier one capital ratios which has indirectly lead them to heavily reducing or stopping all together their lending to non residents. There are other factors at play as well such as the risk departments of these banks red flagging ‘second home’ buyers to be too high a risk for the banks in this current climate.
So what’s left for the second home buyer out there that resides away from Portugal?
Capital and interest repayment mortgages still remain the dominant product being offered as well as fixed rate mortgages. It’s fair to say that ‘Interest only’ mortgages remain as a distant memory which may make a come back in a few years time….
Eligibility for a mortgage is another important question, it’s all good and well having some banks that offer mortgage products but what’s the point if the criteria for an approval seems unachievable?
This is one area where a good mortgage broker will earn their keep…. Every bank has it’s own pet likes and dislikes for an application i.e some banks will not accept single applications and others do not liked self employed applications and the list goes on and on……The financial fact find that we conduct is the key to unlocking this dilemma and filtering out the lenders that just would not even entertain your application or worse yet just leave it in their ‘in tray’ for a good few months!!!
Next time I’ll be taking a closer look at the products themselves and how they work and what’s best for you in your circumstances….
If you wish to receive any specific information about mortgages in Portugal or would like to receive a proposal, please do not hesitate to contact us and we’ll be glad to try and help.