Moving to Portugal webinar (2 of 4) - mortgages in Portugal

Part 2/4 - Moving to Portugal webinar - mortgages in Portugal
I will be posting separate excerpts of the Berkshire Hathaway HomeServices Portugal Property Live Webinar on which I was a panellist on 28th July 2022.
DETAILS FOR FULL WEBINAR
I answered questions on general financial issues, investments, pensions and tax if you are considering making Portugal your new home. Along with the other panellists, I also covered different types of visas (namely the D7 visa and Golden Visa) and looked at the Non-Habitual Residence scheme.
Joe Pyke from Berkshire Hathaway HomeServices Portugal Property addressed a range of property related questions
Steve Eakins at Lumon spoke about the benefits of using a currency specialist when exchanging currencies
André Nunes Melo from NMA - NUNES MELO ADVOGADOS | LAW FIRM covered legal aspects associated with buying property in Portugal and Claudia Schuets from Quinta Finance covered a range of mortgage/financing questions
It was a great Q&A format and I look forward to doing a further webinar with the team later in the year
The full webinar will be posted over the next week or so, but I have separated out the webinar into 4 categories focusing on different aspects of relocating to Portugal and the buying process.
This video focuses on the obtaining mortgages in Portugal.
Claudia was asked:
Why use a mortgage broker rather than going direct through a bank?
Claudia and her team work with several banks and so can match the most appropriate bank for each person’s specific needs.
Each bank has different lending approval criteria for example they may each treat dividends differently in determining assessable income etc.
A mortgage broker will also understand the different criteria and can compare conditions for each client - this saves time (especially important in a fast moving market), they have expertise in how to structure applications, and will be able to present greater options and choice than may be aavialble through one bank.
Options and types of mortgages in Portugal relative to other countries
Mortgage products in Portugal are very straightforward compared with other countries. For example, all are based on a capital repayment basis.
You have a choice of fixed, variable or mixed rates (the latter starting as a fixed rate but then switching to variable).
The interaction between Golden Visa and mortgages
The minimum Golden Visa requirement has to be met with cash. For example, if you are purchasing a €500k Golden Visa property, this has top be funded by cash, but a renovation loan could then be obtained for any excess above that amount.
Joe also mentioned that on the Portugal Property website, there is a tool to filter Golden Visa properties .
Can I raise a mortgage if I buy a property through business/company?
Yes, but banks will only lend to Portuguese registered companies.
Can I repay my mortgage early or overpay a mortgage and what are the costs?
Yes it is possible
If a variable rate, part of it or all can be repaid any time and the penalty is 0.5%.
If a fixed rate mortgage, the repayment fee would be 2%
If I buy plot of land, can I apply for a construction loan to build the property?
Yes, the land/plot generally has to funded by cash and then the construction can be financed by up to 100% of construction costs.
Will raising a mortgage delay completion of the property purchase and if so how much?
Claudia believes not, especially if you are using a mortgage broker who, through their experience and expertise, understands the process and can utilise all available shortcuts. She gave a guideline of 2-3 weeks, if they have all necessary documentation at outset.
Link to part 1 of 4 below:
• Moving to Portugal web...