Getting A Mortgage For A Foreign Property
Property sales in Mozambique are somewhat of a mixed bag in terms of the amount of properties being purchased and those who can afford them. A mortgage loan is secured (or backed) by the collateral of specified real estate property. If you are buying a property for commercial use, such as a restaurant or a shop for example, the maximum mortgage is 50% of the price (or valuation if lower). This document shows who owns the property, who has rights to the property and if there are any charges, mortgages or incumbrances registered against the property.
Warm and sunny translates into: GDP rising (growth); low interest rates on public and private debt; low inflation; easy access to credit for businesses and private mortgages; tax rates going down; falling unemployment; stock market share prices rising ('bull' market).
Portuguese banks have strict affordability criteria which means that, including the mortgage you are applying for, the total of all debt service payments you have to make (inculding your UK mortgage and any other personal loans you have in the UK or elsewhere) cannot be more than 35% of your net income.
8. Energy Rating Certificate: As of 1 January 2009 before buying property in Portugal you must be shown a valid energy rating certificate which grades properties Algarve Property Golf from A-G, A being the most environmentally friendly. Loan with fixed Nominal Annual Percentage Rate of 2.500%, in the first 25 years, in force in April 2020.
Hinting last week at this coming down the line, Público stressed that the nation's banks expect ‘something in return' from the government, in terms of a guarantee that they will not be penalised" when it comes to solidity. If you are serious about buying a property in Portugal then you should start arranging your Portugese mortgage almost before you do anything else.
Banks underwrite by looking at a clients Debt vs. Income ratio. Remember that where the mortgage is denominated in a currency other than your home currency, changes in the exchange rate may increase the equivalent value of the debt in terms of your home currency.
Following the trend of the Portuguese property market, bank valuations are continuously rising since several months. Also featured is expert advice on buying new build properties, how to furnish your home in Portugal as well as tips to make the most of your rental property.
After the fixed rate period expires, the mortgage will automatically convert into a variable rate mortgage (unless the rate is fixed for the entire loan period). Under Portuguese law the pre-payment penalty from all banks is fixed at 0.5% for variable rate loans and 2% for fixed rate.
When it comes to mortgage rates, Portugal bases them on the Euro Interbank Offered Rate (Euribor), plus a margin typically between 1.50% and 2.50%. Valuation report - once you have received a formal mortgage offer the bank will carry out a valuation of the property.
