Mortgage Finance Options For Purchasing Property In The Algarve Portugal

NOVO BANCO has agreements established with several property developers, enabling you to access special terms for loans, spread and fees. The interest rates of a Portuguese variable rate mortgages is linked to either the 3 or 6 month Euribor rate and increased by the margin (spread) that the bank applies. Construction mortgages are for property buyers who wish to build a new house from the ground up or to renovate an existing property.

If you own a plot of land in Portugal or wish to renovate your existing property, we will assist you in obtaining the best possible conditions of a construction loan. Most Portuguese lenders offer different types of mortgage repayment options on either a fixed or a variable interest rate.

Most mortgage lenders will not allow the sum of any existing debts and your new mortgage payments to exceed 35% of your monthly income after tax. However, for people planning on residing in Portugal, mortgages of 80% or even 90% of the purchase price could be available.

As a result, property prices are still low compared to other areas of Portugal. All signs point to the current scenario continuing as is. In the latest survey of banks acting on the credit market, financial institutions predicted a slight increase in household demand for credit in the current quarter.

Corporate and Commercial Finance (Anglo Portuguese) Ltd., can arrange mortgages on completed properties, properties under construction, properties being sold off plan, properties requiring stage payments during construction on selected developments, properties already owned.

In addition, the company is extremely experienced in arranging loans on Touristic property. Mortgages for acquisition purposes are offered by all the major Portuguese lenders to private individuals purchasing a property with a habitation license. To make things worse, the US taxpayers' exposure to the market is growing, not reducing; last year they bought or guaranteed three-quarters of all U.S. home loans.

The rule of thumb is, the more established the market, then the easier it is, so in emerging markets like Greece, Bulgaria, Poland, The Caribbean and Israel, you can get a mortgage - but the rates will be considerably higher (see below), the amount they will lend is less and they also have stricter borrowing terms.

With an Interest Only mortgage, at the end of the lending term, the borrower still owes the same sum as was initially borrowed and so homeowners are strongly advised to make adequate provision to ensure they will be able to repay the outstanding balance at the end of the loan term.

Acquisition Loan : this is the most common loan for buying houses in Portugal. It is used for both variable and fixed rate Algarve Property Agents (use www.google.co.uk), though the vast majority of mortgages in Portugal are variable rate. This is a great option if you are able to get a low interest rate at the time of signing the mortgage deal.

Foreign banks like Northern Rock, Royal Bank of Scotland (RBS) and Halifax in the UK, banks in Ireland, Iceland and Europe also poured their money in. At last it became clear to many that there was a risk of huge losses should US house prices start to fall and interest rates start to rise.

Even if you are able to avoid the watchful eyes of the authorities on the matter of under-declaration at the time of buying the property, it is very likely that you will be adversely affected by the difference in capital gains when you decide to sell your property.