Notes for property purchase in Portugal
In Portugal there are no self certification or non status home loans. All loans will require proof of income and that means that if you are employed you will be required to provide copies of proof of income with your last three months payslips and copies of your latest P60/Employers references togehter with your last 6 months personal bank statements.
If you are self employed you will be required to provide copies of your last three years audited accounst and copies of both your last 12 months business and last 6 months personal bank statements.
You will need to have a Portuguese bank account. You will also need to take into consideration the Portugese version of stamp duty and the calculation is in the region of approximately 8 Euros per 1,000. If you are borrowing through a remortgage the figure is more like 5.50 per 1,000 Euros borrowed. The loan will not be based on any proposed rental income from the property. It will be based on your joint net or take home pay and is calculated entirely on your ability to repay the loan. Your prospective lender will, as do lenders in the UK, put your details through a series of tests to judge whether you fit their lending criteria. They will do this by assessing you existing liabilites and if they find that with your Portuguese home loanpayments your outgoings exceed 40% of your net monthly income they will refuse you the loan.
Once you have been given a mortgage it will also be a requirement for you to take out a suitable life assurance policy which will be assigned to your lender.
Properties can be bought in either individual, joint names. You could also purchase in the name of an offshore comapany but this arrangement will require personal guarantees.
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