The timing of financing

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When and if to apply for a mortgage is always an important factor in the buying process, this is even more the case when buying overseas. With interest rates as low as 2.3% currently available with some lenders, more and more people are exploring this opportunity as another positive reason to buy in Portugal. Receiving a mortgage approval can be a vital tool for a client to have before they enter into negotiations with a vendor as it provides the following advantages:

Exchange rate mitigation

With many of the investment houses in the UK predicting that sterling will continue to appreciate against the Euro in this coming year, it allows you the option of choosing when you exchange your sterling into Euros. Early redemption charges are capped by law at 0.5% in Portugal.

Security

You will have the security of knowing that you are in a position to complete on your monetary obligations towards the vendor.

Planning

You will be in a position to accurately budget for the total financial cost of any purchase that you undertake. Many clients have been either presumptuous or misinformed about the level of borrowing that they can undertake in Portugal.

Negotiations

It is often the case that a vendor may be prepared to negotiate a better deal with you if he is confident that the purchaser has the finances to complete the transaction in a relatively short space of time.

Banking

In order to get a mortgage approval, you will normally at the same time be opening up a bank account in Portugal, this is an essential facility to have in place for a variety of reasons such as overseas transfers and setting up direct debits.

It is important to note that the process of getting mortgage approval will not cost you a single penny and the actual mortgage approval is valid for up to six months (depending on the lender) from the date of approval. It is only once a client decides to draw down upon the facility and an offer letter is generated that the bank charges will be activated.

 

Quinta Finance, February 2011

+351 289 369 058