Applying

Applying for a Mortgage

Before you even start to look at buying a property in Portugal, it makes sense to undertake a thorough financial check up of your own financial situation. You will need to know where you currently stand and where you would like to be financially speaking. You will also need to consider what type of property you would like to buy, its primary purpose (for example, a second home or an income generaing buy to let property), and how much you are prepared to invest.

Applying for a Mortgage in Portugal

All mortgage lenders can estimate to the amount they would be prepared to offer through a simulation (or simulação) based on a rough idea of your financial circumstances. This simulation is NOT a pre-approval mortgage certificate and a quote is NOT an offer of mortgage. At this stage, the bank can still change its mind and subsequently leave you with no mortgage offer which you can accept. The simulation is for your information only to give you an idea about interest rates, fees, and insurances. Therefore, you would take a big risk if you were to put down a deposit on a property with only the simulation in place without having received a formal mortgage offer.. If you are seriously interested in purchasing a property in Portugal, you should begin to get all your documentation (see below) in order as soon as possible as obtaining the mortgage finance may well be a long process.

If you feel that you are ready to obtain a firm offer from a Portuguese lender, then you are going to have to prepare and submit all your documentation to the bank beforehand to enable the bank to give your application proper consideration. Lenders will not grant a firm mortgage offer without fully analysing your financial circumstances through the various required paperwork and fully evaluating the property including undertaking a full property valuation carried out by an independent surveyor.

Contrato Promessa Compra e Venda (CPCV)

Should you wish to put down a deposit without a formal mortgage offer in place, it is essential that the purchase contract (Contrato Promessa Compra e Venda (CPCV)) stipulates that completion will be subject to securing a mortgage and this is something that should be fully discussed in advance with your legal adviser.

Documentation the lender will want to examine

GENERIC DOCUMENTS FOR APPROVAL (mandatory)

Completed mortgage application form

Completed current account forms

Copy of passport or national ID card certified by Bank

Latest proof of address (such as a recent bank statement or utility bill)

Last 6 months bank statements

Experian credit check or equivalent

Copy of the Portuguese individual tax number (NIF)

EMPLOYED APPLICANTS

Annual HMRC or Tax declaration for example a P60 in the UK

The last 3 months' payslips

Employer's letter confirming your current salary, type of employment, any bonus entitlements,

job title, and length of time with the company

SELF-EMPLOYED APPLICANTS

3 years certified accounts

Self-assessment tax form (copy sent to Tax Authority)

Accountants certificate

ADDITIONAL DOCUMENTS FOR CREDIT APPROVAL

(where applicable)

Declaration of assets and liabilities (when applicable)

Buy-to-let proof of rental income / rental contract (if applicable)

Proof of deposit (e.g. Investment statement)

The latest statement of each debt obligation to any other financial institution

(eg Mortgage statements, credit card statements and loan statements)

PROPERTY DOCUMENTS FOR VALUATIONS

Copy of passport or national ID of the seller

Copy of the promissory contract detailing the conditions of sale

Land registry certificate or Form nr.1 (Caderneta Predial Urbana ou Mod.1)

Land registry certificate and pertaining documents (Certidão de Teor)

Internal and external property plans

Housing license (licença de habitabilidade)

Energy certificate

Building license (only for building loans) (licença de construcção)

Approved property plan building specifications (only for building loans)

Tax office documentation certifying settlement of Municipal Transfer

DOCUMENTS TO FINALISE MORTGAGE PROCESS

Buildings insurance application

Life Insurance application