El primer paso a la hora de plantearse solicitar un préstamo hipotecario es decidir si tiene sentido pedir un préstamo. Decidirse por un préstamo o por la compra directa de una propiedad será siempre un debate que se discute ampliamente.

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Purchasing a property "in cash" is quite an achievement and a bit of a reach for many. Even if you can afford to purchase a property outright, it could be wise to obtain a mortgage instead, and an exclusive buyer's agent can guide you through this process to make the best decision for your circumstances.

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Real estate has historically been considered the lowest-risk investment due to constant real estate price increases. The expression among investors, "as safe as a home," speaks for itself.

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Assuming a cash investor and a leveraged investor both have 100,000€, the cash investor purchases a property for 100,000€. If the property appreciates by 5% per year, and the value of the property increases to 105,000€, the cash investor makes 5,000.00€. The leveraged investor purchases a property for 500,000€ and puts down a deposit of 100,000€. Assuming the same 5% rate of appreciation, and the value of the property increases to 525,000€, the leveraged investor makes 25,000.00€, 5 times that of the cash investor.

 

A smart investor can make a substantial return when this formula and method are used for two or three homes. Imagine 5% growth every year for the next 10 years.

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La mayoría de los compradores al contado invierten la mayor parte de sus fondos en la compra de una vivienda. Por otro lado, un inversor apalancado puede repartir la inversión en diferentes propiedades, lo que le permite aumentar su porcentaje de rentabilidad.

You will be very glad to know that there are no legal restrictions on non-residents purchasing homes or obtaining home loans in Portugal. If you have been considering investing in real estate or moving here, it's possible; as long as you meet all criteria, nothing stops you from proceeding with the buying process.

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Although non-residents looking to finance property may have to fork out 30%-40% of the purchase price/evaluated price as an up-front deposit.

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Loan-to-value ratio (LTV) is a necessary calculation for mortgage applications. It refers to the amount you're borrowing in proportion to the amount you are putting down as a deposit on a property.

 

For example, if you purchase a home of 100K and put down a deposit of 10K, you will finance 90K, meaning an LTV value of 90%. Banks often see loans with an LTV ratio of more than 80% of the property value as carrying a higher risk.

 

As a non-resident, you may get slightly less attractive terms as the risks may be higher for the bank; therefore, for fiscal residents buying their permanent residence, banks will loan them up to 90% of the property's purchase or appraised value, whichever is lower.

 

As a non-resident, you may expect up to 70% of the home's appraised value or purchase price, whichever is lower. Working with an exclusive buyer's agent can help you navigate these terms and secure the best possible deal.

More people are finding it challenging to afford a home because of rising property prices in the last couple of years, which forces them to settle for a longer-term mortgage that allows for smaller monthly payments but typically ends up being more costly as the lender ends up paying more interest.

 

Your age and years of income are taken into consideration by lenders when determining the loan term. In other words, the duration you qualify for would be nearer to your retirement age. The typical Portuguese mortgage length is up to 25 years, although some lenders may extend it to 30 years.