It is important to have your finances in place or agreed in principle. Our associates in Portugal offer independent financial advice and will assist or advise you of all the options available. Various finance options are available: · Cash purchase · Cash from equity release or a re-mortgage of UK property · Part cash with the balance on a mortgage; Purchasing guide.
The following is an general guide to costings that you will be expected to pay should you find that dream Home in the Sun.
Initial Reservation fee €5,000
- Further payment on signing of the promissory contract approx 4 weeks later
- Followed by further stage payments that are agreed at reservation
- Final payment on completion.
Other costs (estimated)
- Notarial and registration fees – 1.5% of the purchase price
- IMT – up to 6.5% (depending on the type of property and purchase price)
- Lawyers and surveyor’s fees are usually subject to agreement. (Plus IVA/VAT 19%)
The reservation fee forms part of a legal contract, which fixes the price as agreed at the time of the payment and guarantees you will not be affected by any future price increases.
Should you take a mortgage there will be associated costs, as a general rule you can obtain a mortgage up to 75% of the valuation of the property.
Loans are only advanced after your ability to pay has been established. As in the UK you will need to supply evidence of income before lenders will be prepared to make an advance.
Obtaining a Poruguese mortgage for a non-resident is a simple process in Portugal. Mortgages are available on a repayment basis over 5 – 15 years. Should you require a mortgage this can be arranged for you, the following documents would be required: · Passport · Copy of last P60 · 3 months salary slips · 3 months bank statements . If you are self employed you will need to show statements of accounts for the last 3 years. You will need to have an initial deposit of at least 25-30% before a mortgage will be granted. Additional charges would be an ‘administration fee’ this is usually around 1% of the total mortgage granted, however it is sometimes negotiable. The rate of exchange can vary enormously and can make a huge difference to the amount you eventually pay, it is therefore advisable to use a corporate currency broker who specialise in this area. Through these specialised companies there are a number of options available to you, one of which is the forward purchase scheme, which guarantees rates for up to 2 years. (Ideal if you are purchasing a new build property) . Use online currency converters and currency exchange sites.